The world we live moves at a rapid pace. With all the chaos, convenience has
become a universal value. The goal of 7-11 is to provide convenience to individuals,
and make their life a little easier. For the past forty-six years, they have dominated
in being the leader of convenience. Expanding more every year, a grand total of
46,000 stores today operate globally. You’ll see them in Australia, Japan,
Taiwan, Malaysia, Philippines, Singapore, South Korea, Thailand, China,
Hong Kong, Macau, Scandinavia, United States, Canada, and Mexico.
The first mass advertising technique was used in 1928, one of Southland’s
managers (later known as 711) visited Alaska. Upon his return to Texas, he placed a
souvenir totem pole in front of their convenient store. The pole attracted a variety of
customers, and by placing one at every store they figured it would make their
business more profitable. The idea worked, they even changed the name of the store
to Tote’m Stores, since customers came in and toted away their purchases. This
unified the diverse stores and provided them with a unique identity, a key ingredient
in establishing a chain of retail stores.
Joseph Thompson, secretary-treasurer of Southland Ice, wanted further
unification of stores. He taught all employees basic sales talk, and provided a
distinct uniform. The most important was service and quality, and Thompson
believed all the different stores should provide it equally, to all their different
customers.
7-11 uses many different marketing strategies. July 11th is the “birthday” of
this retail chain. Many people refer to it as free slurpee day, and worldwide give
away 5 million 7.11 ounce Slurpee’s to their customers. July is one of the hottest
months of the year, and people worldwide look forward to celebrating how far 7-11
has gone.
Marketing through different sports have spurred sales at 7-11. Here are a
couple examples. In 1981 Jim Ochowicz, an Olympic cyclist, founded a cycling team
and for 16 years successfully rode under the 7-11 banner. Since 2007, 7-11 made a
promotional partnership with the Red Sox, so they begin their home games at 7:11.
In 2007, prior to the release of The Simpson’s Movie, 7-11 turned 12 of it’s
North American stores into Kwik-E-Marts. Regular items such as drinks and
sandwiches had special Simpsons themed wrapping, and fans were willing to go out
of their way to purchase these items. The promotion was a hit, and upped sales by
30%.
In our modern world, 7-11 franchises are owned by Seven & I Holding
Corporation, a company based in Japan. After looking over their financial records
for the past five years I’ve noticed a change in their income. Since 2008, revenue
from operations has dropped 966,048 (yen), however, their total net income only
dropped 820 (yen).
Assets are a company’s cash and cash equivalents and liabilities are debts
that need to be paid. When comparing Seven & I Holding’s assets and liabilities over
the five year span, assets have increased, and liabilities have decreased, which shows
a growing and expanding company. A company’s current ratio show’s their ability to
pay off their liabilities with asset. Seven & I Holding’s current ratio for 2012 was 5.4,
with an average of 5.2 over the five year period. Generally, the higher the number the
more appealing it is to investors. However, these numbers are attractive and not
threatening to business. A companies Debt Ratio indicates the percentage of assets
financed with debt. Seven & I Holding’s debt ratio for 2012 was 21%. Just like the
current ratio, this is an attractive percentage. All corporations aim to minimize this
percentage, and if it rises year after year reconstruction of business would be
necessary to survive among competition.
Over the past five years, income from operating activities hit a peak of
465,380 (yen) in 2008, but dropped significantly in 2009 to 310,007 (yen).
However, in 2012 their cash and cash equivalents rose over 76,000 (yen), booming
their operating income back up to 462,462 (yen). Because 7-11 is a very profitable
company, from year to year, when a slow year brings lower numbers, they have
enough profit from previous years to keep continuing business, however slow
business for many consecutive years can be threatening to any corporation.
When an individual or investor wants to invest in a company, they buy the
company’s stocks. They can buy one stock, or many, and the price of each stock
reflects how the company is doing financially. It costs more money to buy parts of a
successful business than to buy parts of a failing one. Over the past five years the
price of Seven & I Holding stock has fluxed by 102 (yen) per share. Paying the
highest price at 208 (yen) per share in 2012. This indicates the company is doing
really well at the moment, and investors predict they will continue to do well in the
future, which is why they continue to invest at these higher rates.
Royal Dutch Shell and Exxon Mobile are two of the biggest competitors for 7eleven convenience and gasoline stations. Well, how is their business doing
compared to these competitors? Royal Dutch Shell has a 2012 current ratio of 1.2,
followed by Exxon Mobile’s ratio of .94. We know 7-Eleven’s ratio for 2012 was 5.4,
significantly ahead, and most able to pay off their liabilities with assets. When
comparing to 7-Eleven’s debt ratio of 21%, we see these other two companies
struggling. Exxon Mobile has a debt percentage of 51% followed by Royal Dutch
Shell at 47%.
7-Eleven stores are found around the globe and offer goods and products
based on customer demand. The sale of merchandise and gasoline determine net
sales, gas typically accounts for 30% of sales while merchandise accounts for the
remaining 70%.
Stores can carry anywhere from 2,300-2,800 items, and are separated into
nine different categories. Tobacco and related products account for about 28% of
sales year to year, followed by beverages at 25%. Beer and wine are placed in their
own category totally 12% while candy and snacks total a little more than 10%. Nonfood items account for 9% of sales, while fresh-food accounts for roughly 7%. Dairy
product sales total 5%, while older merchandise, special offers, and services are
thrown into “another category,” which accounts for 4% of sales.
Customers from different countries demand different services and products.
7-Eleven constantly brings in new product to meet the demand. They use local
vendors and distributors based on the area of their franchise. Since demand for
product differs from place to place, it’s more profitable to have easy access to goods
that the public demands.
King, A. (23 April 2012) What Marketing Strategies Do You Know? The different
Marketing Strategies. Retrieved on 5 April 2013.
http://www.slideshare.net/ambrking/overview-of-the-different-marketingstrategies
(2008) NBM Communications. Why is Marketing Important To
Business? Retrieved 7 April 2013.
http://www.nbmcommunications.com/why -is-marketingimportant-to-businesses.php
(2012) Seven & I Holding. Investor Relations: Financial Highlights. Retrieved 7
April 2013. http://www.7andi.com/en/ir/financial/highlight.html
Chabris, M. (2012) 7-Eleven. Celebrates 83rd Birthday with 5 Million free Slurpee
Drinks and Free Online Train Concert. Retrieved 6 April 2013. http://corp.7eleven.com/NewsRoom/2010NewsReleases/OhThankHeavenIts7ElevenDay
/tabid/428/Default.aspx
Hines, A. (24 May 2012) Huffington Business Post. 7-Eleven opens Thousands of
new Stores, Aims for World Domination. Retrieved 6 April 2013.
http://www.huffingtonpost.com/2012/05/24/7-elevenexpansion_n_1543277.html