TMGT601 Assignment 1 Sample Template

Selection of the Firm

The 7-Eleven Group is a large multi-national company established in Hong Kong that moved to the
United States in 1992 (Smith, 2013). The firm owns a retail chain that is based on franchising in areas
where there is demand for fast, convenient and accessible Fast Moving Consumer Good (FMCG)
product.

The firm, like other convenience stores, adopts a high price strategy (7-Eleven, anonymous, 2012).
Based on this, the company can be classified into a differentiator (Porter, 2014).

This paper examines the current strategic intent of the 7-Elevent (hereafter termed S7) and
addresses the possible shortfalls of the strategy. The intent of the report is to identify possible flaws
in the S7 strategy and present possible solutions. The work uses Porters Five Forces Model (PFFM) as
its primary theoretical framework (Porter, 2012).

Effectiveness of Current Strategic Intent

It is important for S7 to ensure that it remains competitive. In a recent study by Ernst & Young (EY,
2017), the price-variety combination was found to be the number one decision factor for consumers
in urban areas buying from convenience stores. The concept of the price-variety dates to 2010 when
Parhlad and Luke (2010) identified that some customers prefer higher prices in convenience while
attaining a greater variety of products. This will abbreviated in this report as PV. PV is an important
strategic intent for S7, because they have commenced making coffee and selling Krispy Kreme
products in their stores (Fragra, 2015). Despite being high priced compared to City Convenience
(Luka, 2016), S7 attract more customers (Rapid, 2016). The PV strategy seems to have worked for S7.

Potential Failures of Current Strategic Intent

Several scenarios (that currently do not exist) may occur in the future and may make S7 a
problematic company. These include:

1. Internal environment. The R&D efforts at S7 is minimal as the company has depend to a
large extent on third party FMCG goods to stock its shelves. The company has not been
successful at creating product-level brand awareness (Peters, 2016).
2. The external environment. This includes competitors, such as City Convenience, and
Woolworths Metro as well as online fast-to-base retailing.

Recommendations

Of the myriad options available to S7, the following are practical solutions to the PV problem:

1. Develop a network of sub-retailers, smaller than S7, to seel quick, lower-cost, accessible
FMCG product. This will help capture the lower cost market.
2. Work with the S7 supply chain to expand into cakes and bakery as this will compete directly
with Wild Bean and City Convenience and uses the S7 strength of being in the metro area.

References
Massaro, M., Dumay, J. and Bagnoli, C., 2015. Where there is a will there is a way: IC, strategic
intent, diversification and firm performance. Journal of Intellectual Capital, 16(3), pp.490-517.
Mok, Y.S. and Youn, L.S., 2014. A Study on Strategy of Supply Chain Management of 7-Eleven
Japan. , pp.36-41.

Rothaermel, F.T., 2015. Strategic management. New York, NY: McGraw-Hill.