11/30/2015

SWOT ANALYSIS
7-Eleven

Jessica Bulham, Miranda Pain, Orlia Parker, Michael Thorne, Robin Ward,
Gabrielle Zhutov
MGMT 1600 F15

Intro
7-Eleven started in 1927 as an ice box store that began selling milk, bread and
eggs. 7-Eleven was first known as Southland Ice Company and was formed by
Jefferson Green also known as Uncle Johnny. Jefferson found that most of his sales
were on Sundays and evenings when regular grocery stores were closed and people
need everyday staples. One of the founders, and later president and chairman of
Southland, began to sell products to other ice-dock locations. It was at this point that
convenience retailing was born. The company had eight ice plants and 21 retail ice
docks. When customers started to understand the new idea, the company increased to
owning a total of 60 Southland retail ice docks.
7-Eleven never stopped improving to satisfy customer demand. In 1928
Southland ice docks began selling gasoline. Customers liked that the ice docks put the
gas pumps 60 feet back so they could enter and exit the store conveniently. In 1936
customers would travel for miles to shop at the ice plant or retail shop because they
offered curb service, everyday staples, canned goods, and in season watermelon.
Southland attracted even more customers after the repeal of prohibition. Once
prohibition was abolished, the company was able to begin selling liquor which made
beer sales increase dramatically. Stores were beginning to grow again during the
depression.
Southlands early convenience outlets were known as Totem stores. This was
because most customers toted away their purchases; many stores even had genuine
Alaskan totem poles in front of the buildings. By 1946 the Totem changed their name to
7-Eleven to reflect the store hours which were 7 a.m. to 11 p.m. seven days a week. In

the 1950s the retail outlets grew as mom-and-pop neighborhood grocery stores, icehouses, dairy stores, supermarkets and all-in-one locations. For the first time, 7-eleven
opened its first store in other parts of Texas. After that they expanded across state lines
to Florida, Maryland, Virginia and Pennsylvania. As of now 7-Eleven operates hundreds
of stores across the country.
Capitalizing on customer need in 1963 7-Eleven grew to a total of 1,000 stores
because they opened convenient shopping in rural areas that were too small for the
need of a supermarket. In that same year, a store located in Austin, Texas near the
University of Texas stayed opened all day and night because business remained
booming after football games and they couldnt close the store. From that point on, the
store remained open 24 hours a day on the weekends. Other stores followed suit and
began to stay open 24 hours as well.
In 1965, 7-Eleven created another reason for customers to come into their
stores. It was first known as the Icee and was later re-launched in an ad for 7-Eleven
as The Slurpee. This semi-frozen, carbonated beverage gave 7-Eleven a chance to
promote a product in more than 1,500 stores. Around this same time, they also began
offering coffee-to-go which was launched in Long Island, New York and became a hit
with the customers because they could get their favorite drink and make it the way they
wanted.
In 1969 7-Eleven became best known for their Slurpee drinks and their stores
greatly expanded to 3,500 within the United States. They then began to move
internationally and opened their first store in Canada. Some of the growth was
accomplished when 7-Eleven entered the franchising business.("History - 7-Eleven

Corporate.") In California, Speedee Marts were franchised in total to 127 in 1964. The
company also expanded south to Mexico. The company continued to expand and went
overseas to Japan and in 1974 hit a total store count of 5,000 worldwide.
In the 1970s self-service became very important to business needs. At that time,
7-Eleven introduced self-serve gasoline, counter-top microwave ovens, and self-serve
soda fountains. These changes gave 7-Eleven the chance to introduce the famous Big
Gulp and the Big Bite Hotdog. During this time expansion of the 7-Eleven company
grew again and total international stores peaked at 2,500 locations.
When healthy living became important to customers, 7-Eleven started to support
fresh food and products that were delivered daily. 7-Eleven became a food-to-go
market - offering coffees, deli sandwiches, pastry items and frozen cappuccinos. In the
2000s 7-Eleven had grown its stores to a total of 25,000 worldwide and celebrated its
75th anniversary.
7-Eleven did not become successful because they had only one good idea, it
was because they had many. With the ideas that they had, they can claim many firsts
that happened due to their business. 7-Eleven was the first convenience and food
retailer to advertise on television, provide convenience-oriented customers with: freshbrewed coffee in to-go cups, offer self-serve soda fountain drinks, the first to offer
monster-sized drinks; Big Gulp beverages, the first to sell pre-paid phone cards, offer
self-serve ATM services and to offer cash payment for online bills, purchases or load
funds into an e-wallet with PayNearMe.("History - 7-Eleven Corporate."). Because of
these things their number one reason for continuous growth was their focus on
customer satisfaction.

