03-08-2013, 12:12 PM
7-Eleven in Taiwan
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Abstract
Nowadays, convenience stores have become more and more common in Taiwan. If you just look around everywhere, you will soon find there are a lot of convenience stores surrounding your town. Among several convenience store chains, 7-Eleven, or the President Chain Store Corporation, is the most popular one now. The paper focuses on why 7-Eleven is so successful in Taiwan and pursuits what is behind it. At the beginning, to understand the position of 7-Eleven’s parent company Uni-President Enterprise Corporation (UPEC) in Taiwan, and investigate how it influence the success of 7-Eleven. Also, based on the data which showed the consumers’ satisfaction towards 7-Eleven’s service, to consider how 7-Eleven’s service performances are evaluated by consumers and what kinds of management manuals they have. In last, the paper will discuss the influences of 7-Eleven’s special marketing geographical strategy and their advertisement effects on consumers. These information will help us know why 7-Eleven can continue to improve.
Introduction
According to the article “Taiwan Convenience Stores 2010”, “In 2009, Taiwan’s four major convenience store chains such as 7-Eleven, Family Mart, Hi-life, and OK operated a total of 9,184 stores around the country, a density of one store per 2,500 people, making Taiwan the densest market in the world in terms of convenience stores.” Among several convenience store chains, 7-Eleven is the most popular one in Taiwan now. To think about the history of Taiwanese convenience stores, according to the article “The Development and Trend for Convenience Stores” from Managing Convenience Stores Theories, the Uni-President Enterprise Corporation (UPEC) had contributed the great role to the development of convenience store in Taiwan (Department of Economy, 2000). “In May 27, 1979, UPEC stated with fourteen chain stores and in this year, UPEC cooperated with the Southland Corporation, having the longest history and the biggest chain convenience store Company in South America, imported 7-Eleven to Taiwan” (Department of Economy, 2000). The first 7-Eleven in Taiwan opened in 1980 with 27 stores and the sale of this year was just only NTD 1.2 billion. Although 7-Eleven grew 62 stores in 1984, the sale still did not improve a lot, and 33 stores had been closed in this year (Lu and Luo, 2010). Nevertheless, the 7-Eleven company did not stop to increase the number of stores; in 1987 they started to work 24 hours with all 168 stores. Since this turning point, 7-Eleven started to expand their business and in April 2010, 7-Eleven expanded with 4733 chain stores with a sale of NTD1017.6 billion in a year (Lu and Luo, 2010). This paper will explore these following questions:
What is the Uni-President Enterprise Corporation (UPEC)?
First of all, to understand the position of 7-Eleven’s parent company Uni-President Enterprise Corporation (UPEC) in Taiwan, and investigate how it influence the success of 7-Eleven.
According to the article “The Revenue for UPEC in April is 41.92 billion and increasing annually by 7.41%”, “The whole profit-making of UPEC in April recorded NT41.92 billion, its increased 7.41% from last year at the same time” (Yang, 2011). Uni-President Enterprise Corporation (UPEC) is the only company in Taiwan, which has many kinds of food manufacture branches, and dozens of products can be made through only one branch (Chang, 2006). Major domestic subsidiaries of UPEC are such as 7-Eleven, Starbucks Coffee Company, Mister Donuts, Muji (Taiwan) Co., President Drugstore Business Corp. (COSMED), President Transnet Corp., Semeur De Pain and so on. We can see there are so many subsidiaries under the UPEC and each of them quite popular companies in Taiwan now. “While adequately integrating the subsidiaries of retail, logistics and recreational service companies within the group, rapidly expanding its business territory” (Uni-President, 2007). The subsidiaries of UPEC’s business tie-up increased their business territory, and made UPEC more powerful company. In 2005, the profit-making of the food industry UPEC exceeded over NTD 1,000 billion” (Chang, 2006).
