LAWSON

Industry Analysis

Lawson, Inc. is a convenience store chain in Japan. The store originated in the United States in
Cuyahoga Falls, Ohio, but exists today as a Japanese company (subsidiary of Mitsubishi Corp)
based in Tokyo.

Lawson has massive expansion with its growth overseas: has more than 5,200 stores in China.
In 2011, Lawson opened its first Indonesian store in Jakarta, began opening stores in Thailand in
2013, first branch in Manila (Philippines) in 2015, and did exist in South Korea after the 1988
Summer Olympics (since 1995, the Lawson right had been bought by the Kolon Group and in
2000 was absorbed into the 7-Eleven franchise).

Lawson, one of the largest convenience stores in Japan with more than 10,000 shops in Japan--
has different color against its competitors, namely 7-Eleven, FamilyMart and MiniStop. 7-Eleven
implements its marketing strategy with providing pre-prepared foods and has mass production
of onigiri in Japan market. Both Lawson and 7-Eleven (and the rest competitors) have their own
bandwagon in creating campaign and improving their scale in each country..

Speaking of industry evaluation, the environmental factors that are fundamental to be

highlighted are market size, demographic trends, regulatory factors, technology developments,
supplier channels, consumer habits and social considerations (Exhibit 1). According to the
analysis, Lawson is well‐positioned since it has 4.86% of annual growth. Pertinent to the data
accumulated, Lawson presents innovation to its customers responsively due to price sensitivity
by providing variations of pricing (from affordable to premium products).

A Porter’s Five Forces analysis (Exhibit 2) further amplified this reasoning. As could be seen on
the addendum, Lawson has proven its strong presence with rapid expansion, both local and
abroad, especially in Asia countries. Lawson is a great player when it comes to convenience
store segment, which it offers many novelty provided through products and services. Beside its
various adoption toward technology development and its consumers preferences, Lawson faces
direct amd indirect competitors. However, it embraces the challanges as opportunities to grow
wider by improving the other aspects, such as the power of buyers, suppliers, etc.

Strategic Groups & Positioning

Differentiated retail formats are bundled into convenience stores' strategic groups of
competitors. It comes from direct convenience store segment, with Lawson's biggest direct
competitors consisting 7-Eleven, FamilyMart, and MiniStop. As the indirects ones are from
supermarkets and club warehouses, which they also have strong position in the industry,
especially in local Japan, Asia, and worldwide.

Exhibit 3 shows a portrait of Lawson's main competitors from various store formats and styles.
To compete against them, Lawson has to win their consumers' heart and wider their scope of
brand awareness, despite being rapid in expanding their store numbers.

Competitor Analysis

Based on the data shown in Exhibit 4, Lawson plays a big role in the convenience store industry
against its biggest competitors (i.e. 7-Eleven, FamilyMart, and MiniStop). Regardless, the overall
price points area on average level, since the tight competition, which they have similar target
market, store format, and their products offered are also alike. Even so, Lawson itself has
evolved by showing its unique value propostions, such as the high quality (premium) products,
more jumped into "organic" or natural products by providing Lawson Natural, and consistent in
giving the best consumers shopping experience as it could.

Competitive Positioning

Apart from the strict competitions against other players in the industry, Lawson has still hold
the good position in the market. Along with its massive expansion, Lawson also reveals how its
team maganed to be sophisticated to attenuate with current trends, adaptive to its target
market based on country culture, value, and so on. To be said, Lawson has big room to grow
with its unique selling proposition, without being a copycat of others. The depiction on the
overall addendum has been a proof of how Lawson are in safe space to compete.

Addendum

Exhibit 1: Environmental Analysis

Convenience Store Industry (1) Lawson

Market Size $ 37.7 billion ¥2.4 trillion ($18.6 billion)

Annual Growth 0.9% 4.86%

Demographic Trends  appeal to a wide portion  attunes to local consumers

from simple beverages to
meals
 attract a variety of
customers in every socio-
economic
behavior and latest trends
 caters to those who are
health-aware with its
healthy vegan foods
 jumps on the social media
  offer healthy prepared
food but also partner with
the junk food association
Regulatory Factors  Regulation exists: FDA
approval
Technology  implement new solutions
Developments and IoT to improve
relationships with
customers (e.g. self-
checkout, Wi-Fi, apps)
Suppliers  Wide range of suppliers
Consumers  Consumers behavior is
Preferences/Social constant state of flux
Factors  Consumers tend to have
food price sensitivity (price
over brand)
to attract consumers from
different ages
 innovates to provide a
plethora of sophisticated
products to follow the
trends (e.g. going with
Korean Food like "odeng",
in which it is popular now
as the improvement of K-
celebs)
 practices hygiene
management based on the
HACCP concept to prevent
incidents (food poisoning,
contamination)
 utilizes big data analytics,
including entertainment, e-
commerce initiatives,
financial services and
improved efficiency
through digitalization such
as Twitter branding, RAIN
RFID technology
 wide variety of business
transactions with various
domestic and international
suppliers (formulated the
Lawson Group Purchasing
Policy, which constitutes
supplier selection
standards)
 responsive due to price
sensitivity by providing
variations (affordable to
premium)
  Experience is a must

(1) Convenience Store Industry from various countries (Source: IbisWorld, ExploreResearch,
CSPDailyNews)

Exhibit 2: Porter’s Five Forces Analysis:

Common Gorcery Industry C-Stores Segment

Intensity of Competition Extremely competitive since Competitive among c-store

this industry has many actors chains, but also face both
locally and internationally, direct and indirect
consisting C-store, competitors as mentioned
supermarket, minimart, etc below for examples:

