DOING BUSINESS

IN INDIA
ASSIGNMENT 1

C O M PA N Y : S E V E N E L E V E N

SUBMITTED BY GROUP 6

K A V I TA , B - 3 6 , 2 0 0 2 0 4 4 1 1 2 0
S H E E TA L YA D AV, B - 7 0 , 2 0 0 2 0 4 4 1 2 4 6
S H A M B H AV I , B - 6 9 , 2 0 0 2 0 4 4 1 2 4 4
RIMZHIM SINGH, B-60, 20020441214
PUSHPENDR A KUM AR, B-58, 2002044119 9
 E N V I R O N M E N T & S I T U AT I O N A N A LY S I S
T H E A N A LY S I S O F
• 7 / 1 1 A S A B U S I N E S S I N R E TA I L ( C O N V E N I E N C E ) I N D U S T RY
• U N D E R S TA N D I N G R E TA I L I N D U S T RY ( W O R L D W I D E A N D I N
INDIA)
• REASON FOR EXPORT OPPORTUNITY
• E VA L U AT I O N O F TA R G E T M A R K E T ( I N D I A )
• P E S T E L A N A LY S I S
TABLE
OF I N D U S T RY L E V E L A N A LY S I S
CONTENT • P O R T E R S ’ 5 F O R C E S A N A LY S I S
• S W O T A N A LY S I S ( O V E R A L L )

O R G A N I Z AT I O N A L L E V E L A N A LY S I S
• T I M E S E R I E S R AT I O S A N A LY S I S
• S T R AT E G Y T E M P L AT E I D E N T I F I C AT I O N
• A N A LY S I S O F C O R E P R O C E S S E S
• I D E N T I F I C AT I O N O F M A J O R C H A L L E N G E S
• BUSINESS PROCESS MANAGEMENT
ABOUT THE COMPANY: 7-11
• Founded in 1927, and its headquarter is located in Dallas, Texas.

• After 1991, a Japanese company called Ito-Yokado (7-Eleven, 2020) acquired 70% of the company. The
Japanese - American brand consists of convenience stores around different parts of the world.

• USPs: 24 - hours accessibility and its famous ice drink Slurpee, First convenience store to provide an
ATM facility in their stores for their customers, the coffee machine that they have placed in their stores
give out barista-style coffee at substantially lower rates.

• Previously it was open from 7 am -11 pm 7 days a week that is why it was called 7 Eleven (before the
name was Totem).

• Aim at the time of inception: to provide the primary or essential products to the customers nearby, so
they do not have to travel a lot to buy these essential products

• The range of products now sold by Seven-Eleven is - milk, bread, tea, soft drinks, chips, chocolates,
ready-made food, coffees, newspapers, and magazines etc.

• Currently operating in over 25 nations, some of which include Australia, USA, Japan etc. and has a goal
of expanding to the leftover countries in the world, which includes India as well.
PROCESSES IN 7/11
Store Network - Seven-Eleven success is mainly due to the design and management of its supply chain, its business purposes
is to provide customers the products they want when they need. From strategic point standpoint one of the core objectives of
the company is to seek micro balance between supply and demand through the regional, seasonal, and daily schedule.

Inventory Management - Seven Eleven has been able to use transportation segment brilliantly and keep inventory
proximate to zero. Stores are replenished at least three times a day and this short lead time eliminated the necessity for safety
stock.

Information Management - (Graphic order terminal (GOT), Scanner Terminal (ST), Point-of-Sales (POS) register desk are
some hardware used in the stores. The information system allowed Seven-Eleven stores to better match supply with demand.

Distribution system - Distribution is the last link between producers and consumers in the supply chain. The speed of
distribution efficiency unswervingly affects the degree of customer satisfaction. Seven-Eleven distribution system tightly linked
the entire supply chain.

Service Development – Seven-Eleven is aiming to meet customer needs with an expanded range of services and to
increasingly offer “close by convenient stores.”
RETAIL INDUSTRY
• Retail industry is taking steps towards being a properly organized
and evolved segment.
• The industry performed well until 2020 (COVID inception), which
changed the market scenario and consumer preferences.
• Retail industry increased the focus on online sales to meet the
rising demand of the consumers.
• As per IBEF’s Industry retail industry report 2021, the Indian retail
industry accounts for over 10% of the country’s GDP.
• India is the world’s fifth-largest global hub in the retail space.
• By 2022, traditional retail will hold a share of 75% with the
organized retail share reaching expecting to reach 18% and e-
commerce retail will be reaching 7% of the total retail market.
• Introduced AI technology by the retailers in their operations to
ensure flawless working.
• A greater need to track and store consumer data will employ
several tasks of gathering and analysis of consumer data and will
continue to play a major role in pushing the growth of consumer
business retailers.
• The basic features that Seven-Eleven has are the
24/7 availability which helps the customers to
buy products any time in a day without worrying
about the store timings.
• The location of Seven-Eleven stores runs in a REASON FOR
places where there are fewer or no other
convenience stores, playing a significant role in
EXPORT
the success of Seven-Eleven. OPPORTUNITY
• In many countries, there are still problems with
no such kind of stores that are open the whole
night and seven days a week, which allows
Seven- Eleven to expand its operations.
EVALUATION OF TARGET MARKET (INDIA)
The target country for 7-11 here is India, as it is one of the populous countries and the retail sector is ever
growing.

