1. What is (are) the business model(s) of the company?

B2C model fast turnover, quality product, fresh and customer focus supported by sophisticated information system Franchising strategies reciprocal obligations with the franchisee, high royalty fee 43% of turnover with good/ substantial supports such as Operation Field Counselors providing advice and motivates to franchisee. Benefits fast to market, maintain 24 x 7 operation hours and to further lower product order cost Collaborative commerce the synergy of demand chain and the supply chain to line up upstream suppliers with downstream customers with fast and accurate demand forecast, customer needs and item to item inventory management supported by POS and the e-commerce system Online e-commerce online ordering, door to door direct express delivery supported by IY bank Strategic outsourcing operation handled by franchisee, the company just to handle consulting and strategic business expansion

2. What are the critical success factors of Seven-eleven Japan?

First mover advantage - in using POS and ISDN system since 1982 and 1991 Proactive investment in IT allow SEJ to focus on core business strategies rather than on IT operation subcontract IT to NRI to allow SEJ focus on IT planning to enhance speed and customer satisfaction Lean operation system strategic outsourcing, use of ecommerce system for online order and direct express delivery Customer focus / responsiveness focus on customer needs, quality product, fresh and convenience in location and operation hours first of its kind in Japan System innovation information system innovation and distribution system innovation (refer to p.14) ~ collaboration of demand chain and supply chain Entrepreneurial leadership style and can-do spirit Quality control appointment and investment of $25million/

year on 1300 OFCs Combination of demand and supply chain Team merchandising Item by item control Store management method

3. How information give Seven-eleven Japan competitive advantages

30 times faster speed and thus enable SEJ HQ to collect and analyze daily POS data on every single item in each store Reduce stock out cost and opportunity cost (P.3) Effective item control and well-planned product supply management increase turnover rate from 25.5 days to 8.7 days and eliminate dead stock Support franchise strategy with advance information system down to item level order/ demand forecast Drive cost down and support outsourcing strategies Total information system support online ordering and accounting system backed up at physically separated locations Better inventory management Enhance information sharing with business partners Enable internet shopping and online payment IY bank Enable temperature-separated combined distribution system ~ on 22 years, SEJ has reduced the average number of vehicles visiting each store from a 0 day in 1974 to ten a day in 1998. Most important of all ~ enhance customer responsiveness.

4. What will be the sustainable competitive advantages of

Seven-eleven Japan?
Sustain the new e-commerce business model Responsiveness to changing customer needs and continuous improvement of customer services Internet based merchandising strategy such as reverse auction The combination of demand chain and supply change to stimulate additional demand on various change and to ensure stable product supply Disruptive retail business model internet channel, team merchandising and item by item control and store management

model Continue investment in IT Continue focus customer satisfaction, quality control and product freshness

5. Critically evaluate the e-commerce potential of Seven-

eleven Hong Kong, should the Japan business model work in Hong Kong or China? Please comment.
It is an open question; the key is to stimulate students critical thinking about business model in association to the market specific situations May not be the case since Hong Kong is rather small internet shopping may not work e.g. Admart fail in Y2K due to HK customer behavior prefer touch and see Demand and supply chain alignment may not work in China due to the supplier quality, customer maturity and technology internet commerce availability Issues of payment gateway and customer behavior