Brief Background Of The Case

In 1972, Seven-Eleven’s founder, Masatoshi Ito approached the Southland Corporation about the possibility of opening Seven-Eleven convenience stores in Japan. After rejecting his initial request, Southland agreed in 1973 to a licensing agreement. It gave Ito exclusive rights throughout Japan. In May 1974, the first Seven-Eleven convenience store opened in Tokyo. Before Seven-Eleven was established, Japan was dominated by Mom-and-Pop stores. However, after a trip to the United States, Ito became convinced that superstores would be the wave of the future trend. This new concept was an immediate hit in Japan, and Seven-Eleven Japan experienced tremendous growth. Of course, Ito’s chains of superstores in the Tokyo area were instantly popular and soon constitute the core of Ito Yokado’s retail operation. Japan’s convenience store sector gradually consolidated, with larger players growing and small operators shutting down. Seven Eleven Japan had increased its share of the convenience store market since it opened. In 2002, Seven Eleven was Japan’s leading convenience store operator. Seven Eleven was very effective in terms of same-store sales. In 2004, Seven Eleven’s operating income positioned it as a leader not only of the convenience store sector but also of Japan’s retail industry as a whole. This growth had been very carefully planned, exploiting the core strengths that Seven Eleven Japan had developed in the areas of information system and distribution system. Seven Eleven Japan developed an executive franchise network, it includes both company-owned stores and third party owned franchises. Besides products, Seven Eleven Japan gradually added a variety of services that customers could obtain at its stores. The company later expanded the set of utilities for which customers could pay their bills in the store. As to their information system, Seven-Eleven Japan sought to simplify its operation