Through 88 years in business, 7-Elevens mission is still to serve its customers

at its more than 56,600 stores around the world. Youll continue to find among the
staples, fresh sandwiches, new-age beverages, and the product that started it all ICE
but now in a convenient-to-carry package for home entertainment. ("History - 7Eleven Corporate.")
Strengths
As of 2008, 7-Eleven was ranked the number one largest convenience store
chain, according to the top 100 United States convenience store chains by the number
of stores. This automatically gives them a strength that others cannot obtain without
opening additional stores ("Top 100 U.S. C-Store Chains Ranked by the Number of
Stores."). Having that number one spot, 7-Eleven is given another strength due to sheer
number of stores. They have 5,622 stores in the U.S. which is 2,993 more than the
number two convenience store.
7-Elevens trademarked Slurpees has to be one of their biggest strengths.
Utilizing them for promotions draws customers into their many locations. The Slurpee
gave customers another reason to come into their stores, and it was something that
most had not seen. The semi-frozen carbonated beverage was a perfect opportunity to
expand on their consumer base.
On a survey conducted by our team, out of 57 responses 43% of customers said
that 7-Elevens biggest strength was check out speed. In another survey, we asked
current employees how satisfied they were with their current management; 88%
answered that they were happy with their current management. The employees that we
surveyed believed that their emphasis on customer satisfaction gave them an

advantage over other convenience stores. Being able to identify these strengths from all
different perspectives will allow us to come up with a strategic plan. (Ward, Zhutov)
Weaknesses
Like most businesses 7-Eleven has its share of weaknesses. Along with quick
and fast service comes slightly higher prices, overcrowded stores, cleanliness becomes
a problem, and some stores are old enough that they need to be updated. For
employees, one of 7-Elevens biggest weaknesses is employee health insurance. The
insurance provided to employees is expensive and comes with high premiums and high
co-pays, to which 7-Eleven makes little to no contribution. ("Find a Job - 7-Eleven
Careers." Ward,Zhutov).
Another weaknesses for 7-eleven is that it is a franchise. Owners can pay what they
want, without offering any raises, vacations, holiday, or personal paid days to
employees. When employees were surveyed by our group, they said that they want
owners to play a more active role in day to day operations. For 7-Eleven, this could be
part of the reason they have such a high rate of turnover. ("Find a Job - 7-Eleven
Careers.").
Lastly 7-Eleven will always be a convenience store. When a customer goes to a
7-Eleven they enter it as a quick stop, where they buy one or two items and leave. This
is a problem because customer loyalty doesnt exist. When most people think about
grocery shopping their first stop wont be to a 7-Eleven, it would be their last resort.
Opportunities
One of the many factors you probably consider when choosing which gas station
or quick stop you want to stop at for the day is what makes it the best option for you.

One of the best opportunities 7-Eleven offers to its customers is the Slurpee selection
they have. They use this to their advantage to gain customers and customer loyalty.
These Slurpee options also provide them with unlimited opportunities to reel in new
customers by switching up flavors, offering discounts, and their famous Free Slurpee
Day.
Another thing that 7-Eleven has utilized is that they have a contract with a
company called Edaleen Dairy, which supplies fresh dairy products daily to their stores
in Washington and Oregon. Edaleen Dairy does not supply their products to any other
quick stop. Expanding on this could not only help 7-Eleven but Edaleen Dairy as well (if
theyre interested). ("Where to Buy.")
7-Eleven has also started offering their own brand of snack foods called 7Select. They claim that these brands will allow you to be BFFs with 7-Select and have
money left over to take them to dinner. By offering a brand that has their stamp on it at
a more affordable price, they have given themselves an open playing field of
opportunities as to where they can go from here. ("7-Eleven.")
7-Eleven also has the opportunity to embrace the organic health food trend. With
going organic and going green becoming so popular these days, if they began to
supply organic and green foods (even at a slightly elevated price), they could drag in a
completely new customer base. Lets face it, we are all lazy when it's 11:00 P.M. and we
want a snack. If the 7-Eleven across the street supplied organic foods for those who
want that option, their sales would more than likely increase.

