Mis 7-Eleven Case Study

Management Information Systems BUA5MIS

Case Study No. 1 - 7 - Eleven

Kimberley McGinnes, Shaun Brooks, Rohan Malhotra & Siddhartha Khoba

7 - Eleven

Management Information Systems - 7 - Eleven Store Mini Case

Overview of 7 - Eleven.

7 - Eleven commenced operation on 11th July 1927 in Dallas Texas and has gone on to be an industry leader for more than 40 years (http://www.rimag.com). Originally the stores operated from 7am to 11pm, a trading span that was unheard of at the time. However most 7 - Eleven stores now operate 24 hrs a day (www.answers.com). 7 - Eleven has approx 7100 stores in North America and over 30,000 stores world wide. It has the largest ATM network of any other convenience store in the United States. 7 - Eleven have had many convenience store firsts including being the first retailer to sell coffee in take away cups and offering all major soft drinks brands at their fountains. To put the size of 7 - Eleven into perspective they sell 41 million gallons of milk each year, which is enough milk to pour more than two glasses of milk for every person in the United States (www.7-Eleven.com). The diagram below demonstrates the expanse of 7 - Eleven world wide.

(http://www.sej.co.jp/english/company/g_stores.html)

Q.1 7 Eleven competes with both other chains of convenience stores and independent stores. What competitive advantages can you identify in this case?

According to the J.D Power and Associates (www.jdpower.com) customer satisfaction survey the following are the most important contributors to customer satisfaction in Japan.

There are 3 key areas encompassing the many aspects that provide 7 - Eleven with their competitive advantage. As you can see from the overview below 7 - Eleven are able to compete and more often than not dominate in each of the key areas identified in the aforementioned study.

Extensive Knowledge of the market

The management information systems utilised by 7 - Eleven allow them to be able to capture crucial data on their customer base, which ensures that are providing customers with the products and services they need and want. Additionally it enables 7 - Eleven to be able to track products and utilise a sophisticated inventory system to provide exactly what the customer wants at the time that they need it. Furthermore it refines 7 - Eleven's inventory system as they are more accurately ordering and restocking products that they are confident will sell. They have developed a streamlined value chain through electronically transmitting orders and keeping product turnover high. "They are using computer based information systems to connect all the partners in their value added chains directly into flexible manufacturing systems" (Best, 1993, pg. 49).

The management information systems also offers added value as it provides 7 - Eleven with an avenue to monitor staff performance, thus providing them with the ability to continuously provide a high level of customer service.

Technological advances

The time distribution system provides competitive advantage on two fronts, the ability to be able to be utilise the small spaces in Japanese retail outlets and to be able to provide customers with a greater range of products more accurately catering for there needs.

The information available through their management information systems not only assists in building relationships with their customers, it also allows 7 - Eleven's vendors to anticipate their needs and prepare and deliver items in a faster than expected timeframe (Buchanan, Thunderbird, Simmons, Washington and Lee University, 2004, pg. 6) providing advantage to 7 - Eleven, their customers and their vendors.

Expanding core business

The expansion of the core business into services such as Internet provision and hot fresh meals sees 7 - Eleven providing an alternative service to it customers. This gives customers additional reason to come to 7 - Eleven thus expanding the clientele base.

7 - Eleven uses its management information systems to obtain competitive advantage that not only helps them decide which products to make available to their customer base, it also allows them to determine how they are going to deliver the product, a crucial component to gaining and sustaining competitive advantage (Buchanan, et. al. 2004, pg.1).

In Japan, 7 - Eleven have thoroughly engrossed themselves in the concept of expanding their core business to provide their customers with a one stop shop. They provide alternatives to some of the more difficult aspects of the hectic Japanese life style such as meals, ATM access and a pick up point for Internet shopping. In a cash based society they even provide a cash pick up point for e - commerce goods and services. 7 - Eleven in Japan has truly embraced customer service, which has helped them achieve a distinct competitive advantage in this market.

"7-Eleven has exploited the economies of scope of a customer relationship business by working with a broad range of product and service vendors to define new products and services tailored to the needs of their customers" (www. edgeperspectives.typepad.com).

Q.2 Use the internet to find the major competitors of 7 - Eleven in Japan, the United States and other countries where 7 - Eleven is active. Describe the competition faced by the company.

7 - Eleven has convenience stores in Japan, Australia, Mexico, Taiwan, Singapore, Canada, the Philippines, Sweden, Denmark, South Korea, Thailand, Norway, Turkey, Malaysia, China and the U.S. territory of Puerto Rico (www.7-eleven.com). The following chart depicts the breath of 7 - Eleven across its territories.

In Japan the major competitors of 7 - Eleven are Ministop and Circle K with 1700 (www.ministop.com.ph) and 3000 (www.circlek.com).stores respectively. Compared with the number of stores occupied by 7 - Eleven (www.sej.co.jp) it could be concluded that the neither poses any real threat. Both provide very similar services to 7 - Eleven including the provision of ready to eat food