7-Eleven Inc.’s Corporate Analysis

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Executive Summary

7-Eleven is a subsidiary of ‘Seven & I Holdings Co.’ of Japan, founded in 1927, is an international chain of convenience and supply stores and has been operating under the banner of 7-eleven ever since 1946. 7-Eleven, Inc. also once popularly known as ‘The Southland Corporation’ till April 1999 is indisputably the largest international corporation, operating, franchising, and licensing the 7-Eleven stores, with over 18,200 stores in 18 nations, primarily under the 7-Eleven banner.

Approximately, 2,200 of the outlets proffer self-service for gasoline, mostly sold under the ‘Citgo’ brand of the ‘Citgo Petroleum Corporation’. The company operates 5,560 7-Eleven stores in 30 states of America and five provinces of Canada.

The largest area licensee of the 7-Eleven Corporation is the ‘Seven-Eleven Japan Co., Ltd.’, which manages 7,605 stores of 7-Eleven in Japan along with 48 stores in Hawaii. Additional chief international regions are Taiwan which has 1,908 stores, Thailand encompassing 1,105 stores, China comprising of 398 stores, Australia consisting of 177 stores, South Korea with 171 stores, Malaysia containing 151 stores, and the Philippines encircling 149 7-Eleven stores.

The 7-Eleven, Inc. corporation is 65 percent share is owned by ‘IYG’ Holding Company, which is consecutively cooperatively owned by ‘Ito-Yokado Co., Ltd.’ and ‘Seven Eleven Japan’. ‘Seven Eleven Japan’ has a 50.3 percent share in Ito-Yokado, an important Japanese retailer.

In the year 1991, Ito-Yokado, a subsidy of the Japanese Supermarket chain, now known as ‘7-Eleven Japan’ acquired a majority holding of the Southland Corporation, and ultimately renamed it as ‘7-Eleven, Inc’ in the year 1999. The company has never looked back since then, and has made rapid and incessant progress in the business world.

Birthday of 7-Eleven

July 11 (7/11) is the official birthday of the 7-Eleven® convenience store chain.

The Slogan of the 7-Eleven Corporation is “Oh Thank Heaven for 7-Eleven”.

Ever since March 2007, the united corporation of 7-eleven, has been recognized as the biggest chain store in every category, even exceeding the mighty McDonald’s, by one thousand stores (www.7-Eleven world’s largest chain store.com).

7-Eleven when a Southland Ice Company employee started selling convenience items outside the company, at an improvised storefront. The name 7-Eleven has been in use since 1946.

Originated in Dallas, Texas, 7-Eleven manages franchises and licenses of over 7,500 7-Eleven® stores in North America whereas its global network, includes the management of franchises or licenses exceeding 33,700 stores in 18 countries and American regions giving it a strong foothold in the eighteen countries, and its principal markets are Japan, (encompassing 11,704 store, which amounts to a third of its stores) America, (the second largest market with 6,031 stores) Taiwan, (which has 4,511 stores) and Thailand (with 3,912 stores). It has been constantly graded in ‘Entrepreneur’s Franchise 500, and was graded at the number one franchise position in 2008 by Entrepreneur, defeating Subway, which held onto the number one spot for a long period of 15 years.

Additionally, 7-eleven was also taken position in the 38th place in ‘Fastest-Growing Franchises’ along with number 2 position in ‘Low-Cost Franchises’.

According to Joseph DePinto, president and CEO of 7-Eleven, a new 7-Eleven store opens someplace in the world about every four and a half hours (7-Eleven, Inc.). The corporation prides itself in possessing a “proprietary IT system”, which assists franchisees in deciding their precise in-store merchandise range and makes a conduit of new products accessible every week (7-Eleven, Inc.). The franchisees of 7-eleven profit from the exclusive brand name, and additionally from being in the economies of scale of the huge network of the organization. Nevertheless, what actually provides 7-Eleven its soul is the local flavor that it reflects.

The address of the company Headquarters of Japan is ‘8-8 Nibancho, Chiyoda-ku, Tokyo, Japan 102-8455, and that of the USA is One Arts Plaza, 1722 Routh Street, Suite 1000, Dallas, Texas, USA 75201.

The important people of the company are Toshifumi Suzuki, who is the Chairman of the company, Joseph M. DePinto, who is the President (CEO) along Masa Asakura, who is the EVP (COO) (7-Eleven, Inc.).

