Overview of 7-eleven
The main of the task is to provide an overview about the industry attractiveness in the organization. It also explains the trading activities and operations of 7-eleven company. It is an American company which offers beverage products to people in the global market. In the second phase, the paper explains the significance of resource-based view, capabilities and core competencies. Furthermore, it describes competitive advantages of the company.
7-Eleven is an American Japanese international chain of convenience stores, headquartered is located in Irving, Texas. The company operates and manages franchises and licenses approx 58,600 stores in more than 18 countries. There are approx 45,000 employees employed in the firm. Its parent company seven eleven Japan Co.Ltd, is situated in Chiyoda, Tokyo. The organization provides beverage products and services to the customers worldwide (7-eleven, 2016).
Technology and resources play a significant role to maximize the sale and revenue of the 7-eleven company. Porter five forces model helps to gain the competitive advantages in the global market (Rothaermel, 2015). The porter five forces analysis includes threats of new entrants, bargaining power of suppliers, bargaining power of buyers, industry rivalry and threats of substitutes. The porter five forces model has been discussed below.
Threats of new entrants: For 7-eleven company, threats of new entrants can be low and high also. Many new entrants are trying to enter into the global market. Thus, new entrants will reduce overall profits and revenue of the firm. Therefore, it is essential to stop the entry of new entrants in the industry. Furthermore, switching cost, high capital requirement and government restricted policies also influence the growth and success of the company. A threat of new entrants is the biggest challenge for 7eleven Company that can influence sale and revenue of the firm (David, 2011).
Threats of a substitute: Threats of substitute also a big challenge for the firm. If the products and services are not up to the standard, then customers can use competitor or substitute products to gain several benefits. For example, Coca-Cola is a substitute for Pepsi. Thus, the firm should focus the prices of substitutes, switching cost of buyer and quality of substitute products in the competitive market. It also helps to increase and enhance market share and profit of the firm.
Bargaining power of buyers: The bargaining power of suppliers also influences the financial position of the company. If buyer power is high, it means there are too many options available in the market. Further, if buyer/customer power is low then there are lesser alternatives are available in the entire market. There are several elements affect the buyer power of customers which include bargaining leverage, price sensitivity, and switching cost of buyer. All these factors affect the long-term mission and vision of the firm adversely.
Porter Five Forces Model
Bargaining power of suppliers: It refers to the supplier’s ability of maximizing and decreasing prices. If there are few options of suppliers, then it shows high bargaining power of suppliers. On the other hand, if there are many options available to suppliers then it indicates low bargaining power. The firm do not have to face high switching cost. Input differentiation and distribution centers also affect bargaining power of suppliers.
Degree of industry rivalry: It is evaluated that immense and high competition affects business activities and operations of 7-eleven company. The company faces high industry rivalry while providing products and services to the customers across the world. Many companies sell similar products in the global market which has a negative impact on the mission and vision of the organization (E. Dobbs, 2014).
Now it can be said that porter five forces model helps to attract and retain more consumers in the competitive market. These factors are essential for the firm to maintain industry attractiveness in an effective and unique manner.
Resources and technology are considered as a significant part of 7-eleven company. If it is managed and operated effectively and efficiently then it can give several competitive benefits to the customers. It also helps maximize profitability and revenue of the firm. Resource-based overview is a strategy to attain competitive benefits in the marketplace (Wong and Karia, 2010). The firm includes various resources such as assets, processes, capabilities, information, knowledge, and attributes. In short, resources can be called as inputs that facilitate the firm to perform task and duties effectively and efficiently (Boselie, 2010). 7-eleven company’s resource should have four characteristics to render the products and potential for gaining competitive advantages within the organization. The important characteristics for a resource-based view have been discussed below (Lin, Tsai, Wu and Kiang, 2012).
- This capability offers value to its customers in the global market. For example, the company should deliver products and services to the consumers on daily basis.
- Resources have to render a unique and dynamic strategy and policy to provide a competitive advantage to 7-eleven company as compared to other competitors. Thus, the rarity of the capability of the firm is essential and important.
- Furthermore, the competitive benefit must be inimitable and unique. For example, the products and services that have been rendered by 7-eleven company cannot be copied by other competitors.
- Resources must not be able to be replaced and exchanged by any other valuable resources. The two resources can be utilized individually to initiate the same strategy and approach then they are deliberately different from each other. Such resources are not sustained to gain the competitive advantages in the international market (Afuah, 2014).
