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Creating a proper strategic management plan plays a very important role in the identification of the internal in addition to external working environment of a company. In addition to this, it also helps in offering a total path by building designs as well as tactical plans to attain policies and after that disbursing the assets to execute those plans. This study is also related to the same concept where the case of 7 - Eleven's Digital Strategy which is focussing on increasing client communication will be discussed in detail. The entire study will be based on the digital innovation of the company based on which both the internal and external environment of 7- Eleven will be discussed. In addition to that various models and theories will also be used based on which proper strategic directions will be given.
PESTEL Analysis
The pestle analysis of 7-Elevn will evaluate the brand on its operating strategies. It will be important to conduct the pestle analysis as it will assists companies like 7-Eleven to comprehend the business sector's dynamic and helps in improving its functioning on a daily basis.
Political Factors: The amount of exploitation along with ferocity within the host nation impacts the functioning of 7-Eleven. In addition to this, the business sector of the company might also be affected by the international import strategies, international stresses, fresh controlling units along with regimental regulations (Janet, 2013).
Economic Factors: The expenditure design of the nation is considered to be the main macro aspect that might have a huge effect on the functioning of companies like 7-Eleven. Employee efficacy within the USA has important developed within the past two years. Though the compensation has not developed as compared to the productivity of the employees. The introduction of the technology to create better customer interaction has helped in gaining financial strengths but the employee betterment is still lagging. This also has facilitated the 7-Eleven to recruit experienced labours at cutthroat wages (Buye, 2021).
Social Factors: Transformation within the working technique has impacted society as a whole in the case of 7-Eleven. As the entire strategy in the case study is related to serving clients only thus it can be said that socially they are very much b. According to 7-Eleven digital transformation in the choices and demands of clients affected the 7-Elevens business sector. It has also been noticed that while introducing the new digital edge the degree of power and mentality towards power fluctuates amongst various societies. Amongst the Asian economy, authority is regarded while in the west it isn't. The disposition towards power ought to be considered prior to send off a showcasing effort (RASTOGI, 2016).
Technological Factor: From the case study itself it can be identified that 7-Eleven is focussing on the deployment of digitalization of different techniques to deal with some of the most significant issues of client interaction. In addition to this, they are also focussing on the Cell phone Payment options by means of introducing scan-and-go technology. Considering the impact of the technology on the functioning of the company the management of the company thinks that the way to progress is not any one sort of new innovation, as indicated by Paytronix. Retailers will probably succeed assuming they use the information to assist the transformation and remain one step ahead (Matovic, 2016).
Legal Factors: Considering the legal aspects of introducing the technology within its functioning it will be important for 7-Eleven that it must be cautious in regards to the information security regulations and what steps it ought to take to agree with them.
Numerous nations are extremely rigid considering such information regulations, for example, the EU, which denies the development of information of residents beyond EU nations.
Environmental Factors: 7-Eleven has laid out associations with two associations to provide a path to its current circumstance exercises, for example, - Conservation International and Retail Industry Leaders Association. Preservation International is a charitable association that is committed to building a prosperous planet through the effective utilization of science, innovation, and conglomerate.
Considering the overall PESTLE done for 7-Eleven it can be said that for any sort of new introduction companies goes through various ups and downs. In case of 7-Eleven it can be seen that the company is operating in various nations as a result the company has to create strategies based on every single nation on the retail sector explicit needs. Also considering the economic aspects it can be identified from the study that though the prospective of getting profit is huge but considering the employee salary segment it is very low due to which they have to hire experienced workers in the team. The overall macro environment study of 7-Eleven has helped in understanding the outside forces like government, community and technology plays a very important role in shaping the future of the company. While the company is planning to introduce technology to improve the client communication thus considering all these factors will help the 7-Eleven company in gaining trust and the desired result which they planned.
The internal analysis will be significant for understanding the internal capabilities. The internal analysis is considered as an exploration of organisational competency, position of cost and competitive viability in the market. The internal analysis incorporates some measures which help to provide information about strength, weakness, opportunities and threats about 7-eleven which are as follows:
SWOT
Strength
In the past seven years, 7-Eleven has developed a strategy for being compensated hooked on innovative marketplaces and achieving success. 7-Eleven has built a reliable circulation network that can reach most of its aptitude market over the years (WANG, 2018). As a result of the expansion, the agency has been able to create new sales and diversify its monetary cycle opportunities. The organization also makes an investment in developing a healthy emblem collection.
Weakness
Despite the product's good quality, its marketing and advertising failed to impress. The inefficiency of its forecasting ability leads to a greater cost of missed opportunities to evaluate its competitors. Through the brand new entrants inside the section, the company no longer can meet the needs of the gift and has misplaced a small market share in the specialty areas.
Opportunities
7-Eleven has the opportunity to use differentiated pricing methods in the new era. However, the new possibilities develop some level of gambling subjects for the different gamers in the industry. The adoption of the newest generation preferred and authorities’ free alternate settlement has provided 7-Eleven with the opportunity to penetrate a rising market (Shastri, 2022). 7-Eleven customers enjoy lower interest rates due to the low inflation rate within the marketplace, allowing them to have more credit scores.
Threats
Innovative technology that is aided by a competitor or marketplace disruptor will become a major threat for the enterprise in the medium to long term. Due to 7-Eleven's cash handling capabilities and availability on a 24/7 basis, it's a common target for theft and armed robberies (YIFANG, 2018).
VRIO Framework
The VRIO framework helps understand the internal resources for assessing the competitive advantage. In the 7-Eleven VRIO Analysis, 7-Eleven's distribution network was found to be a valuable resource. This will helps to reach more customers and help to ensure a high level of revenue. The distribution network of 7-eleven is rare the VRIO framework analyses that. The financial resource is considered as costly to imitate that is examined by VRIO Framework as it is acquired by the huge profits in some years. Thus, the company's resources are organized for analysing the different strategies and appropriate use of different opportunities and battling the threats (LEE, 2022). Hence, the resources are proving to be effective for the sustained competitive advantage of the organization.