7-Eleven is the official sponsor of the ‘7-Eleven Cycling Team’ and of Tony Kanaan Andretti, of the ‘Green Racing IndyCar’ who ranks at the number 11 position in the ‘Indy Racing League’ (7-Eleven, Inc.).

History and Current Status of the Corporation

The Tale of Convenience Shopping

The 7-Eleven Corporation of convenience store chain was founded in the year 1927 Dallas, Texas, USA, when a enterprising ice-dock staff member of the ‘Southland Ice Company’, in addition to selling blocks of ice to refrigerate food, wanted to sell convenience products from the ice-dock (website 7-Eleven, Inc), on Sundays and evenings when grocery stores were closed, outside the company premises, at the makeshift storefront.

Creation of the Store (1927-45)

The company was thus established as a brainstorm of John Jefferson Green. In the year 1927 Green approached Joe C. Thompson, popularly called, ‘Jodie’, who was one of the five founder managers of the ‘Dallas Southland Ice Company’, with an innovative proposal. He desired to sell milk, eggs, and bread through the retail ice dock. “You furnish the items,” he suggested, “and I’ll pay the power bills.” Thompson immediately consented, and jointly they instituted the foremost recognized convenience store (7Eleven-Inc-Company-History).

First Advertising attempt and Branding

The company first attempted a marketing strategy when a director of Southland traveled to Alaska in the year 1928. When he returned to Texas, he placed a memento totem pole facing his store. The pole fascinated and attracted so many customers, that the staff proposed placing one pole at all the Southland held retail ice docks and designated the stores as ‘Tote’m Stores,’. Consequently, Southland adopted the new name since it served the prime purpose of unifying the expanded and spread out stores of the company thereby providing a distinctive individuality, which is a crucial aspect for the efficient management of several retail stores. Thus Southland turned into the leading ice operator in Dallas and subsequently a leader in convenience store chains too.

Staff Training Culture

Joseph Thompson, the secretary and the treasurer of the ‘Southland Ice Company’, united the stores additionally by training the staff with regular sales discussions. He selected a uniform for the ice station staff of the company. Thompson acknowledged in the very beginning that customers ought to be given the identical quality and service at each store. It was at the same time that the Southland Company also began its experimentation with building and renting out petrol pumps in the premises of the Dallas stores.

With the commencement of the Second World War, the requirement for ice was at its highest point and Southland became the principal trader of ice for the American Army’s biggest training camp. The spectacular augments in trade incited the restructuring of the company. Southland then acquired ‘City Ice Delivery, Ltd.’ which included the acquisition of two modern ice plants, along with 20 retail stations, and property on ‘Haskell Avenue’, the new site for the company headquarters.

Even though other grocery units and common retailers were conducting business in the nearby vicinity, the supervisors of the ice plant realized that selling “convenience items” such as bread and milk were accepted. In due course, numerous such settings were opened in the Dallas area. Thus a novel idea of convenience vending was born.

The new company came to be known as the ‘Southland Ice Company’ was a group of four individual ice companies which controlled and managed eight ice plants including 21 retail ice stations.

Initially the outlets were popularly called ‘Tote’m’ stores since customers “toted” away what they bought. It was much later in the year 1946, that ‘Tote’m’ turned into ‘7-Eleven’ to symbolize the new schedule of service hours from 7 in the morning to 11at nights, all through the week and ultimately the company changed the corporate name from ‘The Southland Corporation’ to ‘7-Eleven, Inc.’ in the year 1999.

Today, 7-Eleven is the undisputed leader in convenience retailing with more than 30,000 stores operating in the U.S. and 18 other countries and total sales of more than $43 billion in 2005.

In the beginning, these units functioned from 7 a.m. to 11 p.m., due to which the corporation gets its name. The corporation started to exercise the 7-Eleven name in 1946 and by 1952, 7-Eleven had established the 100th store.

The year 1962, marked 7-Eleven’s foremost experimentation with a 24X7 schedule in Austin, Texas (About.com.), and in 1963, day-and-night stores were instituted in Las Vegas, Fort Worth, and Dallas ( 7-Eleven, Inc.).

