7-Eleven pioneered the convenience store concept in the past in 1927 at the Southland Glaciers Company in Dallas, Texas. In addition to selling blocks of snow to refrigerate food, an enterprising ice dock employee commenced offering milk, breads and eggs on Sundays and evenings when food markets were sealed. This new business idea produced satisfied customers and increased sales, and convenience retailing was born (7-Eleven, 2011).
Today, 7-Eleven is professional franchisees, licensees and affiliates operate more than 33, 000 7-Eleven and other convenience stores in countries including Japan, Taiwan, Thailand, South Korea, China, Hong Kong, Malaysia, Mexico, Singapore, Australia, Philippines, Indonesia, Norway, Sweden and Denmark (7-Eleven, 2011). Almost 1 ten years 7-Eleven practice the convenience store as business design, now they have to change of its business design for has great business with growth opportunities. The thought of mixed the original with indie stores business model to have the ability to continue improving their traditional business while adding new sections like fresh foods or services.
With this business model 7-Eleven indirectly created the competitive advantages in their corporation. A competitive edge is accessible when the organization can deliver the same advantage as before but at lower cost, or deliver benefits go over those of competing product. Thus, competitive advantage enables the firm to produce superior value because of its customer and superior earnings for itself.
For the 7-Eleven, few competitive advantages have been identified such as in term of help company sustain existing customer base. Customer's needs maintains changing as time passes. In order to keep current customers, business must constantly adapt to meet the changing requirements. For instance, if 7-Eleven were to keep retailing the same product as they does in 2000, then today it might be out of business. Companies need to constantly present services to keep the existing customers exited and happy.
Best way to retain the market is to assault the prevailing products with newer and increased products. The new products must be aimed at customers of existing products and at similar products (from competition). Thus, the idea of changing the business model would be the advantage to the company to keep market share, remain fresh & current on the market place and win some market show from competition.
Other than that, the 7-Eleven will also meet the latent demand which is customers who use the existing product will always have newer needs, and often wish that the existing product could do more than what it does today. This is a latent demand for a newer product which can be effectively be exploited by product improvements.
Which competitive strategies are noticeable in this case and what specific areas of IS/IT systems are being used to support them?
Every business has a competitive strategy. For 7-Eleven it is have a tendency to Defensive Competitive Strategy procedure which is proceed to be the first adopter (with new services, products and marketplaces). This gives the company advantage and discourage other competitors from entering the marketplace (because of obstacles to entry such as high cost, insufficient skills, insufficient reputation or brand, insufficient people, etc) as describe by Speech Marketing Inc (2002).
Having a competitive strategy is essential for a firm to compete on the market. But is more important is whether the competitive gain is ecological. The approach of implementing services and partnering with manufacturers to increase and better product life cycles it is helped 7-Eleven to be competitive and defense the business enterprise to more growth and fulfill customer satisfaction.
Some businesses neglect to align their IS/IT using their business targets and resulting in lower profitability. To align IS/IT 7-Eleven should identify business goals and strategies and break proper goals into concrete activities and techniques. After that 7-Eleven should identify metrics for measuring progress and then regulate how IS/IT can help achieve business goals, and as a result, the company can measure the genuine performance (Kenneth and Jane, 1995).
In this case, there are few aspects of IS/IT systems should use by 7-Eleven in order to support them in the businesses. Firstly, in term of Low-cost control which is 7-Eleven can use information systems to achieve the lowest operational costs and the lowest prices such as the organization must have inventory replenishment system that permit to system sends requests to suppliers when purchase registered at cash register. As a result, it decreases inventory at warehouses and the operating costs.
Secondly, the organizations may use information systems to permit new products and services, or greatly change the customer convenience in using the existing products and services. Other than that, the information systems can also use to customize, personalize products to match specifications of specific consumers. For instance, on the Dell Inc. Internet site, customers can select the options they want and order their computer custom built to these specs. Dell's assemble-to-order system is a significant source of competitive edge.
Lastly, concentrate on market market which is use information systems to permit specific market target, and serve narrow target market much better than competition such as analyzes customer buying habits, tastes and advertising pitch to smaller and smaller concentrate on markets.
Can you identify some other associated with the impact of IS/IT systems on the competitive position of the company out of this case?
Competitive analysis evaluates a company's strategic position and its ability to contend in its market against its peers. One of the most important analytical models for assessing the type of competition within an industry is Michael Porter's Five Forces of Competitive Position model, which he identifies in his seminal publication Competitive Strategy (1980).
The impact of IS/IT in 7-Eleven competitive position is on existing competition because of widens market, increasing competition, reducing distinctions and pressure to remain competitive on price. In provided technology for driving a car business functions in their corporation it was made a new entrant which can reduce barriers to access. New entrants in 7-Eleven a business can raise the level of competition, thereby minimizing its attractiveness by creating downward pressure on profitability.
Others impact to 7-Eleven is on replacement products and services that aid creation of services and services. The presence of substitute products contributes to lower industry success by constraining the power of firms to improve prices. Generally, the risk of substitutes will depend on buyers' willingness to improve, the comparative price and performance of substitutes and the price tag on transitioning to substitutes.
The cost of recycleables, labor and components can have a significant effect on 7-Eleven profitability. If suppliers have a higher bargaining power more than a business, then theoretically 7-Eleven industry is commonly less attractive due to its potential for lower revenue. The bargaining electricity of suppliers will be high when there are many buyers and few dominant suppliers and/or when the industry is not really a key customer group to the supplier
Lastly, customers or customer are those who create demand within an industry. The good deal power of buyers is greater whenever there are few dominant potential buyers and many sellers in the industry and buyers purchase a significant portion of the result, products are standardized, customers be capable of buy a producing organization or a rival, and/or the industry is not a key delivering group for potential buyers.