Family Mart- Convenience Store Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Weakness:

Training of the staff of convenience store is another problem that is faced by Family Mart. As in Japan and Taiwan employees are not required to have trainings to deal with the customers.

Another weakness can be that Family Mart is not efficient in technological terms. To maintain the retail operation of such big scale; the processes must be automatic and the company must have automatic systems that keep the track of inventory, cost of goods sold and time schedules.

Opportunities:

Chinese domestic retailers keep low-quality stock and offer less choice. This provides a great opportunity to the foreign retailers like Family Mart as they can supply high-quality products to the customers. Thus, the daily sales at a Chinese domestic retailer are half than the foreign chain retailer.

Another opportunities lie in expanding the business in nakashoku or lunch boxes division. By supplying quality food and timely deliveries, Family Mart can earn a major portion of revenues from this division. Most white collar employees need to have an affordable and high-quality meal delivered to them during their lunch times. The revenues from this division can be maximized by offering a wide range of food products.

The arrival of tourists in Beijing also presents an opportunity for Family Mart. The convenience store can target tourists. Most of the tourists shop in Beijing and they are ready to spend more money for quality goods.

Beijing’s retail market demand remained active over the first quarter of 2013 (Cushman & Wakefield Research, 2013). Thus, economic factors are also reflecting an opportunity.

Threat:

It is required by the businesses to have strong government connections and relationships. But mostly foreign businesses are not favored in this regard.

Chinese domestic retailers have better understanding of retail culture and practices. They are better in customer service as compared to the foreign retailers like Family Mart.

The competition in Beijing is really intense as there are numerous of retail, departmental and convenience stores there .Most of these products are of internationally demanded brands linked with being high-quality products.

STRATEGIC MARKETING PLAN

The strategic marketing plan can be analyzed by formulating the business, corporate and international level strategy for expansion in Beijing.

Business-Level Strategy:

The Business-Level Strategy of Family Mart should be of creating Differentiation. As the products they offered are highly priced as compared to domestic stores so they cannot adopt the strategy of cost leadership and they are targeting affluent youth hence; cost leadership and focused cost can’t be the strategy as it will not match with their vision. They should adopt differentiation by offering highest-quality product and by broadening the variety of products at their store. As a result of this strategy, they can gain high market share in Shanghai.

Corporate Level Strategy:

Corporate-Level Strategy followed by Family Mart should be of horizontal integration. They can partner with many businesses such as fuel pumps where they can open their convenience stores. Subsequently, due to expanding the presence of Family Mart can also gain competitive advantage over the competitors like 7-Eleven.

International Strategy:

The International Strategy of Family Mart should be to capture foreign markets by opening directly managed stores. Through this approach it can; obtain the market leadership in the youth’s affluent class, reinforce its competitive position by having same layout and level of service in each of its stores and endorse the brand image. Thus, on the basis of above advantages we can conclude that the international growth strategy of opening directly managed stores will prove successful for Family Mart.

Competitor Analysis

7-Eleven use franchising as its expansion strategy worldwide. It had given licenses to approx. 50000 outlets. It started its operations in China in 1992 and expanded over the years in cities including: Guangdong, Beijing, Chengdu, Shanghai, Qingdao and Chongaing. 7-Eleven has 970 stores in mainland China.

The retail stores of 7-Eleven are bigger than other rival stores including Family Mart. There locations are chosen carefully and the shops look brighter and spacious. Layout is also its strength. Strength is a good product mix.

Some of the competitors of Family Mart in Shanghai are All Days, Kedi, Quik and Buddys. Quik is the leading convenience store of China. Quik is owned by Lianhua Group. It has 1300 outlets. The sales of Quik are 25 percent of total convenience stores sales in Shanghai.

In order to take over the market leadership from 7-Eleven, Family Mart should focus on choosing the best locations in Beijing where people usually come for shopping purposes. Further, customer retention can be increased by improving the current layout and providing customer the atmosphere and shopping experience that attract those customers again.

TACTICAL MARKETING MIX STRATEGY

Marketing mix is a marketing model used to determine choices that companies make in the process of offering a product or service to the market. The marketing mix strategy for Family Mart’s expansion in Beijing is given below...................................

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