7-Eleven 24×7

7-Eleven’s decision to remain open for 24 hours happened by chance in 1962, at a store in Austin, Texas. The ‘7-Eleven’ store was situated in close proximity to the university campus. On a Saturday night, following a game of football, the 7-Eleven witnessed so many customers, and was so busy that it did not shut. In due course, the supervisor kept the store open for the entire 24 hours a day, all through the week, which proved to be a very successful attempt.

Almost immediately, 7-Eleven revolutionized the schedule by opening 24-hour stores in Dallas, Fort Worth and Las Vegas, and this never-ending work schedule was adopted by most of the company outlets. Currently, a majority of 7-Eleven worldwide stores function at a 24 hours a day schedule.

In about the 1980s, the corporation began to experience monetary trouble and was salvaged from impoverishment by Ito-Yokado, its principal franchisee. It was then that the Japanese company acquired commanding share of 7-Eleven and Ito-Yokado initiated the Seven & I Holdings Company following which 7-Eleven turn into its subsidiary. In the year 2007, Seven & I Holdings declared they would be significantly intensifying their operations in the United States, with additional 1,000 7-Eleven stores in America.

The corporation has a globally spread business in about eighteen countries, of the world, some of which are listed below.

NASDAQ Listing

By using an innovative computer inventory technique, the 7-Eleven Corporation was able to identify its assets and noticed that sole product items, sold best and the company dedicated itself to the successful establishment and management of the 24-hour store, which steadily increased from 817 in 1972 to 3,703 by 1975.

The ‘Southland Corporation’ was incorporated under the able leadership and management of John Thompson as the company’s second president and Jere Thompson as vice-president of sales in 1961. In the year 1963 the company began its franchising operations and enabled the company sales to reach one billion USD and in 1972 the company became a member of the New York Stock Exchange the following year.

Australia

The earliest 7-Eleven in Australia was initiated in the year 1977 and presently there exist 366 7-Eleven stores in the states of Victoria, New South Wales and Queensland, the maximum units existing in the metropolitan locales. The stores are held and controlled as franchises, with a central management.

Canada

Canada encompasses, some 7-Eleven stores containing gas stations where the petrol is dispensed by ‘Shell Canada ‘or ‘Petro-Canada’ with some merged with an Esso. It was in November 2005, that 7-Eleven initiated a wireless service entitled the ‘7-Eleven Speak Out Wireless’. As of today, 7-eleven also has an ATM service operated through the ‘Canadian Imperial Bank of Commerce’.

Hong Kong and Macau

7-Eleven was established in Hong Kong in 1981, owned by the ‘Dairy Farm’. This was the 711th store in Hong Kong on the 11th of July 2006, (which is also celebrated as 7-Eleven Day), in the ‘Causeway Bay’ region of the city (7-Eleven.com). With maximum locations being in developed regions, around 40 percent are licensed stores. In September 2004, the ‘Dairy Farm’ procured ‘Daily Stop’, which is also a convenience store chain situated largely in the territory of ‘Metro’ stations, and subsequently transformed them into 7-Eleven stores instantaneously, following the acquisition.

In the year 2005, 7-Eleven made its entry into the Macau market which now envelops over 20 operating stores.

Japan

Japan has the maximum 7-Eleven stores than any other country in the world. There are 28,123 7-Eleven stores worldwide, with 11,500 of them situated in Japan. Tokyo alone comprises 1,396.

The general appearance of the Japanese 7-Eleven stores is to some extent dissimilar from those situated in the United States. Even the variety that the 7-Eleven stores of Japan offer is extensive including several products as well as services. The Japanese 7-Eleven stores not only offer eatables such as food and drinks, along with magazines, but additionally video games for children and the youth, consoles, music CDs, DVDs, digital card readers along with other seasonal products like Christmas cakes, valentines day chocolates, and fireworks.

Malaysia

The 7-Eleven stores of Malaysia are possessed by the ‘Convenience Shopping Sdn. Bhd.’ (CSSB) which currently manages nearly 800 stores countrywide with a future expansion strategy to own 1000 stores. 7-Eleven in Malaysia was established on the 4th of June 1984 by the ‘Berjaya Group Berhad’.

Mexico

In Mexico the 7-Eleven stores are known as ‘Super 7’. In 1995 the name was changed to 7-Eleven, but the original name ‘Super Siete’ continues to exist in many places.

