7 Eleven Case Study - Solution 3 - Ketan Kumar Shaw

NAME  –  Ketan Kumar Shaw

ROLL NO.  –  30  30

SUBJECT  –  MIS

MODULE  –  2  2

TOPIC  –  7  7 Eleven Case Study DATE  –  20-11-2013  20-11-2013

QUESTION In terms of Porter’s model what strategic forces does the Retail Information System seek to address?

SOLUTION Michael Porter discussed about 5 external forces that externally affect a firm’s behaviour. These forces also affects the behaviour of the 7 eleven stores. The ways in which it affects are shown below 1. Threat of the Substitute  – It determines the power of the substitute goods to suppress the need of the good in the minds of the users. Less switching cost generally indicates higher threat of substitute. In terms of the 7 Eleven store, threat of substitute is high because the consumers shifts to different products very easily. 2. Buyer Power  – It determines the power of the Buyer. Usually lesser number of buyers and low switching cost indicates higher buyer power. In terms of the 7 Eleven store, the buyer power could be said as high. This is because the buyer readily switches to other products of the competitors. Also, the taste of the buyers differs from place to place.

3. Supplier Power  – It determines the power that the supplier has on the firm it is supplying it’s good to. Usually a lesser number of buyers i ndicate higher buyer power. In terms of the 7 Eleven stores, the power of the supplier can be understood to be moderate. The 5300 stores require the supplier to supply in time whereas on the other hand the size of the 7 eleven stores chain makes us understand that they will have considerable power over their supplier. 4. Competition – The more number of big competitors generally indicates intensified competition. In terms of the 7 Eleven store, the threats of the competitors could be understood to me moderate as there are few big competitors but 7 Eleven has maintained its sales.

5. Threat of new entrants  – The threats to new entrants is higher when the entry cost to the Industry is less. Also, more number of players indicates higher threats of new entrants. In terms of the 7 Eleven store, the threat of new entrant is very low because the store has gained its reputation over time and any new entrant will find it difficult to compete against the 5300 stores of 7 Eleven.

These 5 forces together helps in determining the intensity of rivalry amongst the firms. Thus, to conclude we can say that 7 eleven has considerable forces acting on it. On one hand, it has its power of utilizing its numerous stores efficiently and on the other hand it might face difficulty as the buyers want differs from place to place. Effective segmentation and targeting strategy could play a big role. This segmentation could easily be done through proper utilization of the Retail Information System.