Food is important role in convenience store
In the article “The Almighty Convenience Store, 7-11 and Family Mart Competes”, E-IPC, the research of Taiwanese people whose frequency to visit convenience stores which stated from 1988, suggested those who answered once a week was 53.1% in 1995; in 2009, those who answered to go there every week was 84.7%, among them, the sum of those who answered three times a week and once a week was 50%, answered going everyday was 34%, surprisingly, those who answered visited over twice a day was 7.3% (Marketing.chinatimes.com, 2010). The age of main consumers who spend money in convenience store is 13 to 64, the E-IPC in 2006 to 2009, shown that those who answered visiting there every day was increased 30.8 to 34% (Marketing.chinatimes.com, 2010). From the data, we can see nowadays people visit the convenience stores more often than before.
Internal business management of 7-Eleven
According to the date of “The Benchmarking Companies of Digital Service in 2011”, 7-Eleven, or the President Chain Store Corporation, ranked the top in retailer category, it can say consumers are satisfied to the services of 7-Eleven (He and Yang, 2011). From this date, we can consider why 7-Eleven’s service performances are evaluated by consumers and what kinds of management manuals they have.
According to the book of “Successful CVS Strategies” by Chen Kuang in 2006, stated the detailed and specific personal management is 7-Eleven’s basic concept. There are three main management concepts of 7-Eleven such as work refinement, formal management, and the core value to the consumers. First of all, the feature of 7-Eleven’s staff management is refinement work. For example, as to cleaning, “there are many stores are required to do cleaning but less stores have cleaning process and every department has its own regulations, 7-Eleven is such convenience store”(Chen, 2006). Even though cleaning which parts in what time, the way or the order to clean, using which tools to clean, all of which are written in their management regulation, and workers should be follow it every day.
Marketing Geographical of 7-Eleven
“Taiwan is a high dense populated region, it has limited for the growth of big stores, and they cannot establish their companies easily. However small stores, especially convenience store, has more possible to be future development mainstream” (Department of Economy, 2000). As we know convenience stores in Taiwan has been increasing their marketing territory nowadays. According to the article “The Comparison of 7-11 President Convenient Chain Stores, Family Mart Convenient Chain Stores and Hi-life Convenient Chain Stores”, the research of the main convenient chain stores in Taiwan in 2007 showed that “7-11 President Convenient Chain Stores was on the top of the rank, which owned 51.87% of the market; Family Mart Convenient Chain Stores owned 24.56% of the market ,and Hi-life Convenient Chain Stores owned 14.33% of the market” (Workshop of Starting your own business with joining Chain Stores, 2008). 7-Eleven shares more than half of the convenience store market in Taiwan, and has raised its publicity. However, they are not only increasing the number of stores, but also having the strategies to set up it.
Advertisement
If you watch any commercials on TV for a while, you will soon be aware that it is easy to find 7-Eleven advertisements. Recently, 7-Eleven’s commercials have increased, do these advertisements really influence the increasing of their profits? The article indicated that “After several failed attempts, 7-Eleven came out with the low price City Café in 2004. However, with the success of commercial advertisements in 2007, 7-Eleven has been selling 30 million cups of coffee a year” (Taiwan insights, 2010). Whatever strategy does 7-Eleven used and rises up its profits?
Conclusion
After the research of 7-Eleven, we can understand the 7-Eleven’s background and there are many kinds of strategies behind them. The 7-Eleven’s parent company Uni-President Enterprise Corporation (UPEC) has a lot of subsidiaries whose business tip-up make each company’s development. For example, the food industry of UPEC supports 7-Eleven’s variety of food products, and increases their outlets than other convenience stores. Especially, for the working class people whose purpose to visit convenience store is for the food, it can say the food industry of UPEC’s support relate to the success of 7-Eleven. Also, the detailed internal business management of 7-Eleven makes worker can understand clearly how they work and behave, and following its regulations which increase the efficiency of each stores. Employing people in the promoting way also give them more faith for their work.