Philippines

The 70-Eleven stores of the Philippines are administered by the ‘Philippine Seven Corporation’ (PSC) and the first store was initiated in the year 1984. In the year 2000, the ‘President Chain Store Corporation’ (PCSC) of Taiwan, which is also a franchisee of 7-Eleven, acquired the majority of shares of the ‘PSC’ thereby forming a strategic association including the entire convenience stores of the region.

Scandinavia

The proprietor of the Principle franchise for the 7-Eleven corporations in Scandinavia is Reitan Servicehandel, which is a division of the Norwegian retail ‘Reitan Group’ with all of the 7-Eleven stores licensed. The earliest 7-Eleven was established at Grünerlokka in Oslo in Norway, on the 13th of September 1986 and presently there are about 105 establishments of 7-Eleven stores in Norway out of which more than are in Oslo.

Singapore

Singapore encompasses the largest chain of Convenience Stores of 7-Eleven all over the Island enclosing nearly 400 7-Eleven stores which are spread all over the country. In Singapore, the stores are controlled by the ‘Dairy Farm International Holdings’, under a franchise agreement with 7-Eleven Incorporated of the United States of America.

The original 7-Eleven stores in Singapore were initiated in the year 1983 with a license under the ‘Jardine Matheson Group’. 7-Eleven of Singapore has also lately signed an agreement with ‘Royal Dutch Shell’ to include its convenience stores in all ‘Shell Petrol Stations’.

The 7-Eleven stores of Singapore function24 hours, with the exception of stores located in the hospitals, MRT Stations, Raffles Junior College, Singapore Management University and Nanyang Technological University, which follow a regular functioning schedule.

South Korea

7-Eleven has a prominent presence in the South Korean convenience store market where its prime competitors are ‘Mini Stop’, ‘GS25’, and ‘Family Mart’ along with other independent competitors. In spite of heavy competition, there are 1,513 7-Eleven stores in Korea, ranking just below the USA, Japan, Thailand and Taiwan in the number of stores. The Korean 7-Eleven stores do not provide the branded range of products such as the ‘Slurpee’ or the ‘Big Gulp’.

Taiwan

Taiwan takes the prize for having the highest 7-Eleven store density in the world and it is normal to see two 7-Eleven shops, face to face, in Taiwan.

It is thus, one of the most popular convenience stores of Taiwan and is owned by ‘The Uni-President Chain Store’. The first store was established in the year 1980 and has since escalated to include 4037 stores as in the year 2006 (About 7-Eleven). Taiwan ranks third in the world for the number of 7-Eleven convenience stores it contains.

Thailand

The master franchisee of the Thailand 7-Eleven stores is the ‘Charoen Pokphand Group’, which in turn gives 7-Eleven sub-franchisees to the operators. Thailand contains 4,300 7-Elevens, with 1,500 of them in Bangkok, marking Thailand at the 4th position for the number of stores subsequent to the US, Japan and Taiwan.

United States

‘Alon USA’ is ranked as the largest 7-Eleven franchisee of North America.

In the USA, the only autonomously possessed 7-Eleven stores are situated in the Oklahoma City of the Oklahoma City area where nearly 100 7-Eleven stores are solely owned by Jim Brown and his family having slight variations in the range of products served at the stores. The stores do not serve hotdogs or nachos but instead, serve their own range of bakery products under the brand ‘Seventh Heaven’ (The Oklahoman).

Current Products and Services

The 7-Eleven corporations comprise of a wide variety of products and services which enable it to stay at the top of the business ladder. The range is extensive and new innovative products are constantly introduced in accordance with popular public demand.

They recognized that with technology enhancement, they could use the ATM to sell more per square foot. Money orders embody a huge business for 7-Eleven with money orders to the tune of more than 4 billion USD each year. They accordingly have new expanded ATM, which is called the Vcom, which allows the company to accept cash at the machine and print the money order for the customer using self-serve, and does wire transfers along with acting as a traditional ATM.

