Case Study Description of Seven-Eleven Japan: Venturing into e-Tailing
Not content with nine million customers per day, Toshifumi Suzuki, the chairman and CEO of Seven-Eleven Japan Co. Ltd., was looking for ways to attract more customers and more sales. Fascinated by the optimistic outlook on the growth of business-to-consumer (B2C) e-commerce in Japan, he contacted several prominent Japanese companies to explore the possibility of working together to launch the biggest B2C e-commerce web site in Japan. Suzuki knew that successfully launching and operating a B2C e-commerce business in Japan, known for its citizens' hesitancy to buy on-line, could be a big coup for him. His challenge now was to convince his would-be partners that he had a potentially successful and lucrative business model. Set in December 1999, this case is primarily about the aspiration of Suzuki to establish a business-to-consumer e-commerce venture targeted at Japanese consumers. Depicts the obstacles that he faces and the methods planned to overcome these obstacles.
Swot Analysis of "Seven-Eleven Japan: Venturing into e-Tailing" written by Ali F. Farhoomand, Deric Tan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Suzuki Japan facing as an external strategic factors. Some of the topics covered in Seven-Eleven Japan: Venturing into e-Tailing case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Seven-Eleven Japan: Venturing into e-Tailing casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Seven-Eleven Japan: Venturing into e-Tailing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Seven-Eleven Japan: Venturing into e-Tailing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suzuki Japan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suzuki Japan operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Seven-Eleven Japan: Venturing into e-Tailing can be done for the following purposes –
1. Strategic planning using facts provided in Seven-Eleven Japan: Venturing into e-Tailing case study
2. Improving business portfolio management of Suzuki Japan
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suzuki Japan
Strengths Seven-Eleven Japan: Venturing into e-Tailing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suzuki Japan in Seven-Eleven Japan: Venturing into e-Tailing Harvard Business Review case study are -
Learning organization
- Suzuki Japan is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Suzuki Japan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Seven-Eleven Japan: Venturing into e-Tailing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Suzuki Japan is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Suzuki Japan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Suzuki Japan has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Suzuki Japan is one of the most innovative firm in sector. Manager in Seven-Eleven Japan: Venturing into e-Tailing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Suzuki Japan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Seven-Eleven Japan: Venturing into e-Tailing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Suzuki Japan is one of the leading recruiters in the industry. Managers in the Seven-Eleven Japan: Venturing into e-Tailing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Suzuki Japan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Seven-Eleven Japan: Venturing into e-Tailing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– Seven-Eleven Japan: Venturing into e-Tailing firm has clearly differentiated products in the market place. This has enabled Suzuki Japan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Suzuki Japan to invest into research and development (R&D) and innovation.
Analytics focus
– Suzuki Japan is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Ali F. Farhoomand, Deric Tan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Suzuki Japan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Seven-Eleven Japan: Venturing into e-Tailing Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High brand equity
– Suzuki Japan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suzuki Japan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Suzuki Japan in the sector have low bargaining power. Seven-Eleven Japan: Venturing into e-Tailing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suzuki Japan to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Seven-Eleven Japan: Venturing into e-Tailing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seven-Eleven Japan: Venturing into e-Tailing are -
Slow to strategic competitive environment developments
– As Seven-Eleven Japan: Venturing into e-Tailing HBR case study mentions - Suzuki Japan takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Suzuki Japan products
– To increase the profitability and margins on the products, Suzuki Japan needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Suzuki Japan has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Seven-Eleven Japan: Venturing into e-Tailing, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Seven-Eleven Japan: Venturing into e-Tailing that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Seven-Eleven Japan: Venturing into e-Tailing can leverage the sales team experience to cultivate customer relationships as Suzuki Japan is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Suzuki Japan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Suzuki Japan even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Suzuki Japan is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Suzuki Japan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Suzuki Japan to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Suzuki Japan has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Suzuki Japan needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suzuki Japan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Seven-Eleven Japan: Venturing into e-Tailing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Suzuki Japan has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Seven-Eleven Japan: Venturing into e-Tailing | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Seven-Eleven Japan: Venturing into e-Tailing are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Suzuki Japan can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Suzuki Japan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Suzuki Japan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Seven-Eleven Japan: Venturing into e-Tailing suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Suzuki Japan has opened avenues for new revenue streams for the organization in the industry. This can help Suzuki Japan to build a more holistic ecosystem as suggested in the Seven-Eleven Japan: Venturing into e-Tailing case study. Suzuki Japan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Suzuki Japan to increase its market reach. Suzuki Japan will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Suzuki Japan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Suzuki Japan in the consumer business. Now Suzuki Japan can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suzuki Japan can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Suzuki Japan can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Manufacturing automation
– Suzuki Japan can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Suzuki Japan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Suzuki Japan can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Suzuki Japan to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Suzuki Japan can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Seven-Eleven Japan: Venturing into e-Tailing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Seven-Eleven Japan: Venturing into e-Tailing are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Suzuki Japan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Seven-Eleven Japan: Venturing into e-Tailing, Suzuki Japan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– Suzuki Japan needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Suzuki Japan can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suzuki Japan can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Seven-Eleven Japan: Venturing into e-Tailing .
Increasing wage structure of Suzuki Japan
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Suzuki Japan.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Suzuki Japan in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Suzuki Japan will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Suzuki Japan needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Suzuki Japan has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Suzuki Japan needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Suzuki Japan demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Suzuki Japan business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Suzuki Japan in the Strategy & Execution sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Suzuki Japan.
Weighted SWOT Analysis of Seven-Eleven Japan: Venturing into e-Tailing Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Seven-Eleven Japan: Venturing into e-Tailing needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Seven-Eleven Japan: Venturing into e-Tailing is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Seven-Eleven Japan: Venturing into e-Tailing is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Seven-Eleven Japan: Venturing into e-Tailing is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Suzuki Japan needs to make to build a sustainable competitive advantage.