7 Eleven Entry in Germany

7-Eleven: A multinational

By: Eveline M. Koster

Rijksuniversiteit Groningen

Course: International Strategic Management

By: Eveline M. Koster

S1092553

Table of Contents

Introduction 3

Chapter 1 7-Eleven and its International Expansion 4

Introduction 4

History 4

Internationalization Approach 5

Conclusion 8

Chapter 2: 7-Eleven Japan: Why has it been so successful? 9

Introduction 9

History 9

Profitability and growth 9

Differentiation 11

Conclusion 11

Chapter 3: International Expansion: Germany 12

Introduction 12

Macro- Environment 12

Convenience Stores in Germany 14

Consumer Shopping Behavior 14

US Suppliers and Products in Germany 15

Conclusion 16

Summary 17

Tabel 1: Overview of 7-Eleven Territories 18

Literature 19

Introduction

7-Eleven pioneered the convenience store concept way back in 1927 at the Southland Ice Company in Dallas, Texas. In addition to selling blocks of ice to refrigerate food, an enterprising ice dock employee began offering milk, bread and eggs on Sundays and evenings when grocery stores were closed. This new business idea produced satisfied customers and increased sales, and convenience retailing was born.

Today, 7-Eleven is the undisputed leader in convenience retailing with more than 27,900 stores operating in the U.S. and 17 other countries and total sales of more than $36 billion in 2003. Approximately 3,200 of the company's 5,300 stores in the United States are operated by franchisees, and an additional 485 are operated by licensees. 7-Eleven, Inc., its licensees and affiliates operate more than 27,900 7-Eleven and other convenience stores in a.o. Japan, Australia, Mexico, Taiwan, Sweden, Turkey, Malaysia, China .

The purpose of this paper is twofold: examining the internationalization process of 7-Eleven as a whole and assessing if 7-Eleven would be able to enter the German market. I have chosen Germany as a new market because of the fact that 7-Eleven is already present in a few European countries, therefore having some experience in this type of market, but to a much smaller extent than its presence in Asia. In my opinion, a successful entry in the German market will enable 7-Eleven to the knowledge gained from this experience to enter other, similar, markets in Europe as well.

In chapter 1, an in dept look will be taken into 7-Eleven as a whole, assessing the internationalization process by taking a look at the company's history, its pattern of internationalization and strategies.

In chapter 2, the most successful market of 7-Eleven, Japan, will be examined in order to get a deeper understanding of why this market is so profitable and to what extent 7-Eleven's practices have been adapted to the Japanese market.

In chapter 3, the German market will be assessed on aspects as environment, legal and political factors and cultural values in order to determine if Germany would be an interesting market to enter. At the end of the chapter will also be assessed if some aspects of the successful example that has been set by 7-Eleven Japan can be used to make the market entry in Germany more worthwhile.

Chapter 1 7-Eleven and its International Expansion

Introduction

In this chapter, the internationalization process of 7-eleven will be looked at in more detail. After a brief overview of the history of 7-Eleven as a whole, the approach to internationalization will be discussed on the following topics: reasons for expansion, international mode of operation, localization push factors, market entry modes, and pattern of expansion. Just recently there has been an important change in 7-Eleven's ownership structure which will be discussed here as well.

History

7-Eleven pioneered the convenience store concept way back in 1927 at the Southland Ice Company in Dallas, Texas. In addition to selling blocks of ice to refrigerate food, an enterprising ice dock employee began offering milk, bread and eggs on Sundays and evenings when grocery stores were closed. The company's first convenience outlets were known as Tote'm stores since customers "toted" away their purchases, and some even sported genuine Alaskan totem poles in front. In 1946, Tote'm became 7-Eleven to reflect the stores' new, extended hours - 7 a.m. until 11 p.m., seven days a week. The company's corporate name was changed from The Southland Corporation to 7-Eleven, Inc. in 1999. Today, 7-Eleven is the undisputed leader in convenience retailing with more than 27,900 stores operating in the U.S. and 17 other countries and total sales of more than $36 billion in 2003 .

Business Operations

More than 5,800 7-Eleven and other convenience stores are operated and franchised by 7-Eleven, Inc. in the United States and Canada, and they serve approximately six million customers each day. Each store focuses on meeting the needs of busy shoppers by providing a broad selection of fresh, high-quality products and services at everyday fair prices, along with speedy transactions and a clean, safe, friendly shopping environment.

Proprietary Products

7-Eleven is known internationally for Big Gulp fountain soft drinks, Big Bite hot dogs, Slurpee beverages, and Cafй Select fresh brewed coffee. The stores have expanded their food service offerings with a proprietary line of deli items and