Beside this, in the Cash & Communication section there are a number of services:

The 7-Eleven SpeakOut Wireless sm Services which enables instant usage with a very low rate for talk time @ $0.15 per-minute on-network rate and an annual validity.
7-Eleven® Unlimited Nationwide Nights and Weekends in which there is an absence of contracts, daily fees as well as activation fees. The purchase of a $40 airtime card enables limitless national nighttime usage and weekends for one month, in addition to 200 anytime minutes and the service is available at several 7-Eleven stores.
The 7-Eleven® Visa® Credit Cards enable the customers and users to buy and get rebates each time they use the card to buy products from the 7-Eleven store. There are several other services that can be availed at the 7-Eleven stores including the
7-Eleven® Gift Card essentially to be gifted to someone.
Boost™ Mobile Features,
Virgin Mobile,
Prepaid Wireless Time Cards,
Other Gift Cards,
ReVoS PrepaidMobile,
Automated Teller Machines,
Vcom and Money Orders are the other services in this section

In the foods section of the 7-Eleven stores, there is a wide range of fast foods available. The ‘Hot Off The Grill’ section includes

1/4 Pound Big Bite® Hot Dog is a ready-to-eat hot dog and serves as a quick lunch, dinner or an anytime filling snack!
Savory Chicken Bite is white meat tasty Chicken grill.
Big Bite® Hot Dogs are available as regular 1/8 pound option or 1/4 pound option of Oscar Mayer hot dog. The proprietary beef recipe was developed exclusively for 7-Eleven and is un-available at any other outlet.

In the Fresh Foods category t-7-Eleven serves the following eatables.

Breakfast Sandwiches with a wide selection made from choice ingredients.
Turkey and Zesty Havarti on Wheat Nut Bread is a combination of tender slices of roasted turkey, layered across soft walnut-wheat bread and topped with silky horseradish-chive Havarti cheese, sweet grilled yellow onions, crispy bacon, cool Romaine lettuce, and creamy mayonnaise.
Big Bite® Hot Dogs is an ‘Oscar Mayer’ hot dog sandwich serving as a breakfast or brunch snack.
7-Eleven’s Sandwiches include a wide range of sandwiches.

In the Bakery section, the stores serve

7-Eleven Bakery Brownies are made from high-quality chocolate and walnuts, and are available in a variety of flavors.
7-Eleven Bakery Cookies include the chip or oatmeal raisin cookie made daily with the best quality ingredients.
7-Eleven Bakery Donuts are a wide selection of tasty donuts made from high-quality ingredients and delivered fresh daily from neighborhood bakeries.
7-Eleven Bakery Muffins are a range of delicious muffins made from wholesome ingredients and fine quality fruits, nuts, and spices.

The Tasty Beverages range comprises a wide selection of hot and cold beverages.

The Frozen Refreshments include the Slurpee® Beverage which is supposed to be “America’s favorite frozen drink, the coolest beverage on the planet”. It is a concoction available in variety of flavors and sizes ranging from 12 ounces to 40 ounces.

Fountain Drinks are also part of the beverage section and are available in different forms.

The Big Gulp® Car Cup, as the name signifies is a sturdy plastic Cup providing 32 ounces of cool refreshment and the cup can easily fit in the cup holder of most vehicles making it easy to drink when driving.

The Big Gulp® Fountain Drinks is a preferred beverage in beverage in a special 40 oz cup.
The Super Big Gulp® Cup offers beverages in a 44oz capacity cup for those extra thirsty times.
The 7-Eleven X-treme Gulp™ Mug is a 52-ounces capacity mug that enables the drink to stay cold for more than six hours and has a specially designed lid to prevent spilling.

The Hot Beverages section includes a variety of tea and coffee options such as:

‘Cappuccinos, Hot Chocolate & Tea’ and the
‘Guaranteed Fresh 7-Eleven® Coffee’.

The ‘Energy, Nutritional & Diet Drinks’ selection comprises of ‘BAZZA High-Energy Tea’ which are teas are made with 140mg of all-natural caffeine and are zero-calorie energy beverages. The drinks are made using

Green tea,
Yerba mate,
guarana, and
Cola nut thereby acting as powerful antioxidants.
The drinks are available incomes in two flavors of Raspberry and Green Tea.

Packaged Soft Drinks that are served at the store are

Coca-Cola® such as the Coca-Cola Classic® and
Diet Coke® in multi-pack cans or bottles.
Sprite is also available in the recognizable green can.
Pepsi® Products too are served at the stores and similarly comprise of the regular Pepsi,
Diet Pepsi or
Mountain Dew.

