7-Eleven Indonesia: Innovating In Emerging Markets Case Solution
Intensity of rivalry:
The market is highly competitive, concentrated and fragmented. The industry is dominated by number of market players. The top rivals of the company includes Alfamart and Indomart as they were established before 7-Eleven. Additionally, these market rivals operates huge number of store all around Indonesia. The company also face competition from local and small stalls situated in nearby areas of customers, offering the utility products to customer at low cost(Porter, 2015).
VRIO/VRIN Analysis
Value
The major part of the company’s convenience store is the central kitchen which is valuable for the company. The resources are not costly as it was built on the already used Fuji plant of PT Modern. Thus, the company is not required to invest enormous-amount of money on the construction of central kitchen.
Rare
The company need huge amount of money to setup the central kitchen which is of high importance to deliver the fresh items to the customers. The central kitchen tend to require investment in real estate & because of the high prices of real-estate, setting up the kitchen is not easy for the company. The hard build is the essential resource as the company had built in Fauji plant which was unavailable to each and every convenience store. Thus, the rarity provides competitive advantage to the company.
Imitable
The idea of central kitchen have not adopted by the market competitors because of the unavailability of the funding. The requirement of huge chain of refrigerated trucks and heavy investment amount hindered the ability of market competitors to build central kitchen. Hence, the immutability of the central kitchen is challenging for the competitors.
Organization
The resources was supported by the proper warehouse and the convenience store. The company had plans to expand the eating area with core consideration of better accommodating all the customers. The Fuji-film stores was transformed into the 7-eleven stores which in turn provided efficient support to the resources(Jay Barney, 2010).
Value Chain Analysis
The Fuji-film stores was transformed into the 7-eleven stores. The idea of the central kitchen helped company to serve fresh products to the customers as it prepared 60 to 70% of its food. Even though, the company faced difficulty in delivering the food to customers in the day time due to traffic congestion, the products could not be delivered 3 or 4 times to the cafes. In order to safely deliver the products, the company was aided by Iron Bird for delivery of food. The product was carried to the central warehouse from where the products tend to delivered to the stores of 7-Eleven through refrigerated trucks. Later in day, the items was easily packed as well as delivered to the customers.
Additionally, the company partnered with Bluebird Group to offer taxi-calling services to the customers. Through taxi-calling service, the customer need to fill the form on the tablet provided by Bluebird from cashier department and could easily call taxi. Blue Bird computer software tend to handle the information of the taxi driver with other data of taxi calling service to provide the hassle-free and safe travelling experience to customers(Officials, 2013).
Business Strategy
The business strategy of the company revolves around serving wide customers base in urban markets of the world. The company prides itself on offering the high quality and exceptional customer experience & promotes hygienic and delicious food. The company decided to target the young generation based on their willingness to sooth their selves with food and provided them Wi-Fi and other facilities as these features become the instant hit among the young generation of Indonesia. 7-Eleven also accelerated its efforts on digital transformation to lead the market and beat head-to-head-competition through innovative and new digital kiosks.
7-Eleven partnered with many service providers to ensure that it keeps providing value-added customer experience. The company used efficient delivery system with special refrigerated trucks to deliver fresh items to the customers and collaborated with Iron Bird for better delivery solution.
Conclusion
7-Eleven is the leading and valuable global convenience store entered Indonesia in 2009 with domestic player PT Modern International as the master franchiser. The company prides itself on offering the high quality and exceptional customer experience & promotes hygienic and delicious food.The company partnered with Bluebird Group to offer taxi-calling services to the customers. With the idea of central kitchen, the franchise used fauji films stores & converted them into the 7-Eleven stores..........................
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