Source of Competitive Advantage

Published Date: 23 Mar 2015

One of the reasons of the success of 7-Eleven Japan or SEJ comes from the consumer-focused orientation based on Information Systems use. Its complete understanding and control of its market and operations based on IT support contribute to its sustainable competitive advantage. Even though SEJ regards IS as simply a tool, it is known for proactive investment in IT and outsourcing of its critical system. SEJ's strategy is outsourcing most of IS management in response to the speed of the market, this strategy allows SEJ to concentrate on developing a vision that works with the business strategy. Regularly, SEJ explores chances to obtain first mover advantage by introducing state-of-the-art technologies, for instance, point-of-sales system and Integrated Service Digital Network (ISDN) in which allowed 30 times faster speeds and enabled SEJ HQ to shorten analysis process of daily POS data item by item. This operational planning and control system expedites inbound and outbound logistics and the sales forecast relies on POS data to reveal changes in consumer preference. These innovations improve replenishment process and maintain availability of products which in turn sustain the degree of customer loyalty leading to the competitive advantage.

In the US, 7-Eleven was the first major convenience store chain in the US to develop a proprietary Retail Information System (RIS) feature POS, item level sales analysis, automated back office functions such as sales and cash reporting, payroll, gasoline pricing and inventory control, which are connected directly to the company accounting system and integrated gasoline - 'pay-at-the-pump' functionality. The system builds efficiencies towards ordering, distribution and merchandising processes. Similar to its strategy in Japan, 7-Eleven outsource majority of RIS to third party providers. RIS implementation provides timely, accurate sales information on an item-by-item basis in which facilitates inventory management that is known to be the key success factor in C-store business where inventory turnover is fast and replenishment process has to be able to catch up with the pace. Consequently, they are attributable to the source of sustainable competitive advantage of its operation in the US. Not to mention the introduction of integrated credit-card authorization and gasoline sales into POS register that yields more American customer base as they are mono-chronic culture who prefer one-stop shopping.

References

• Briggs, W. & Shore, B. 2007, Competitive Analysis of Enterprise Integration Strategies, Industrial Management & Data Systems, vol.107, no.7, pp.925-935.
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• Gottfredson, M. Puryear, R. & Phillips, S. 2005, Capability Sourcing at 7-Eleven, viewed 29 April 2010, . Nagayama, K. & Weill, P. 2004, '7-Eleven Japan Co.Ltd.: Reinventing the Retail Business Model', CISR WP no. 338, pp.1-20.
• http://202.205.89.79/download/materials/2009s/discipline/system_approach_to_accounting/Case%20Seven%20Eleven%20Japan%20cisrwp338.pdf