Market Modern
Scope
Size Trade •There is growing
•The modern trade popularity of
in India is expected convenience stores in
to grow by 18%. India
•With the ease of
In 2021, the market travelling abroad,
size reached US$ •The young group people in India have
883 billion and is of people aged 18- now been exposed to
projected to grow 34 in urban India convenience store
in the future. formats hence
prefer convenience increasing its demand.
store formats • the broad availability
where it is easy to of staff due to the high
grab and go. population and high
unemployed people in
that country.
EVALUATION OF TARGET MARKET (MUMBAI,
INDIA)
Largest city in India (Highly
populated, metropolitan) and the • Seven-Eleven is targeting different universities in
financial hub of the country.
South Mumbai. There are more than 15 universities
in South Mumbai, which means as a brand; Seven-
Eleven will be able to tap approximately more than
Diverse population with different
buying behaviors. 25500 students in just a short time.

• 7-11’s focus is to first open the stores in Mumbai

Active nightlife that could help and make a good stand, after a success; they would
Seven Eleven at night when other
stores are closed. expand into other metropolitan cities. This would
help in expanding the business all over India and
would lead to providing more growth, profits, and an
In 2019, the foreign tourists' arrival
in Mumbai rose by 3.23%, i.e. increase in brand value and brand name.
96,69,633 tourist arrivals were
counted in Mumbai.
 PESTEL
A N A LY S I S
Political, Economical, Social, Technical,
Environmental and Legal Analysis of Indian market
• Foreign franchisors come under the category of foreign investors and have
to abide by the regulations of Foreign Direct Investment in India.

• The political risk in India ranks 2 according to business and economic data
of 200 countries by the global economy website.

• According to transparency international 2020, the corruption perception

of India in 2020 ranks 86 and score 41, which is moderately high.

• Regulated by RBI, the multi-brand retailers can have up to 51% of FDI and
need to source 30% of their goods from India.

• The import policies keep on changing in India that could directly affect the
business of Seven-Eleven.

• India has provisions for special supermarkets and convenience stores to

run their stores 24 hours and seven days a week. Which may change due
to the high crime rate in some parts of the country for security and safety
could change these.
• The consumer expenditure is expected to grow in the future to US$ 7.7
trillion in 2022 from US$ 1,824 billion in 2017. Willingness to spend in India
is increasing.

• The retail sector accounts for 10% of its GDP and 8% of its employees and
hence, this sector is a well-flourished industry in India and has a huge
scope.
ECONOMICAL
• According to the Ministry of Statistics and Programme Implementation
FACTORS
(MoSPI), an Indian consumer spends around 28% of its total monthly
expenditure on groceries that is around Rs. 21,000 per person on average.

• Though India has a functional economy, due to the large population, the
income level still cannot increase so much or on the right scale because of
the large number of unemployed people. Seven-Eleven could easily hire
skilful and unskilful people without spending high expenses on paying high
salaries.
• Social factors that affect businesses in India includes culture, religion, and
customer preferences, age, and lifestyle, etc.

• Different religions have different faiths and beliefs that may affect the
consumers’ choices and preferences, as well.

• Diversity in terms of culture and traditions may also affect the working of
the organisation. Hence, 7-11 need to have employees who could
understand the local language.

• Factors of collectivism, femininity, and long-term orientation based on

Hofstede model is quite high. Collective decision-making takes place in
Indian culture. The stores believe in having long-term relationships and
earning loyalty among consumers.

• Approximately half of the Indian population is vegetarians. Seven-Eleven

has to alter its products accordingly, so it does not hurt the sentiments of
the consumers.
• Seven eleven should use the new types of mobile paying or
banking apps and should be familiar to it so that it is easy for
the customers to pay by online mobile banking in India.

• Currently in India, Paytm and google pay is used, and seven

eleven should adopt this as well and create some engaging
mobile applications so that customers could have an online
experience.

