STRENGTHENING OF 7- ELEVEN IN TAIWAN Harvard Case Solution & Analysis

STRENGTHENING OF 7- ELEVEN IN TAIWAN Case Solution

The localization of 7-eleven helped in strengthening the concept of convenience stores in Taiwan. The stores in the US were designed according to the buying behaviors and addressing the market gaps, which at that time,was a store that was open till late hours so that people could make purchases whenever needed. The stores in the U.S were successful due to its standardized floor plan and strict monitoring in the franchised stores. In Taiwan operations, the company franchised the operations and welcomed the local needs of the customers, which became apart of standardization strategy of 7-11 convenience stores in Taiwan.

Among the global strategies, 7-eleven stores used dual extension, which controlled the floor plans, product operation and the operating time leaving and choosing the location of stores. In Taiwan, unlike the US, people have no tolerance when it comes to waiting therefore, in order to cater this behavior, 7-11 customized its services and introduced instant services followed by expansion in the city center and high density population which led 7-eleven to encounter customer diversity. 7-eleven shifted its focus from housewives to young energetic people who were always on the go. It introduced products such as “Slurps” to address the fast and on the go youth. It also provided fast-food such as hot dogs, which were becoming popular in Taiwan as well. Furthermore, it stopped selling kitchen appliances, crockery which were items which were sold less and had been available in stock on streets as well, unlike the US, where all grocery products and kitchenware were those products which were sold frequently.7-eleven focused on the market gap of hygienic food at low prices and introduced the preferable foodstuff in a hygienic manner at a fair price in the store which delighted the customers. Moreover, to address the convenience factor and the customer satisfaction, the company also introduced the e-services of pre-ordering, online booking for different services and delivery pickup of customers’orders.The other major step towards localization of 7-eleven was taken by employing the technology of i-BON from which the customers couldpay through virtual money,whereas the company also introduced the licence renewal service which increased the footfalls tremendously to about 4500 people per day.Further adaptation involved the taxi service booking, telecom services, senior citizen sitting area with the introduction of low fat and high fire snacks to cater the elderly.

These global localization strategies were costly to adapt however,in the case of 7-eleven, the effectiveness of localization on net income and profits was far beyond the cost of localization, which in the long run, created service differentiation from other local stores to the customers.

TAIWAN V/S US 7-ELEVEN STORES

Being the successful convenience store in the USA and Canada, 7-eleven decided to globalize its services in other countries as well, for which it used the franchising technique to enter Taiwan.The franchising technique enabled 7-eleven to lower the barriers of trade. The differences in operating in the US and Taiwan were as follow:

The operations in Taiwan had small area of 700 square feet, which was the quarter of the area in the US with vertical zoning format rather horizontal zoning format in the US. The stores were usually located in rural areas, gas stations and corners of the metropolitan cities in the US whereas, in Taiwan the stores were located in multiple-stories building. The advantage that 7-s eleven got from this structure was the continuous footfall of customers 24/7.In addition to this, Taiwan had a government regulated floor plan, which restricted the company to adopt the uniformity of the US stores in Taiwan.

Although the products offered by 7-eleven were standardized however,the localization in Taiwan enabled the company to set the product offerings according to the demand of the customer, which was different from the US. Similar to the stores in the US, it provided all grocery products, kitchen accessories and food items whereas,in Taiwan,the kitchen tools and accessories were items which were sold less, and the food offered was customized according to the market which was Chinese food.Moreover, the customers of Taiwan preferred friendliness, and immediacy whereas,in the US people were tolerant towards the efficient services provided by the store......................

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