 Direct: 7-Eleven
 Indirect: major
supermarkets

Power of Suppliers  Suppliers have less  C-stores items like

power foods and drinks have
great bargaining
power of suppliers.
Basically, c-stores can't
take a great amount of
supply as much as
common
supermarkets
 Some of c-stores
usually set up a joint
venture, for example:
7-Eleven with Nestle.
They don't need to
face great bargaining
 power of suppliers

Power of Buyers  Consumers are in  Price sensitivity is not

great position. They as high as
have power in supermarkets
selecting various  Consumers are in
brands great position of
 Price sensitivity is high flexibility in choosing
the stores
 since it has no
monopoly, consumers
have power in this
industry

Substitute Products Consumers can make most items are substitutable,

substitutes for example: onigiri, instant
noodles, softdrinks, etc.

Barriers to Entry depend on how well the easy to entry for new actors.
relationship are built among There are many similar
suppliers, brand exposure and industry with various scale of
its customer loyalty rate store formats and styles

Exhibit 3: Strategic Groups Within Convenience Store Chain Industry:

C-Stores Supermarkets Club

Warehouses

7-Eleven Lotte Mart Costco

FamilyMart Carrefour Daiei

MiniStop Aeon

Source: WWD, Profilpelajar.com, Top-Rated.online

Exhibit 4: Competitor Analysis:

Lawson 7-Eleven Family Mart MiniStop

Value  high  Fun, fresh,  customer-  provides
Proposi shopping and chilled oriented family-like
tion experience 24-hour and warmth
 releases place to go focuses on and
new  offers growth comfort.
products innovative  Offers  Known as
every private exhaustive tax-free
season that brands like product shop, which
often Slurpee mix provides
become  successful options fresh
popular franchise  numerous products
 High- model and is tax-free such as
Quality, seen as a service soft-serve
such as its benchmark  regular and ice cream
sweets  focuses on premium  Eat-in-
brands like digitization products space
Cupke, such as available to
Baschee, etc delivery with
 operates apps restaurants
separate -like setting
stores with (seating
similar area)
names, e.g.
Lawson
Store 100,
Natural
Lawson, etc

Geogra 14,656 (Japan), 78,029 stores in 19 24,574 stores 1,907 domestic,

phic 4,872 international countries worldwide 137 abroad
Presen
ce

Price  Average  Average  Average  Average

Points  Sales on  Offers  Frequent  Periodical
certain loyalty promos on
 season, like program special promotions
twin date where events
disc (11.11, customers
12.12), can earn and
special redeem
events points
(Ramadan, (7REWARDS)
etc).  various
 Discounts in discounts
the form of
reward
points are
applied to
products
such as
“bento” and
“onigiri”
that are
approaching
their expiry
dates
 10 to 20%
pricier than
other local
stores

Capabil  One of  First largest  Second  has unique

ities largest national c- largest c- brand of
national c- store in store in fast food
stores in Japan Japan  Under a big
Japan  renowned  diversified AEON as its
 Has rapid brand revenue parent
expansion globally and stream group
overseas has stores beyond  Has various
 provides across Services variety of
novelty multiple sector and ready-to-
towards countries Retail eat
society’s including US, segment products
 ever- Canada, etc.  market  Strong
changing  known for share support
diverse digital increases from
values outlook with rapidly business
 offers in- innovative partners
store value- apps and has
added  Strong their own
services relationship distribution
such as with big center
financial suppliers
services

Target  mid and  Middle class  Middle and  Middle and

Market high-end and upper upper class upper
market class
positioning individuals
 Solidly
white collars
with limited
leisure time

Source: Lawson, Asahi, Matcha-jp, ChinaDaily, mbaSKOOL, 7-Eleven, Wikipedia, EMBApro,

LiveJapan, FamilyMart, MiniStop

References

CSP Daily News. (2022). March 27, from

https://www.cspdailynews.com/amp/technologyservices/4-key-trends-c-store-technology

Explore Rsearch. March 26, from https://explorerresearch.com/learn/convenience-store-

insights/

Futur IoT (2019). March 26, from https://futureiot.tech/lawson-of-japan-brings-iot-to-

consumable-items/

Holiday Tours (2022).March 26, from https://www.holidaytourstravel.com/japan-convenience-

stores/

Huuhka, A., Shimizu, N., & Laaksonen, M. (2010). Strategic differentiation in the Japanese
convenience store business. the example of Lawson’s format variation. European retail
research, 149-172.
Ibis World. March 26, from Convenience Stores in the US - Market Size 2005 - 2028 - IBISWorld

Lawson (2023). Wikipedia. Retrieved March 13, from

https://en.m.wikipedia.org/wiki/Lawson_(store)

Lawson. March 26, from https://www.lawson.jp/en/about/purchasing_policy/

Mba Skool. (2022). April 1, from https://www.mbaskool.com/business-concepts/marketing-

and-strategy-terms/1617-convenience-store.html

Mitsubishi Corp. March 26, from https://www.mitsubishicorp.com/jp/en/bg/consumer-

industry-group/project/lawson/

Prezi. (2015). April 1, from https://prezi.com/vfjjut4iwrtx/porter-five-force-of-circle-k-

convenience-stores/

Statista (2022). https://www.statista.com/statistics/810907/lawson-store-net-sales/. March 26,

Tan, C. S. L. (2013). Humanizing Twitter in retail: How Lawson, a convenience store chain in
Japan fused cute culture and social media. Journal of Economics, Business and Management,
1(2), 197-200.