Threats
Regionally, 7-Eleven is in competition with local convenience stores such as
Maverick and Holiday Gas stations. During the survey it was found that the most
customers focused on the cleanliness of the store over speed.
Over the past several years, 7-Eleven has begun to phase out the gas station
portion of their business in order to become a pure convenience/quick service shop.
This has put the quick service store into a more of grocery type retail. They are
threatened by big box retailers that can have a larger selection at lower prices.
While shoppers may rave about 7-Elevens coffee, the checkout efficiency can
jeopardize the effectiveness of selling their product over retailers like Starbucks and
McDonalds that have the ability to utilize drive-thru service.
Strategic Analysis
In reviewing the surveys our team conducted and utilizing strategic analysis on
the results, there are a number links that can be found between each element of SWOT.
For example, customers rave about 7-Elevens coffee. However, with the speed and
efficiency offered by such competitors as Starbucks and McDonalds due to the use of
drive-thru windows, it would be expected for those establishments to be favored for
convenience, making them a threat. Luckily, even though the convenience store does
not have a drive-thru window, 43% of customers surveyed said that 7-Elevens biggest
strength was checkout speed, ultimately offering an advantage to 7-Eleven. Another link
that was identified was that 7-Eleven is best known for their famous Slurpees, making it
one of their greatest strengths bringing in a large customer base. By putting an

emphasis on sales of Slurpees and using certain marketing strategies to bring in

customers specifically for Slurpees (i.e. free Slurpee day), it opens up opportunities to
capitalize on what 7-Eleven is best known for. One threat 7-Eleven is facing is being out
priced by other retailers with competitive prices. However, one of their strengths is that
theyve been ranked the largest convenience store chain due to sheer number of stores.
While others may have more competitive prices, 7-Eleven has higher volume that helps
balance the scale in their favor. With more locations available to customers, it makes
them the most convenient of convenience stores.
Recommendations
Based on the research we conducted by taking surveys of customers, the biggest
recommendation we have for 7-Eleven is that they step up their cleanliness
requirements. According to our survey, cleanliness was top rated at 44% while
friendliness and product selection were the runners up" for things that needed to be improved
on. The second most important thing we believed that 7-Eleven could improve on was

that they should consider remodeling the stores. Believe it or not, appearances really do
matter when it comes to a place of business, and while the 7-Eleven stores may actually
be clean it doesnt mean they look it. Even a mild remodel of their stores could make a
huge impact in the realm of gaining more positive customer attention. Another thing that
was mentioned previously is updated their food and products to go organic, or to just
kind of adapt to the times to keep the customer base interested. We live in a world now
where going organic is incredibly important to many people. Not only would offering
more organic products get them bigger customer base but it would allow them to raise
the prices of the more desired items, thereby gaining a larger profit.

Works Cited

"7-Eleven." Only at 7-Eleven. 7-Eleven Corporate. Web. 18 Nov. 2015.

"History - 7-Eleven Corporate." History - 7-Eleven Corporate. 7-Eleven

Corporate. Web. 21 Nov. 2015.

"Top 100 U.S. C-Store Chains Ranked by the Number of Stores." Director of
Convenience Stores- Stagnito Media, 2008. Web. 19 Nov. 2015.

Ward Robin. Customer Survey. November. 2015.

Ward Robin. Management Employee Survey. November. 2015.

"Where to Buy." Where to Buy. Blu SKY CReative Services. Web. 16 Nov. 2015.

Zhutov Gabrielle. 7-Eleven Survey. November. 2015.