Business_Case_Study

7-ELEVEN MANAGEMENT CASE STUDIES INTRODUCTION 7-Eleven is the world’s largest convenience stores operating, with more than 35, 000 franchised and licensed stores in 17 countries, which generate annual sales exceeding over $ 36 billion. 7-Eleven Stores Pty Ltd is wholly owned by an Australian family. It is operating as the independent licensee of 7-Eleven Australia. The first store was opened in 1977 in Oakleigh, Victoria. Since then it has expanded to more than 360 stores across Victoria, NSW and Queensland. 7-Eleven Australia has services which provide almost 100 million customers with sales approaching $1.5 billion. Franchising is a form of business ownership in Australia, and according to Australian Bureau of Statistics, over 5% of all businesses in Australia is operating as franchises. 7-Eleven Franchisee training Course (SEFT) is a six week intensive induction program for new franchisees before they operate their own store. It focuses on the 11 key subjects such as store operations, retailing and merchandising, business management, safety and security, financials and other day-today operational competencies. They have ongoing in-store training which can go up to every six months. 7-Eleven district managers are on-call to provide further training and assistance if it is required. Management skills and roles are often taught at the inductions as well. STRATEGIC PLAN In 2006, 7-Eleven embarked upon its $22m Project Energise program. The objectives of this long-term strategic plan were to: * streamline operations making day-to-day store management simpler and more efficient * update and tailor product mix and store image to continually meet customer demand * Grow business by 12% with franchisees and company profitability growing at the same rate. VISION Their vision consists of extensive quantities and qualities to market research to determine the most suitable areas for new stores and to develop the most lucrative product mix to suit the profile of likely store customers this is done through extensive research. 7-Eleven also extended profitable categories such as slurpee, reduced reliance on confectionary and introduced healthier and fresh product lines to widen their customer base. 7-Eleven responded to changing consumer taste by providing healthier snack options. One of the most successful innovations has been the heavily promoted fresh ready to eat ‘munch’ range. TECHNOLOGY In line with the Project Energise aim to improve operations, seven eleven developed its sophisticated franchise matrix to measure store performance and engagement against 10 key performance indicators. This computerised continuous improvement tool gathers and analyses financial and non-financial key performance indicators. E.g. sales, gross profit and friendly service. Areas of strengths and weaknesses are identified and training and support is offered to franchisees struggling to meet key benchmarks through each stores individual store development plans. 7-Eleven invested in a new centralised automatic stock replenishment system that creates and fills store orders automatically. In 2007, 7-eleven integrated this POS system- point of sale- with its secure internal intranet system to offer a new electronic product line of branded gift cards for retailers such as Rebel sports and Sports girl plus many others. The new system gives customers the convenience to by and validates the e-Sales gift cards immediately in store. During 2009, 7-eleven also introduced its advanced SAP RETAIL MERCHANDISING SYSTEMS. These systems provide users with real time smart market data, to analyse customer behaviour and purchasing patterns. The system can tailor stock levels, pricing promotions and optimal store layouts to maximise customer spending. SUPPLY-CHAIN/ QUALITY MANAGEMENT SYSTEMS One Business-to-business innovation has been the introduction of a centralised purchasing and ordering system. The system automatically creates store orders based on electronic sales or replenishment records. When 7-Eleven introduced ‘munch’ it was vital that this fresh product range arrived in-stores daily, at peak quality levels and minimal spoilage. 7-Eleven also established quality benchmarks that they believe a much higher than those set by other r comparable Australian food retailers. A zero tolerance target of 100 percent for the critical slurpee brand. The performance for 2007 was 99.7 percent a target 98.5 present for daily fresh products. In 2007 the achieved 98.9 percent on a continuous basis. CONCLUSION In response seven eleven has embarked on an ambitious strategic plan to streamline business operation and to maintain its relevance to its customers. The multi-faceted energising everyone program includes ongoing product in ovation and development, customer focused researched , store re design, improvements in the internal ICT systems and a shared commitment to franchisee training ,performance appraisal and business success. 7-Eleven is successful franchise due to its productive market research and its knowledge of its customers needs’ and wants’.