• The company also has to consider software and technology as

per Indian technology infrastructure. India's IT and software
development sector is strong and around the globe. Seven-
Eleven can leverage this opportunity to make technical
advancements in cost-efficient that help them in their
operations internationally.
• The Indian climate has extended monsoons and long dry periods. This
is a challenge that needs to be met by the 7-11 by creating an
infrastructure that can make businesses sustain in a climate so
diverse.

• The Government in India imposed 2016 Plastic Waste management

Rules, which was amended in 2018, says that the corporates,
manufacturers, and corporates and brands that use plastic packaging
need to take responsibility for collecting synthetic waste products.

• Single-use plastics like plastic cups, plastic straws, etc are banned in
India. This is enforced heavily & involves huge penalties. Hence, Seven-
Eleven should consider alternative methods of packaging than just
plastic.

• There has been an increase in awareness among consumers, and they

are adopting eco- friendly products and package designing Seven-
Eleven can consider this as an opportunity and create their marketing
strategies basis eco-friendly products and green buying.
• As per the World Bank, India ranks 63 in 2020 in terms of ease of doing
business and has further improved its position from 134 in 2013. It takes
about 17.5 days to start a business in India according to World Bank 2020,
allowing various entities to run companies in India.

• All the food served by 7-11 must be made and served according to the
acceptance of Indian consumers. Otherwise, 7-11 could face legal action
underP the
E Sconsumer
T E L Alaw NA act.LY S I S

• LEGAL
For Seven-Eleven to sell food products that may include quality of the
product, specific regulations for food packaging, and labelling set by by the
FACTORS
Food and Safety Standards Authority of India (FSSAI).

• As far as the franchise is concerned, there is no direct law restricting the

operations of a franchise in India.

• Other acts that might influence the functioning of the franchise in India that
includes The Indian Contract Act, 1982; The Trademarks Act, 1999; Designs
Act, 2000; The Patents Act, 1970; etc. These laws help in various aspects in
the smooth functioning of the franchises in India and safeguard the brand
identity.
 Threat of substitutes
PORTER’S FIVE • 7-11 has high substitute risk as it
primarily deals in consumer goods and

FORCES ANALYSIS preferences of consumers change

often.
• This is a shift from the brands that
FOR 7-11 are being sold in store to brands that
are available with competitors.

Bargaining power of
suppliers
• The supplier power would be
moderate here.
• 7-11 will need to create a brand
image that is greater than 24/7, as it is
the main competition and in order to
get suppliers from various FMCGs.
Rivalry among
existing players
• There is extensive competition
existing in Indian market for 7-11 from
various local Kirana stores to its main
competitor 24/7.
Bargaining power of
buyers
• The switching cost is very low as it
has competition from 24/7 and various
local Kirana stores, as well as, the
taste of consumers differ from
location to location.
• This indicates that the buyers have a
higher buyer power.

Threat of new
entrants
• The threat can be stated as
moderate as there are only few big
players present in Indian market
currently, the main one being 24/7.
TIME SERIES ANALYSIS

• Time series analysis is a specific

way of analyzing a sequence of
data points collected over an
interval of time. In time series
analysis, analysts record data
points at consistent intervals over
a set period of time rather than
just recording the data points
intermittently or randomly.
• Balance Sheet data for the last five
years.
INTERPRETATION FROM • The net profit margin shown above indicates

TIME SERIES ANALYSIS: that the company’s net profit deteriorated

throughout the trend. It was highest in 2017
i.e. 14.61%, but it started falling down till 2020
when it was 4.39%.
Time Series Analysis • The ROE indicates the return generated by
80 the company out of every 100 RM of its total
equity. The overall trend shows that 7 eleven
70
improved its performance in terms of return
60 on equity in 2017 from 34.62 to 69.68 but
then again fell and showed poor performance
50
in year 2018 to 2020.
40
• Return on assets is a profitability ratio that
30 provides how much profit a company is able
to generate from its assets. In other words,
20
return on assets (ROA). Performance of this
10 ratio was best in year 2017 i.e. 27.57.
0 • It can be said that the overall profitability for
2016 2017 2018 2019 2020
7-eleven did not change much after 2017, in
Net Profit Margin 5.17 14.61 4.8 4.73 4.39
2017 the company showed the best
ROE(%) 34.62 69.68 22.69 27.14 25.14
performance, but the company failed to
ROA(%) 12.16 27.57 8.86 8.11 6.14
maintain it.
 Seven eleven has shown Indian population follows a
decreasing performance in collective decision making
terms of profits (also mechanism. Growing loyalty for 24
considering COVID since seven is the reason why
competition poses a major
2020). This indicates that the challenge, which is only going to
opportunity to enter Indian keep rising. This can, in turn, give
market is vital for seven rise to other challenges like High-
eleven. implied demand uncertainty.