McKinsey 7S Framework
The framework is very long and it is used in the organization system for identifying the different levels, forces along with internal power. Further, it can be used with another impact also and it is a strategic vision of different business units along with the teams. Further, the 7Ss are structure, strategy, systems, style, skills, staff, and shared values. Thus, it helps to analyse the internal environment of the business.
In order to protect its competitive advantage, 7-Eleven should balance short-run cost reductions with long-term savings. As a result of the pandemic, the company's structure and supply chain management have been challenged. Rather than being bound by climate-related, geopolitical, or other disruptions, 7 eleven should focus on diversifying its suppliers geographically so that it is better prepared for future disruptions of similar magnitudes. 7 Eleven should concentrate on improving the internal process like managing risk and making improvements in customer relationship management (Jollyta, and et.al. 2021). Further, 7 Eleven need to make improvements in human resources such as building small interactions along with technical demonstration. The skills include the development of a training program for the people to work in an appropriate manner. In a remote scenario, leadership styles are completely different from those required at a physical location. A core value-driven business model has been developed as a result of the organization's vision, mission, and core values.
In order to assess the industry efficacy, Porter 5 Forces evaluation toll will be deployed to evaluate the 7-Elevens competitiveness. From the given list of the countries, particularly from he given list Malaysian sector has been selected.
Porter’s 5 Forces Analysis
The threats of new entrants: The system that has been acknowledged by 7-Eleven that is focussing on expanding the customer communication increases the risks of new contestant. This implies that the risk of new candidates is high. Though the company has already gained financial scale by means of administering an influential client bases still most of the convenient store be it a new entrant or already established one their prime focus is on giving the best client service through proper communications.
Threat of substitutes: It can be noticed that there are numerous alternatives for the sector within which the 7-Eleven company is operating. The clients can decide to buy their food and drinks from nearby bread kitchens and cafes also. Further, with big brands for example Amazon and Wal-Mart putting exceptionally in Omni channel retail encounters and 10-minute basic food item conveyance organizations coming up, the accessibility of substitutes is high.
Bargaining power of clients: The number of the clients for various convenience shops is usually elevated. The deals generated per clients are very little as contrasted to the overall profit of the firm. This is due to the reason that huge scale of functions and the various sites the 7-Eleven is operating. This inferior focal point of clients decreases the negotiating power.
Bargaining power of suppliers: Since 7-eleven functions for a huge scope, they have a more prominent say in what manner the items are valued, as they cause no exchanging costs in an industry with a low grouping of providers. Further, the providers don't represent an issue of forwarding mix for example selling their items straightforwardly to the purchasers. Consequently, the negotiating force of providers is high here.
Competitive Rivalry: A few of the significant contenders of 7-eleven are Murphy USA, Walmart, Wawa, Spar, and so forth. The overall business sector is around 4900 billion USD. The forecasted CAGR is around 8.5% which implies it is an average developing industry. In view of the huge number of players, there is an extreme contest for business sector share (Bhaskar, 2019).
Based on the above evaluation below mentioned are some of the strategies for 7-Eleven that will help in improving the cutthroat edges as well as the business sector position.
Apply theories and concepts with strategic planning
In case of 7-Eleven, there are different theories and concepts which can be used to make a strategic planning for the organisation.
The Ansoff Matrix
Ansoff Matrix is a significant strategic tool which is used by 7-Eleven for the global operations and on the business for making strategic decisions.
Market Penetration: The increase in capacity of production by 7-Eleven allows the organization to reach more customers by controlling the overhead cost-effectively. There is an increase in the market investment with enhancement in the distribution by exploring new channels of reaching people. However, the competitive pricing strategy helps 7-eleven to increase the level of sales and enhances the penetration (Agnihotri, and Bhattacharya, 2021).
Market Development: The management of 7-Eleven must invest in the process of research and development for analysing the new segments of consumers for the products. Brand awareness is a major priority for the business to enhance the visibility of the products and motivate customers to make changes in their purchase decisions. Additionally, 7-Eleven should educate consumers about its new markets. It creates awareness among the customers regarding the products which make changes in the strategy of market development.
Product Development: The product development of 7-Eleven drives in a different manner like modifications in existing products with enhancement in offerings which lead to increased sales and profit (Villarreal, and et.al., 2021). The launch of new products is considered as a major aspect of the development in the business as well which is important for dealing with product development. The strategic partnerships help the company to explore different areas for product development that provide a valuable aspect for considering the changes in services.
Diversification: The management of 7-Eleven headed towards horizontal diversification where they decided to introduce new product development. It is beneficial for the business and enhancement the economic environment with proper visibility (Serrano, and et.al., 2018). It helps the organization to make changes according to the requirements of customers and satisfy them with the reliable products.
So, from the overall study it can be concluded that strategic decision making provides a lot of benefit to 7-Eleven. The study has successfully explained both macro and micro environmental effects over the company and from the analysis it has been identified that with the introduction of the digitalization they are performing far more better as compared to other competitors.
Agnihotri, A. and Bhattacharya, S., 2021. Luckin Coffee Inc.: Achieving Competitive Advantage Through Blitzscaling. In SAGE Business Cases. SAGE Publications: SAGE Business Cases Originals.
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Villarreal, M., Elizondo, M., Ocañas, V. and Villarreal, B., 2021, March. A lean approach for reducing inventory for a Mexican convenience store network. In Proceedings of the 11th Annual International Conference on Industrial Engineering and Operations Management, Singapore (pp. 557-563).
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