1 Provide a Situation Analysis for the 7Eleven Franchise 2 P

1. Provide a Situation Analysis for the 7-Eleven Franchise.

2. Provide a Market summary for the 7-Eleven Franchise, identify the target markets.

3. Provide 7-Eleven Franchise Market Demographics:

a.Geographics

b. Demographics

c. Behavior Factors

4. Market Needs

a. Quality caraftsmanship

b. Will thought out designs

c. Customer service

Solution

SITUATION ANALYIS OF 7- ELEVEN FRANCHISE

7-Eleven is an international convenient store chain based in Texas founded in 1927. It the largest convenient store chain in the world with around 22,000 stores all over the world. Formerly known as Tote’m Stores, 7-Eleven is spread across eighteen countries.

A situation analysis deals with an overall analysis of the past, present and future situations of a company, the internal and external factors that have an impact on an organization’s performance and formulation of strategies which involves PEST and SWOT analysis.

External Analysis

COMPETITORS

The major competitors of 7-eleven are supermarkets which are operating in various locations all over the world. Some of the supermarkets have started operating 24*7 which is a major threat to 7-eleven. Most of the supermarkets are also based on convenient shopping which offers products based on customer preferences.

POLITICAL FACTORS

The political, social conditions in different countries doesn’t have much effect on the business of 7-eleven as the company have diversified its business all over the world.

SWOT ANALYSIS OF 7-Eleven

STRENGTHS

Sharing of gross profit with franchisees

Unlike other companies, 7-eleven shares its marginal profit with its franchisees.

Spread across convenient locations

7-Eleven franchise is spread across convenient locations with over 50,000 stores all over the world. These stores provide ease of shopping for the customers.

Brand image

7-Eleven is regarded as a market leader. This helps the store to have a better brand image and earn the loyalty of the customers. This helps the store to have stable revenue from all its outlets.

Umbrella branding

7-eleven also has several products under its umbrella. For example, Movie Quik, Slurpee are the brands of 7-Eleven and they are highly sought after by the customers.

Business model

The business model of 7-Eleven is franchisee which help the company to expand without any initial investment and the expenses are being taken by the franchisees.

Multiple sources of income

Since 7-Eleven is spread across eighteen countries, the income is diversified from different geographical markets. Hence it will be not affect the general flow of income in case of any instability in a location.

WEAKNESS

High infrastructure costs

There are high infrastructure costs associated rentals. Since the stores are to be located in convenient locations, it may incur high costs with regard to rentals. It may be reflected in the price of the products which make price sensitive customers reluctant to make purchases from the stores.

High operational costs

Since the stores are operating 24 * 7, 7-eleven may have to pay high salaries to their employees. This is also another element that may increase the price of the products.

OPPORTUNITIES

Opportunity for further expansion

7-eleven has the opportunities to expand further to new locations where potential to capture the market.

Wide range of products

7-eleven franchisees display a wide range of product offerings and avail services like ATMs and even vehicle insurances.

Strategic tie-ups

7-eleven has strategic tie-ups with manufacturers whose products are available only in 7-eleven stores. For example, variant flavors of Gatorade are available only through 7-eleven stores.

Opportunity for branding tie-ups

7-eleven stores have the opportunity for brand tie-up with coffee chains, pizza outlets etc. in their locations. This will attract more customers to both these stores as well as for the brand partners.

THREATS

Supermarkets

Supermarkets are posing threat to 7-eleven as in many parts of the world supermarkets have extended their operating hours. These supermarkets might pose threat to 7-eleven by affecting the growth of 7-eleven.

Online stores

Flourishing of online stores will also pose threat to 7-eleven as people may prefer to buy products in the convenience of their homes.

Security issues

Security issues and theft have been reported in certain 7-eleven stores as there may not be sufficient staff in certain locations.

MARKET SUMMARY OF 7-ELEVEN

Target markets

The target market of 7-eleven are the customers who prefer convenient shopping. 7*eleven is also proposing to develop a mobile app in 2018 where the goods can be ordered and delivered through mobile applications. This service adds to the convenience of the customers.

Market trend of 7-eleven

7-eleven adopts the strategy of introducing private labelled products in its stores. This kind of product differentiation strategy help 7-eleven to beat its competitors when the such products will be exclusively available in 7-eleven stores.

7-eleven has a turn-key business model where the business and marketing strategies are formulated by the top management and individuals could become a part of the business as franchisees.

7-eleven organizes trade shows to introduce new products and recently introduced four brands of coconut water

The company is also planning to resort to mobile on-demand service where the customers will be able to purchase goods through 7-eleven mobile applications. They will receive spot delivery of the purchases. This mobile app will be tested for Dallas stores and will be later introduced to other stores also.

Market growth of 7-eleven franchise

7-eleven is in an expansion mode and it is growing at an exponential rate in countries all over the world. It has adopted a franchisee model for expanding the business. Currently the stores are located in eighteen countries all over the world. Since the stores are open 24*7 at convenient locations, it helps 7-eleven in maintaining a leadership position.

Critical Success factors

Information technology

Integration with information technology is one success factor of 7-eleven which provide competitive advantage. The customized retain information system is designed for ease in ordering, distribution and merchandising. It helps in timely availability of products on item-by-item basis. The retail information system helps in meeting the high demand of the products.

3. MARKET DEMOGRAPHICS

a. Geographies

7-eleven is operating in more than eighteen countries all over the world with more than 22,000 stores.

b. Demographics

7-eleven target all kind of customers including men, women and kids of all age groups.

Some of the products of 7-eleven are priced at a high price in order to compensate the high rental that the stores have to bear in the search for convenience locations. These may be reflected as high pricing.

c. Behavior factors

Customers exhibit brand loyalty in the purchase of products. 7-eleven is considered as a leader in retail convenient stores and enjoy a good brand image. This makes the customers to trust in 7-eleven and have brand loyalty in the purchase of products.

4. MARKET NEEDS

Based on customer preferences

The main focus of 7*eleven is the convenience of the customers. The stores provide convenient buying of high quality and fresh products and services at affordable prices. The products range from food, drinks, coffee, snacks, fuels and many more. The store spaces are designed for quick transactions which provide a customer-friendly and clean atmosphere. Every stores are equipped with more two thousand varieties of products which are made available according to the choices of the customers. The products are designed with quality craftsmanship meeting the references of customers and are available at a fair price.

7*eleven is also expanding the varieties of food items which are from private and proprietor owned manufacturers. Further the convenience stores also extends its service to the local customers with the service of fax machines and ATMS.

c. Customer Service

The customer service is available 24 hours a day, seven hours a week.