IMPORTANT
CONCLUSIONS
Time Series Porter’s 5 Forces
PESTEL Analysis
Analysis Analysis

the major challenge for Seven

eleven is the existing retail
convenience store chain 24 seven
,which is India’s first twenty-four
hours convenience store chain
with more than 100
stores (already) spread across
Delhi/ NCR and Chandigarh.
BUSINESS PROCESS
MANAGEMENT
Major Challenge/Problem: Existing competition by 24 Seven

Process Name: Sales and Marketing

Scope: To respond to the existing competition by 24 seven, seven eleven will have to deliver best customer
service in terms of a streamline store/online-shopping experience and effectively promote the high and unique
value they ought to deliver.

Sub process:
Sales
• Employee training
• Sales channel management (Operations in store and on ecommerce platforms)
• Key accounts management
• Customer service

Marketing
• Market research
• Competition analysis
• Formulating effective promotions strategy
• New Product Development
• Customer experience management
• Customer relationship management
S I P O C A N A LY S I S
FOR SALES AND MARKETING
PROCESS:
Following is the SIPOC (Supplier, Input, Process,
Output, and Customer) Analysis for Seven Eleven, which
operates under Retail (convenience) industry.
Supplier: Inputs: Output: Customers:
• Training provider • Trainingand • Order information • Customers
• Telecom Provider
• Marketing
Coaching
• Inventory database Process • Call accounting Data
• New Customer data
• Inventory data
• Payment gateway
processor (eg: Credit
Card Processors)
Department • Accounting • Marketing Dept.
• Payment information
• Sales Department • Customer Database (method & instrument) • Finance Department
• Customer • Order and category • Warehouse

Customer Product Order input in Information

system
End
orders Details exchange
•Customer •Customer provides •Order details are •Availability of the •Waiting period for
approaches to buy the order details recorded in the product, customer the customer to
a product (product details) system for future payment details, receive the product
reference etc. begins.
• Customer Understanding/Knowledge: Customer
interaction and engagement are vital to any retailer’s
success. By leveraging insights from various data points
such as loyalty card programs, point of sale data and
demand data, to gain an in-depth understanding of the

CRITICAL
patterns and anomalies in consumer shopping habits.

SUCCESS
• Effectiveness of inventory and space allocation:
Looking at the shopper demographics for a store or
cluster of stores with similar attributes gives a better
idea of how the store is assorted to provide an
appropriate experience. FACTORS
• Supplier relationships: Suppliers are the key player in
keeping up with the demand. On boarding prominent
suppliers and maintaining a healthy relationship with
them is critical for the success of seven eleven.
 (Total known external shrinkage + Total
• Loss of product between the point of manufacture known internal shrinkage
Shrinkage Rate to the point of sale.
______________________ x 100

Total Number of manufactured

product

• Total amount of revenue earned by the

Gross Revenue convenience store.
Total Revenue – Cost of Goods Sold

Average customer • The average amount of money spent by customers. Total amount of sales

spend ___________________
Total number of customers

KPI
• It reveals how well space is optimized and the ROI Net Sales
Sales per sq ft on a physical space.
_______________
sq. ft of the store area

Total units sold

KEY • Each transaction should result in multiple items _________________
PERFORMANCE Average basket size being sold.
number of transactions made

INDICATORS
FOR 7-11

Gross margin return • Reveals how much the store is making off money Gross margin
_________________
on Investment invested in inventory. Average inventory cost

• Gives a sense of how good the store is in turning

Conversion Rate shoppers into buyers.
Number of buyers
__________________ x 100
Total number of visitors

• the total amount of profits earned by the

Net Profit convenience store.
Gross revenue – Operating expenses for the
store
SWOT
ANALYSIS • Strong brand portfolio.
• Tie-up with Reliance
Retail.
• Advertising and
Marketing.
• Quality of product not up
With regards to SIPOC
to the mark since they tie
Analysis and overall • Financially strong global up with low pricing
export opportunity for 7- presence so strategic strategy companies.
location option available.
11 • Demand forecasting
• Prior history of good
performance in new • Lost time- brand loyalty
markets. for 24-7 keeps increasing.
• Lack of technological (or
Strength Weakness otherwise) infrastructure.

Opportunit
• New offerings to add in Threat • Various Supermarkets
brand portfolio. y moving to 24 hours
• New Market
service.
• Cater to large population
• Local Kirana shops and
and market segment is
24/7
huge.
• Security and shoplifting
• New customer base.
• Cultural difference (must
• Implementation of
be studied thoroughly
sophisticated 1st world
while creating promotion
technology to 3rd world
campaigns etc).
market.