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Business Model for Differentiation: Case Study Taiwan 7-Eleven and Shanghai 7-Eleven
Graduate Student: Jeremy Firster
Advisor: Dr. Jung-Chuen, Lin
2Presentation Outline
Part I
1. Global Retail Market
2. Taiwan Retail Industry
3. Taiwan CVS Industry
4. Taiwan 7-Eleven
Part II
1. Chinese Retail Market
2. Shanghai Retail Market
3. Shanghai CVS Market
4. Shanghai 7-Eleven
5. Business Model Comparison
3
GLOBAL RETAIL INDUSTRY
Overview
4
Retail Formats – Customer Needs(Page 30-31)
5
Highest Retail Growth in Asia(Page 30)
Global: Retail Sales Growth by Volume (%)
Global: Retail Sales by Value (US$ trillion)
6
TAIWAN RETAIL INDUSTRY - MATURE MARKET
Competitive Structure
7Taiwan Retail Structure(Page 32-34)
Market Share (%)
8Taiwan Retail Structure (2)
• Highest Density of Convenient Stores in the world• 50% of retail value
(Page 32-34)
9Strong Retail Growth(Page 34)
10Taiwan CVS competition(Page 34)
11CVS Industry Characteristics
Mature Market in
Asia(30 years)
46% Increase in
Sales
(2010-2015)
High Level of Vertical
Integration
Similar Strategies
(Page34-36)
12
TAIWAN 7-ELEVEN
Overview
Business Model
Discussion of Critical Elements
(Page 36-39) 13
14Customer Segmentation(Page 40)
15
Customer Segmentation (2)(Page 40)
(Page 40) 16
17
Supply Chain and Logistics Management (Hyper-Efficiency)(Page 47-48)
FMCG Partners• Economies of
Scope
Distribution Centers• Economies of
Scale
Store Locations• Convenience
18
Information Systems Management
Tracking Customer Preferences
Order Information for Supply Chain Management
Franchise Management (Utilization)
Innovation Management (Implementation)
Information Systems
(Page 50)
19Innovation Management
Meeting Customer Needs• Understanding
Changes
Increasing Same Store Sales• Leverage Channel
Management
Utilize Data• Information Systems• Franchise Source• Emergent Sources
(Page 50-51)
20Brand Portfolio(Page 52-53)
(Page 40) 21
22
CHINA’S RETAIL INDUSTRY
Dynamic Changes
23
(Page 55)
Economic Development
Transportation SystemsInfrastructure Development
Government Regulations
(Page 55-56)24
Cultural Traits
Consumer Psychology
25
Mixed Retail Format Development(Page 56-57)
26China’s Retail Structure
Trade Sector Store Numbers China Retail Format Market Share
(Page 57-58)
27
Drivers of China Retail Growth(Pages 58-60)
28
Drivers of China Retail Growth(Pages 58-60)
29
Drivers of China Retail Growth(Pages 58-60)
30
SHANGHAI, CHINA
Golden City of Opportunity
31
Fast Facts: Shanghai
Largest Economic Hub
Largest Transportation
Hub
2020: 36% Global Retail
Sales
70% Population:
18-59
30% Regional Immigrants
(Pages 60-61)
32Shanghai Convenient Store Industry(Pages 61-67)
33
SHANGHAI 7-ELEVEN
(Page 67-70)
34
7-Eleven as a late entrant
• Uni-President China Developments since 1992
• Licensing issue with parent company, Seven & I, lasting until 2008
• Late market entrant• Entry with “fast-food
island”
(Page 67-70)
(Page 40)
35
Market Entry - Segmentation
• President Hsu• “My competitor my
customer”
80% Eat Meals Outside Home
54% Target Customers: 2-4 visits
Breakfast: 16%
Lunch: 11%
(Page 70)36
37Business Units
• Social Networks
• Economies of Scale
• Maximum Utilization
• Market Knowledge
Local Partners
Resource Sharing
Public Relations
Supply Chain and
Logistics
(Page 76)
38Central Kitchen
$
Centralize Production
Key Element of Strategy
(Page 77)
39Public Relations
Stakeholder Management
Managing Legal Restrictions
Hiring Employees
(Page 78)
(Page 70)40
41
Business Model Comparison
Taiwan 7-Eleven Shanghai 7-Eleven
(Page 79-82)
42
Business Model Comparison
Taiwan 7-Eleven Business Model
• Logistics and Supply Chain Management
• Mature Industry• Partner Manager• Resource Allocation• Enhanced Segmentation• Super Channel
43
Business Model Comparison
Business Model Shanghai 7-Eleven
(Page 79-82)
• Central Kitchen• Managed Partner• Resource Sharing and
Creating• Effective Segmentation• High-End Channel
44
Thank you!Questions or Comments?
45
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