7-ELEVEN IN TAIWAN ADAPTATION OF CONVENIENCE STORES TO NEW MARKET ENVIRONMENT Harvard Case Solution & Analysis

Answer to Question #1

Taiwan is an island state located in the East of Asia. The nation is heavily dense with respect to its population. The population over flow of the nation can easily be recognized by the fact that there are 616 people per square kilometer in the state. These numbers indicate that Taiwan is the second highest population in the world with respect to its density, surpassed by Bangladesh which is more population dense. The capital city of the country is Taipei, which is the most crowded state with 9,737 people per square kilometer.

The economy of the nation has shown impressive trends and is recognized as one of Asia’s Economic Tigers. The country has evolved to become a growing economy by following a combination of being a democracy and a capitalist economy. Taiwan is a big exporter of electronic items and machinery. Taiwan’s 70% of the growth in its GDP (Gross Domestic Product) come from their exports.

DRIVING FORCES IN THE CONVENIENCE STORE INDUSTRY IN TAIWAN

Taiwan is currently on the track of increasing and enhancing its economic conditions. The economic conditions of the country are ideal for the business owners who are operating in the convenience store industry. A number of forces have been acting in the country for supporting the convenience store businesses and have helped the owners in efficiently operating their business operations in order to meet their financial requirements.

Over a long time span the performance of the country has been phenomenal with respect to its economy. The rate of inflation has been low in the country for over a number of years. Low rates of inflation allow the consumer segment of the country to spend more, which directly affects the businesses in the country. In addition, the convenience store industry in Taiwan has been benefiting from these conditions. Low inflation rates not only increase the buying power of the consumers but it also boosts the growth rates.

A steady liberalization has been maintained by the government in the country. Government efficient functions have helped the economy in being stable, which has resulted in increasing the local competition amongst the convenience store industry in Taiwan. These events helped them to hold down the prices. A large proportion of the food prices compromised the consumer price index (CPI) basket of the country. The continuous stability and decrease in the prices due to increased local competition has had its considerable impact on the overall rate of inflation.

Retail trade of the country heavily benefits the economy of the country. 14% of the country’s gross domestic product (GDP) came from retail trade in 2010. The retail trade accounted for $116.85 billion in 2010. The large value of retail trade is due to the existence of almost all the major global retailers in Taiwan. Operations of major global retailers are efficiently helping the industry to grow in the state. The government is aware of the importance of the retail consumption and they perform a monthly check over the metric of private consumption in the retail industry.

High population density levels are natural platform for any business to grow. Not only the retailing industry, but the convenience store industry is efficiently capitalizing on the large numbers of population that provide an ideal situation for such business operations. Large populations positively affect the bottom line of companies that are operating in the convenience store industry as it provides these businesses with an increased number of potential buyers...........................

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