The Success Story Of 7-Eleven In Taiwan: Strategies And Challenges

Background of 7-Eleven in Taiwan

7-Eleven was founded in 1927, in Dallas. The organization was formed at a period when the southland ice company was famous for its sale of staples such as eggs and milk in the region (Armstrong, 2015). 7-Eleven was significantly focused on the aspect of convenience for its consumers, as well as the provision of commodities which could not be accessed by consumers at certain times. 7-Eleven embraced the 24-hour working system, which aimed at capturing a more significant market share hence increasing its sales. The organization also managed to remain unique from other stores and supermarkets considering its extended working hours (Baker & Vincent, 2016). The management in the organization further booked into the development of an international expansion strategy, which would help ensure that 7-Eleven is recognized across the world. 7-Eleven owns more than 36000 stores outside the united states, and is well recognized for its high-profit margins.  

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the entity further embraced the Taiwanese market and opened its store in the region. 7-Eleven adopted the product assortment strategy and managed to position itself in a more geographically accessible location in different countries it chose to venture (Baker & Vincent, 2016). However, poor performance was registered upon its introduction in the Taiwan market. The management, therefore, considered the important to adopt a further strategy which would help focus on enhanced performance. Just like any other profit-making the organization, 7-Eleven is focused on making high levels of profits, and reducing staff turnover rates in the process (Baker & Vincent, 2016). These strategies and motives are a driving force towards the growth of 7-Eleven in the convenience store industry.

The primary target market for 7-Eleven is the Taiwan population. The region has a  high population which is expected to lead to the creation of high demand for the commodities offered at 7-Eleven. This, in turn, leads to the convenience and excellent growth potential for the organization especially in the major cities in the country (Berry, 2016). 7-Eleven was ranked as the giant in convenience store industry in Taiwan and has since managed to maintain its position in the market and competitive edge. The organization has accumulated revenue of more than 0-37 billion per year. Most of the competition faced by 7-Eleven is from the supermarkets and significantly established shops in Taiwan, which was also located in developed cities. The most intense competition has been attributed to the cultural perspective of the people, where Taiwan based entities tend to focus on Taiwan relate cultural commodities that have already been embraced by consumers, while 7-Eleven focuses on diversity production and distribution of staples for the consumers (Chesney, 2016). The primary target group is staple food buyers, which constitutes the majority stock in most convenience stores. This includes families and individuals,  who rely on stores to obtain their consumables on a daily basis.

Target Market and Competition

The service market in Taiwan reached saturation in the mid-1990s. There were more than 2000 stores in the country owned by 7-Eleven, and at least two convenience stores were located on every street, in every city. A lot of competition was also present in the market, considering the fast-growing business models which were also adopted by other organizations (Baker & Vincent, 2016). Owing to such market conditions, 7-Eleven management decided to take up the opportunity to focus on ways through which revenues could be increased,  without necessarily having to open new stores. Due to these aspects, the arrangement between the organization and the cash entities made it easier to collect and transfer funds, and at the same time, earn from services delivered to the consumers (Gordon et al. 2016). Competition is the most significant market condition which affected operations of 7-Eleven, but the organization always managed to position itself in a way that consumer confidence was always restored, and increased loyalty earned.

7-Eleven adopted the most strategic initiative, to increase profitability and efficiency within the sector it operates. The organization embraced the association with the china trust bank, to set up ATM stores in all its locations. With this, consumers will be allowed to withdraw their cash and make cash deposits in 7-Eleven stores without any hardships. At the same time, purchases will be made in the most convenient manner (Gordon et al. 2016). Considering the introduction of this service, 7-Eleven was able to well position itself in the market, primarily through capturing the banking platform, electronic transfer of money, and consumer convenience concepts. All bills, including electricity and gas, would be paid in the 7-Eleven stores and outlets (Grigoryants et al. 2017). The entire transformation of 7-Eleven in the industry from a traditional approach to a well-equipped service centre made is highly recognized, despite the hurdles underwent in the process. Such strategic competencies have enabled the entity to adequately position itself in the competitive market, owing to the intense competition especially in the service sector.

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Critical aspects of the case study, concerning services marketing principles and theories

Fundamental principles and theories govern the field of service marketing, and should not be shunned. Various principles have been implemented in 7-Eleven, and related theories have been explained in this section.

