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 - – increasing transportation and logistics costs, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Suzuki Japan are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Suzuki Japan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suzuki Japan has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
Successful track record of launching new products
– Suzuki Japan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suzuki Japan has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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 -
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.
Interest costs
– Compare to the competition, Suzuki Japan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Seven-Eleven Japan: Venturing into e-Tailing HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Suzuki Japan has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Suzuki Japan, firm in the HBR case study Seven-Eleven Japan: Venturing into e-Tailing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Seven-Eleven Japan: Venturing into e-Tailing has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Suzuki Japan 's lucrative customers.
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Suzuki Japan supply chain. Even after few cautionary changes mentioned in the HBR case study - Seven-Eleven Japan: Venturing into e-Tailing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suzuki Japan vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Suzuki Japan has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Suzuki Japan to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Suzuki Japan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Suzuki Japan has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Suzuki Japan to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Suzuki Japan to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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 -
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 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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 disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Suzuki Japan can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suzuki Japan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Suzuki Japan high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.