Core Competencies of "7-eleven"

"7-Eleven"uses integrated distribution . Innovative and open-minded management

philosophy is one of the important factors for corepetencies. Top management is
willing to accept new ideas and innovation such as replenishment opus card (smart
cash card) and e-shopping for college textbooks, ATM cashier of HSBC and Standard
Chartered Bank. They are willing to change their sales and operation strategies to the
business environment customer demands such as sales strategies of newspapers’
coupons. Optimized logistics and supply chain management include just-in-time (JIT)
logistics system, integrate contribution system and outsourcing logistics services. JIT
logistics system provides a rule olti-categories and few inventories”, frequent and on-
time delivery.

Proposed Propositions of Eight Factors with a Core Competency of Convenience

Store Propositions

1: Innovative and open-minded management philosophy enhances a core competency

of strategic
management in convenience stores.
2: Optimized logistics and supply chain management strengths a core competency of
logistics
distribution in convenience stores.
3: Integrated information system reinforces a core competency of information
management in convenience stores.
4: Franchise system reinforces a core competency of partnership and finance in
convenience stores.
5: location orientated expansion strategy enhances a core competency of operational
flexibility in custom convenience.
6: Value categories management reinforces a core competency of customer value in
convenience stores.
7: Strategic marketing has a positive association to a core competency of market
dominance in convenience stores.
8: Excellent customer service enhances a core competency of customer loyalty to
convenience stores.

Comparison of Core Competencies of 7-Eleven in USA, Japan and Hong Kong.

From the comparison of core competencies of 7-Eleven , Inc. in USA have
implemented capability surcing analysis which helps maintain the core business and
reduce the cost and loss in 1990s. Sourcing becomes a main strategy for maintaining
their core competencies. In Japan, excellent logistics and SCM, customer-oriented
marketing strategies, effective use of information technologies, Keirestu model with a
tight and close partnership make 7-Eleven, Japan have a great success in convenience
store industry. These strategies and management philosophies also strengths their core
competencies and enhance their leadership in Japanese market. While 7 Eleven in
Hong Kong, new product and service development, innovative marketing campaigns
and market dominated strategies are used to maintain and enforce their core
competencies in the industry.

Core Competencies , According to Prahalad and Hamel , core competencies of a

corporation are collective learning and intangible assets in the organization,
especially, coordination of diverse products and service skills (business know-how),
the synergy of marketing and logistics management knowledge in routine operations,
relationship development and management, and integration of multiple streams of
technologies and techniques. Appendix 1 summarized different strategic management
approach and their salient features. In resource-based view, a firm is understood to be
a bundle of assets and capabilities. The competitive

advantage is acquired by accumulating assets and capabilities as strategic

resources. Competence-based perspective argues that core competencies are the
source of sustainable competitive advantage. Core competencies are collective
learning and unique capabilities are manifested in business activities and processes .
The dynamic capabilities approach claims that the competitive advantage comes
through leveraging the managerial and organizational processes of a firm, and is
shaped by the strategic positioning of its assets and available paths. The “dynamic” is
defined as “the capacity to renew competencies so as to achieve congruence with the
changing business environment”An ultimate important agenda for an organization is
to build up their unique core competences from competitors in its operating industry.
Every company has the potential to build its core competencies but failed to do so
because top management is unable to conceive its company as anything other than a
collection of discrete commercial activities. The acceleration of retailing competition
in global wide scale has changed the nature of retailing since the 1990s, and the
competition between Wal-mart and K-mart is a typical example.
Today, convenience stores are using competitive advantages derived from many
spectrums, such as excellence in customer services, effective information technology
and systems (POS, ERP, VMI and WMS), supplier management, combined push and
pull strategies, quick responsiveness to market and customer changes, regional supply
chain network and using third party logistics service providers. Those competitive
advantages differentiate some leading chain stores from others. Thus, continuously
striving for excellence makes these leading chain store sustainable development and
build up their unique core competencies . However, little research was conducted to
reveal what are the core competences of convenience stores, and how to develop them
into sustainable organizational strength. Case studies are carried out in a leading chain
store company branch, that is, 7 Eleven in Hong Kong and in Malaysia.

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