Post-purchase behaviour is related to the behaviour of different consumers after the purchase and use of a commodity or service. In some cases, organizations’ public image is enhanced as a result of post-purchase behaviour from consumers, which may be positive or have a negative influence on the organization. The promotion of services offered at 7-Eleven will attract more consumers to the organization (Grönroos, 2017). If effective services are offered to consumers, it will be easier to maintain consumer loyalty and at the same time, focus on positive consumer feedback. The post-purchase behaviour concept is exhibited by most of the consumers, which is a very critical aspect when it comes to the success of an organization (Grönroos, 2017). Consumers need to be well appreciated, and feedback embraced, to enhance loyalty in the organization.

Strategies for Business Growth

Every profit-making organization has the mandate to select the most relevant prices in the market, which is then charged to consumers for all services which are offered. 7-Eleven has a responsibility to know the affordability levels and income levels of its consumers and target market. The costs and desired profit margins also have to be reasonably set, in order not to oppress consumers in the market (Grönroos, 2017). The theory also encourages organizations to note that if prices are placed below that of the competitors, consumers might end up believing the competitors in the service market can provide the same quality. There is a need to, therefore, focus on pricing strategies which will favourably influence consumer perceptions based on the services provided at 7-Eleven.

This is the most recent phenomenal in the modern service industry and has since been embraced by numerous entities in the competitive market platform (Jauhari, 2017).  The use of social networking in 7-Eleven is bound to help reach more consumers and earn a broader market share. Electronic means, therefore, should be adopted for the purpose of increasing the development of service quality and efficiency in operations in the organization. Websites ought to be set up by the entity, to ensure that consumers have access to organization services and products. According to the case study, 7-Eleven has managed to adopt one of the most famous electronic communication aspects, which are also utilized in Japan. The multimedia inspired stores in the Japanese market (Jauhari, 2017). These are considered to be user-friendly and have for quite a long time, led to increased profitability in most of the Japanese owned convenience stores. Self-service and interaction are significant features, which will make 7-Eleven successful as well.

Numerous practices are undertaken at 7-Eleven, which encourages its success. For example, the promotion of new services has been considerably embraced by the organization, with the aim of upholding profitability in the long run (Lovelock et al. 2015). New infrastructure has since been introduced at 7-Eleven, which in turn, has led to both positive and negative aspects. For example, shop assistants in the organization were considered to perform all new services within the short period. This posed a challenge to the quality of service delivered to the consumers (Srinivasan, 2014). Another practice implemented at 7-Eleven includes listening to the consumers and appreciating the feedback. Addressing all the arising issues is the most critical aspect of an organization. The most detrimental practice which needs to be addressed is personnel exploitation which focuses on the field of human resource management. There is a need to look into the needs of all the human capital in the organization, and also recognize that personnel cannot deliver similar quality output within same time durations, considering the inevitable fatigue. Impractical targets at 7-Eleven therefore, need to be eliminated. These practices are relevant to the theories of service marketing presented in 7-Eleven (Nasution, 2014). The human resource management practices, for instance, are inclined to employee performance which should not be ignored.

Service Marketing Principles and Theories in Practice

Every organization is prone to face challenges, especially in the service sector. 7-Eleven operates a very competitive environment. Critical obstacles that are faced should also be resolved in a prompt manner (Oflak, 2015). Change is inevitable, and should not be considered a bother to the transformation of the organization. Based on the case study, there is a need for the organization to form strategic partnerships and alliances, which will, in turn, enhance effectiveness in operations and performance. Secondly, there is a need also to consider the issue of reluctance in the organization. The change implementation process should not be a challenge enough, to escalate and be costly to the entity in the long run.

Considering the model of payment used by 7-Eleven, franchises did not receive any form of payment in the collection services (Oflak, 2015). Goodwill of the entity needs to be preserved. The most effective strategy to undertake is to deal with individual suppliers of the commodities and embrace a proper model of communication. This ensures that consumers also do not just walk into the stores to get bills paid, but also make purchases which increases profitability. Thirdly, there is a need to consider the fact that human resource challenges in 7-Eleven are inevitable, but can be controlled (Puttonen, 2015).

According to the case study, the assistants at the shop were highly overworked, hence the need for the 7-Eleven management to revisit working conditions (Yelkur, 2010). Shop assistants need to be convinced of the need to embrace operational changes through a change model that should be implemented in a stepwise approach.  Change needs to be dealt with in a systematic approach, to reduce organization resistance (Yelkur, 2010). This way, when all employees are involved in the decision-making process, change will be introduced without any form of resistance in the entity. No one will feel left out, and decisions will be made with total inclusivity.


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