Juices & Tea

This section comprises Lipton® Iced Tea served in a bottle, freshly brewed and cold-filled available in a wide range of flavors with or without sugar in 20-ounce bottles. (7-eleven.com)

Snapple® Juice Drinks are fruit juice drinks in 12 delicious flavors in convenient 16-ounce bottles. (7-eleven.com)
Snapple® Iced Teas are brewed iced teas in 11 varieties available in 16-ounce bottles.
Minute Maid® Premium Apple Juice full of vitamins and minerals is available in 16-ounce bottles.
Minute Maid® Premium Orange Juice is available in a choice regular orange juice or ‘OJ’ with extra calcium added in 16-ounce bottles. (7-eleven.com)
Ø Nestea® Iced Tea is available in a range of freshly brewed iced tea or cold-filled tea in 20-ounce bottles in a wide range of flavors. (7-eleven.com)
Ø Tropicana Pure Premium® Juice is available in 16 ounces, 32 ounce, or 64-ounce tetra packs available with or without pulp. (7-eleven.com)
Ø V8 Splash® is a fruit juice drink by Campbell’s for the active, health-conscious adults and is available in a selection of tasty flavors. (7-eleven.com)

Bottled Water is available at most 7-Eleven outlets, which is the company’s own brand of ‘Quality Classic Selection® Spring Water’ spring water. It is lowly priced and available in four sizes of ½ liter, 1 liter, 1.5 liters or the gallon bottle. (7-eleven.com)

Dairy

The daily dairy necessity fresh Milk is available at the stores all through the week.

Wine Segment

Apart from the wide array of food and grocery items 7-Eleven stores additionally serve an extensive range of Wine products including, the

Barefoot California Chardonnay,
Beringer® White Zinfandel,
Columbia Crest® Chardonnay,
Gallo of Sonoma Chardonnay,
Thousand Oaks California Cabernet Sauvignon,
Turning Leaf® Vineyards Chardonnay and
Woodbridge® Chardonnay (7-eleven.com).

Beer Segment

Among the varieties of Beer served at the 7-Eleven stores are the likes of

Budweiser®,
Bud Light®,
Chelada®,
Beck’s Beer®,
Heineken®, Tecate,
Miller® Lite. (7-eleven.com)

The corporation has recently launched a 7-Eleven Fleet Services Card which is a fuel charge card and is accepted at all places where ‘WEX’ is accepted. Additionally, most 7-Eleven stores in the United States and Canada encompass ‘Automated Teller Machines’ or ATMs 24 hours a day, 7 days week. (7-eleven.com)

Opportunities and Threats

Over the previous years, 7-Eleven has set up novel inventory systems, ready-to-eat fresh food and beverage programs, instituted new franchise contracts and by and large developed an infrastructure that facilitates companies to derive the optimum results at the same time allowing capitalists to manage their own stores (www.dallasnews.com).

On average, a ‘7-Eleven’ store produces more than $1.5 million of sales a year.

As per the International Franchise Association, the 7-Eleven franchise business is constantly mounting providing innumerable opportunities to the company (www.dallasnews.com).

The 7-Eleven Corporation endeavors to serve their customers 24 hours a day and with the average working age of employees becoming younger and people getting busier, they need products and services at all hours. In America alone, the work schedule has altered radically with more jobs necessitating late-night or early-morning schedules. Many American factories function day and night with three shifts. As a result, Americans are working till late and rise up early to report to work, due to which they require an expedient place to shop for their needs.

The people who work at night belong to a diverse range of professions, from automobile and cab drivers to police force and firefighters and even service workers and hospital staff along with manufacturing human resources. There may also be parents with sick children or simply travelers desiring food and drinks.

It has been reported in an article that there are over 10 million people in America alone who rise before daybreak at 3 a.m. out of which 7 million are working (www.7-eleven.com).

These consist of an entire range of service people such as firefighters, law enforcement officials, nurses, hospital staff, drivers, media officials, postal employees, printers and photo lab staff, production night shift employees, work-from-home persons, including computer programmers and online writers, military workforce, computer machinists, chefs, bakers, motor vehicle drivers, customer-service executives, administration personnel, hotel workforce, defense sentinel, cleaning workforce, choirs, artists and other performers, who earn their income by functioning through the night and need services through the night. Thus we see that the opportunities and potential of the 7-Eleven stores are numerous given the long list of potential customers. (www.7-eleven.com)

The 7-Eleven corporation has bakeries and commissaries that are able to produce anything they are told to so that the customers choice of what they won’t eat, sandwich or steak dinner can be produced in the central kitchens and delivered instantly, twice a day or even three times a day to 7-Eleven stores. (www.7-Eleven, Inc.)