The VRIN framework is essential to determine the capabilities and potentials that give a favorable impact on the sustainable benefit; furthermore, it has a positive impact on the entire success and growth of the firm (Hollensen, 2015). VRIN framework also helps to diversify the products and services in the competitive market. In addition, technology and infrastructure are also improved by taking into consideration VRIN framework within the organization (Porter, 2011). Moreover, VRIN framework is also implemented by the firm to attain long-term success and growth in the organization. Apart from this, core competencies provide an ability to compete with another firm in the global marketplace (Boni & Walker, 2013). For 7-eleven company to survive in an industry core competencies are essential. By using distinctive capabilities, the firm has been able to make a strong position in the market. It also helps to make strong relationship with stakeholders in the world. In this way, the organization can stay in the competitive market and it also helps to meet its long-term mission and vision of the firm (Lundvall, Joseph, Chaminade & Vang, 2011).
Resource-based Overview and VRIN Framework
The main aim of 7-eleven company is to provide the best quality of food products to customers in the global market. The firm wants to make control over the competitors to attain profitability in a hassle-free manner. Furthermore, the company wants to make improvement and enhancement in value chain strategy and approach to gain competitive advantages in the marketplace. The value chain strategy also helps to reduce duplication of production within the organization (Charan, 2011).
Along with this, strategic competencies and capabilities give a positive impact on the development and survival of the firm. If the company uses effective and dynamic strategy then the firm can easily attain their long-term vision and mission (Wagner III, & Hollenbeck, 2014). Strategic competencies include competencies and resources. In this way, 7-eleven company monitors and analyzes the competencies and resources to beat the competitors in the market. Moreover, the organization also focuses on the financial, human and physical resources. The strategic capabilities also help to improve and enhance operation management of the firm. In addition, training and development sessions are conducted by the company to increase and enhance the potential and capabilities of the employees. Apart from this, motivational tools are also used by 7-eleven company to increase and enhance the productivity and effectiveness of the organization (De Wit & Meyer, 2010).
7-eleven company has been able to improve and enhance supply chain management to enhance and increase the satisfaction level of the consumers. The firm also provides discount and offers to attract more consumers in the market. In addition, the organization also focuses on the delivery process to increase the number of customers across the world. Furthermore, the firm also uses effective and unique technologies and resources to gain competitive advantages in the market (Macey, Schneider, Barbera, & Young, 2011).
Conclusion and Recommendation
On the above-mentioned study, it is analyzed that resources play a vital role to attract more consumers in the competitive market. Furthermore, porter five analysis and competitive advantage have been shown in the paper. Now it is recommended that the firm should maintain effective goodwill in the marketplace, so that the profitability and revenue of the company can be maximized. Apart from this, 7-eleven company must focus on the supply chain and logistics management in order to deliver better products and services to the people. The report explains the resource based view approach to hit the competitors in the world. On the other hand, the paper explains characteristics of VRIN framework to reach the target market in the world. In addition, promotional and advertisement strategies should be used by the company to increase sale of the food products.
References
7-eleven., (2016). About us, reviewed on 16 Dec 2017,< https://corp.7-eleven.com/corp/about>
Afuah, A., (2014). Business model innovation: concepts, analysis, and cases. Routledge.
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Boselie, P., (2010). Strategic human resource management: A balanced approach. Tata McGraw-Hill Education.
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David, F.R., (2011). Strategic management: Concepts and cases. Peaeson/Prentice Hall.
De Wit, B., & Meyer, R. (2010). Strategy synthesis: Resolving strategy paradoxes to create competitive advantage. Cengage Learning EMEA.
- Dobbs, M., (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Lin, C., Tsai, H.L., Wu, Y.J. and Kiang, M., (2012). A fuzzy quantitative VRIO-based framework for evaluating organizational activities. Management Decision, 50(8), pp.1396-1411.
Lundvall, B. Å., Joseph, K. J., Chaminade, C., & Vang, J. (Eds.). (2011). Handbook of innovation systems and developing countries: building domestic capabilities in a global setting. Edward Elgar Publishing.
Macey, W. H., Schneider, B., Barbera, K. M., & Young, S. A. (2011). Employee engagement: Tools for analysis, practice, and competitive advantage (Vol. 31). John Wiley & Sons.
Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior performance. Simon and Schuster.
Rothaermel, F.T., (2015). Strategic management. McGraw-Hill Education.
Wagner III, J. A., & Hollenbeck, J. R. (2014). Organizational behavior: Securing competitive advantage. Routledge.
Wong, C.Y. and Karia, N., (2010). Explaining the competitive advantage of logistics service providers: a resource-based view approach. International Journal of Production Economics, 128(1), pp.51-67.
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