Example SWOT for 7-Eleven

Strengths

CONVENIENT LOCATIONS

7-Eleven has over 50,000 outlets throughout the world, which gives them a
significant location and convenience advantage. Obviously, being a convenience
store, their primary benefit to consumers is that commonly purchased products are
located at nearby stores. Therefore, greater market coverage through a greater
number of outlets will provide increase convenience to more consumers.

OVERALL BRAND EQUITY

7-Eleven is generally perceived as the market leader by consumers in the

convenience store sector. This brand equity translates into customer loyalty and
reduced price sensitivity and, therefore, continued stability of revenue streams across
its outlets.

INDIVIDUALLY BRANDED PRODUCTS

In addition to having a strong overall brand, 7-Eleven also has several branded
product offerings. The most famous of this are probably the Slurpee and the Big
Gulp. In some countries they also have other branded offerings such as Movie Quik
in the United States. These individual product brands provide a further strength to 7-
Eleven, as consumers may choose to seek out these particular products/brands as
their preferred choice.

FRANCHISED MODEL

Many of the 7-Eleven stores throughout the world are franchised. This provides to
strengths for the organization – the first being that they can continue to grow the
number of outlets throughout the world without having significant capital
requirements, as the franchisee is typically responsible for the setup costs of the
outlet – and the second advantage being that the stores are run by motivated
individuals who have a profit incentive for the store to perform well.

DIVERSITY OF INCOME
Because the overall chain of 7-Eleven operates in multiple countries, the parent
company has essentially diversified its income streams across multiple markets.
While this can also be a weakness, it also provides a strength of stability of income as
a downturn in one particular country is unlikely to impact their overall financial
results to a significant extent.

Weaknesses

HIGH RENTAL COSTS

Due to the need to locate the 7-Eleven outlets in very convenient locations, they are
likely to incur higher rental costs as a result. This higher operating cost structure will
mean that they will need to adopt a price premium approach. There are some
consumers who are happy to pay a little bit more for convenience and speed of
purchase, however other budget-conscious consumers a more price sensitive.

HIGH STAFF COSTS

Similar to the high rental costs above, because the store operates on a 24/7 basis in
some locations, this type of retailing operation is likely to have a higher ongoing
operating cost structure. As a consequence of these higher costs, 7-Eleven will be
required to have higher price offerings in order to protect their margins.

FRANCHISEES

Although the overall franchised model is a strength as indicated above, running a

large team of franchisees throughout the world is also a weakness. This is because it
removes some element of direct control of the day-to-day operation of each outlet
and passes it to the franchisee. In addition, a management team is required to
recruit, train and monitor the various franchisees, which also adds to the overall cost
structure on an operational basis.

Opportunities

CONTINUED MARKET DEVELOPMENT

As with many chains of small retailers, one of the obvious ways to grow their
business is through market development. This means increasing the number of
stores they have in existing markets and cities and increasing the number of
countries that they operate in. While there is potential to cannibalize sales of existing
outlets, much of this concern is passed to the franchisee and does not necessarily
affect the parent company.

INCREASED PRODUCT OFFERING

In many of the 7-Eleven stores, there would be physical capacity to increase the
product range and offering. This provides the opportunity of being able to offer a
greater selection of both physical products, as well as services, such as ATMs,
cellphone cards, and perhaps even car insurance. Certainly in some countries, 7-
Eleven has expanded into offerings of wine, beer, fuel, ATMs, coffee, donuts, pizza,
sandwiches and so on.

EXCLUSIVE PRODUCT OFFERINGS

7-Eleven has managed to form some strong relationships with key manufacturers
that have strong brands. An example here is Gatorade, where certain flavors are only
offered through 7-Eleven stores. This has advantages to both of the strategic
partners, and is something that will broaden the range of benefits that 7-Eleven
delivers to its consumers.

CO-BRANDING LOCATIONS

7-Eleven could expand their geographic coverage through co-branded outlets with
other significant retail offerings. For example, they could partner with a coffee chain
or a sandwich chain and set up a co-branded store – where both stores operate
independently but out of the same location. This has the advantage of attracting
more consumers, who are possibly less reliant on the convenience aspect, and are
likely to buy from both businesses over time.

Threats

SUPERMARKETS MOVING TO 24/7 HOURS

In some parts of the world, major supermarket chains have adopted a 24/7 operating
system. It is common for most major supermarket chains to have extended hours.
This erodes 7-Eleven’s natural competitive advantage of having extended shopping
hours. This is a significant threat to 7-Eleven over time, as they would not have the
low cost structure required to compete effectively on a price basis with a major retail
chain, such as Walmart for example.
SUPERMARKETS MOVING TO ONLINE DELIVERIES

Some consumers are adopting the system of ordering their groceries online and then
having them delivered. Although this requires some pre-planning, it does also offer
significant levels of convenience to organized consumers, which does represent a
threat to 7-Eleven’s convenience-based competitive advantage.

SECURITY

Because 7-Eleven is a convenience store that handles cash and may be open on a
24/7 basis, it is always likely to be a target for theft and armed hold-up. Obviously
the chain has put in various security measures in different parts of the world,
including video cameras, safes, and window barriers and so on.

SHOPLIFTING

Like most retail stores, 7-Eleven will have the continued threat of minor shoplifting
and stealing. In some locations, these stores operate on a lean budget and only have
minimal staff, which presents the opportunity for some consumers to occasionally
shoplift. Like with the security threat above, video cameras may assist in this regard.