Global Convenience

Around 7,100 of the 7-Eleven business stores in America alone are managed by franchisees or licensees. The 7-Eleven, Inc., is a global company with countless opportunities as its licensees and affiliates operate more than 30,000 ‘7-Eleven’ stores in the international arena of countries including 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, Inc.)

The pioneering act of 7-Eleven of functioning round the clock was a decisive and profitable move in the retail ground.

However, 7-Eleven is threatened by countless competitors including smaller retail operators, grocery stores, drug and even fitness centers who have adopted the 24-hour work schedule of 7-Eleven, thereby posing a serious threat to the corporation, which means that 7-Eleven has to continuously devise and implement new strategies for ensuring the loyalty of its customers. (www.7-Eleven, Inc.).

The major Competitors of 7-Eleven group are the

Casey’s General Stores, Inc.;
Chevron Corporation;
Tosco Corporation; (www.7-Eleven, Inc.)

Financial Analysis

The 7-Eleven franchise structure divides the gross profits 50:50 or close to it, between the company and the individual franchisee. The preliminary 7-Eleven franchise term is 15 years. The franchise fee and other upfront fees collected by 7-Eleven from a newly approved franchisee, in addition to ongoing 50:50 sharing of profits, is not transferable to another incoming franchisee in the same store, for the unexpired portion, if any, of the current 15-year contract.

For example if one pays full franchise fee for 15 years and has to leave the store after one year due to any reason, they stand to lose the franchise fee for the remaining 14 years of their term. On re-franchising of the same store, 7-Eleven again collects full franchise fee from the new franchisee. The key to the financial success of the company is their openness and keenness to ideas and concepts and their ability to leverage their size.

The balance sheet projected a considerable increase in revenue for the year 2007 which was 452,356,530,000 USD as compared to the previous year 2006, when the revenues from operations were 335,842,410,000 USD. Accordingly the net income too rose from 7,580,260,000 USD in 2006 to a whopping 11,306,690,000 USD in 2007, showing a phenomenal growth. The percentage revenue showed a 0.2% increase from 2.3% in 2006 to 2.5% in 2007. However the returns on equity (ROE) rose considerably by 2.1% from 5.5% in 2006 as compared to 7.6% in 2007. Comparatively, the returns on assets (ROA) were not so prominent with only a 1.1% rise from 2.6% in 2006 to 3.7% in the year 2007.

The total assets by the year ended 2006 were valued at 295,248,190,000 USD, increasing remarkably to 322,812,880,000 USD in 2007. the comparative net income per share showed a nominal increase of 0.34%, due to an increase from 0.87% in 2006 to 1.21% in 2007. the cash dividend too marked an increase from 0.25 in 2006 to 0.44 in 2007. (www.7-Eleven, Inc.)

Conclusion

7-Eleven is among the earliest and leading Global convenience store chain providers, with one ATM in every store. But that’s just the tip of the iceberg.

The corporation of 7-Eleven is a constantly improving and evolving one where the managers of the company look at the business from different perspectives, that enable the company to progress at a fast pace, continuously.

The 7-Eleven corporation is extremely open to new and innovative ideas, the reason why they are one the leaders in the convenience chain store systems of the world. The company learns and understands the differences in culture and requirements of the diverse regions in which they operate, and tries to comply with them, giving the company an edge over its competitors.

The managers and directors of the 7-Eleven Corporation see technology as a convenience enabler which consequently makes them a better retailer because it helps them in targeting their product. They study the successes at other international stores around the world and use technology to help make people’s lives more convenient which remains their ultimate goal.

References

7-Eleven world’s largest chain store 7-Eleven.Inc.

News Room: Fun Facts & Trivia”, 7-Eleven.Inc.

About.com. “News Room: Background Information: Open around the clock”.

ESPN: MLB Headlines.

About 7-Eleven, 7-Eleven.

Tricia Pemberton, 7-Eleven making presence known with more stores, The Oklahoman.

Franchising is 7-Eleven’s future, Dallas Morning News.

2007 Top 75 North American Food Retailers, Supermarket News.

Top 100 Retailers: The Nation’s Retail Power Players (PDF), Stores, 2006.

2007 Franchise 500 Rankings.

2007 Fastest-Growing Franchises Rankings.

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