7 Eleven Japan Case Study

INDIVIDUAL ASSIGNMENT: Choose one of the case studies in Albaum and Duerr (2011 or later). Answer the case questions and apply the PSE model.

Name: Chijioke Innocent Mbachu

P/No: 850503-2634

Course Code: 4FE126

Course: International Marketing Strategy

Paper 1: Case Analysis

Case Chosen: Chapter 5 – Market Selection:

CASE STUDY 5:2 – 7-Eleven Japan

Question 1: What factors accounted for 7-Eleven’s initial success in Japan?

Answer: In Japan, the concentration of the population in a few metropolitan areas, and the wide spread use of trains and buses for commuting to major business districts, meant that there were many locations with high traffic volumes. These environmental factors encouraged the Southland a USA originated initial owners of 7-Eleven to pursue a strategic alliance with Ito-Yokado, a large Japanese supermarket chain operator to help introduce 7-Eleven brand in the Japanese market.

7-Eleven: Recognized these as an opportunity where others saw it as potential problems. According to Pehrsson (2000), the successful exploitation of the market opportunity in these case as shown in the Japanese successful entrance strategy of 7-Eleven can be seen that the organization relied initially on it relevant corporate strategy competence.

Pehrsson (2008) highlighted that this strategic alliance in the form of joint venture preference is said to be an organic entry mode and is the common way of entering foreign markets use by large corporation such as Ericsson. The joint venture was highly successful with 7-Eleven becoming the largest convenience store operator in Japan and eventually in 1990 due to the financial problems back home in the US sold its shares to Japans Ito-Yokodo which later acquire the brand 7-Eleven, thus making it become today a Japanese owned brand.

Question 2: What factors accounted for 7-Eleven’s continuing success in Japan?

Answer: 7-Eleven: Continuing to lead the industry in innovation (e.g. easy payment services) which made the company becoming the leading convenience store chain with its varieties of products and service it offers to customers on 24hrs operations. Additional, 7-Eleven from it US origin applied its corporate strategy competence in the Japanese market which is said to be consisted of business relatedness and market experience (Prahalad & Hamel, 1990).

Question 3: Would it appear to be a good idea for 7-Eleven in the US to offer payment services? Why? or Why not?

Answer: Yes it will appear to be a good idea for 7-Eleven in the US to offer payment services. Looking into the Japanese case, the payment services helped attracted potential customers (new & old) to 7-Eleven stores whom some for the initial moment were also drawn to attention about the other convenient products (such as food & beverages) the 7-Eleven chain are offering.

Question 4: What might be the reasons for 7-Eleven’s not being in most European countries?

Answer: The major reason 7-Eleven could not breakthrough in most European countries was as a result to key entry barriers. According to Pehrsson (2008), these entry barriers are apparent situations such as government set of laws or regulations, the necessity of reaching customer acceptance, and the necessity of adapting the technology to local standards; discouraged 7-Eleven in entering most European countries other than the Scandinavian countries which have various similarities that enabled breaking such barriers.