Unit VI Scholarly Activity Select an existing company, possibly a publicly held
ID: 399508 • Letter: U
Question
Unit VI Scholarly Activity
Select an existing company, possibly a publicly held company in order to find easily accessible information. Research the company and compile a SWOT analysis identifying a minimum of four elements under each of the strengths, weaknesses, opportunities, and threats. Explain each element with an eye on how this affects the company overall. Once the table has been compiled, address the following questions:
1. How does this tool assist the marketing and management teams to solve problems within the company?
2. Based upon your research and this SWOT analysis, what recommendations would you make for the management team?
Your APA-formatted submission must be a minimum of three pages
Explanation / Answer
SWOT ANALYSIS OF 7-ELEVEN AND ITS IMPACT ON MARKETING/MANAGEMENT TEAMS
7-Eleven is an international convenient store chain based in Texas founded in 1927. It the largest convenient store chain in the world with around 22,000 stores all over the world. Formerly known as Tote’m Stores, 7-Eleven is spread across eighteen countries. (Source: www.7-eleven.com)
SWOT ANALYSIS OF 7-Eleven
STRENGTHS
Unlike other companies, 7-eleven shares its marginal profit with its franchisees. This helps the franchisees with a financial support from the company even if they have any business losses.
Impact on company: Profit sharing also helps to build and maintain a healthy relationship with the company.
7-Eleven franchise is spread across convenient locations with over 50,000 stores all over the world. These stores provide ease of shopping for the customers.
Impact on company: As the stores are located extensively all over the world, it helps the company a good competitive advantage and helps in increased sales. This helps the company to earn a good market share and have a good customer base all over the world.
7-Eleven is regarded as a market leader.
Impact on company: This helps the store to have a better brand image and earn the loyalty of the customers. This helps the store to have stable revenue from all its outlets.
7-eleven also has several products under its umbrella. For example, Movie Quik, Slurpee are the brands of 7-Eleven and they are highly sought after by the customers.
Impact on company: As the company has umbrella branding strategy, the company can add new products to its line with no or minimal marketing activities. Umbrella branding helps the products to have an inexpensive market entry making use of the reputation of the parent company. (Source: https://www.marketing91.com/umbrella-branding/)
The business model of 7-Eleven is franchisee model.
Impact on the company: Franchisee model helps the company to expand without any initial investment and the expenses are being taken by the franchisees.
Since 7-Eleven is spread across eighteen countries, the income is diversified from different geographical markets.
Impact on the company: Diversification of income does not affect the general flow of income in case of any instability in a location.
WEAKNESS
There are high infrastructure costs associated rentals. Since the stores are to be located in convenient locations, it may incur high costs with regard to rentals.
Impact on the company: In order to make up the high rental costs, 7-eleven may have to increase the price of the products which make price sensitive customers reluctant to make purchases from the stores.
Since the stores are operating 24 * 7, 7-eleven may have to pay high salaries to their employees.
Impact on the company: High salaries to employees may be another factor that push the company to increase the price of the products.
Impact on the company: The poor management of employee friendly practices has led to a high turnover for the company which increased the recruitment and training costs for 7- eleven.
Impact on the company: The decentralization of power in different geographic locations would decrease the effective management and functioning of stores.
OPPORTUNITIES
7-eleven has the opportunities to expand further to new locations.
Impact on the company: Opportunity to expand further would definitely help 7-eleven to capture new markets.
7-eleven franchisees display a wide range of product offerings and avail services like ATMs and even vehicle insurances.
Impact on the company: Wide range of products would attract customers with different tastes, which increase the sales of the company. Additional services like ATMS and vehicle insurances would help the company to increase the customer loyalty.
7-eleven stores have the opportunity for brand tie-up with coffee chains, pizza outlets etc. in their locations.
Impact on the company: This will attract more customers to both these stores as well as for the brand partners.
Impact on the company: This helps 7-eleven to attract customers who are largely attracted to private labels than conventional stores.
THREATS
Supermarkets are posing threat to 7-eleven as in many parts of the world supermarkets have extended their operating hours.
Impact on company: These supermarkets might pose threat to 7-eleven by affecting the sales and hence profit of 7-eleven.
Flourishing of online stores will also pose threat to 7-eleven as people may prefer to buy products in the convenience of their homes.
Impact on company: This would also affect the sales and revenue of 7-eleven.
Shop-lifting is a major threat to 7-eleven stores. Security issues were reported in certain 7-eleven stores due to insufficient staff.
Impact on company: These security issues and thefts would adversely affect the revenue of the company.
Impact on company: This is also another element that adversely affects the profit margin of the company.
SWOT ANALYSIS AND STRATEGY
Strategy is about foresightedness of the future. It is a set of marketing and business plans to introduce and position in a market. A SWOT analysis helps to identify the strengths, weaknesses, opportunities and threats that exist in an existing and new market. It helps to analyze the strategies of competitors which may act as threats to the company.
Hence by conducting a SWOT analysis, a company will be able to devise various strategies to compete with competitors and position its product. 7-eleven would be able to devise suitable strategies in utilizing its strengths, opportunities to face the threat of competitors. SWOT analysis will help to minimize the threat of competitors by devising right strategies as well as to eliminate the weaknesses.
Benefits of SWOT analysis for marketing and management functions
SWOT analysis will help 7-eleven to devise marketing plans and strategies in pricing and promotional activities. Impact of SWOT analysis on various strategic management functions are discussed below.
Planning
Planning is the process of formulating a future course of action in order to achieve the goals of organization. It is the planning of strategic actions to achieve the goals.
Strategic decision making involves planning which are done by managers of the organization. Thus planning plays a role in formulating the set of strategies to achieve goals and compete with competitors. This is achieved with the help of SWOT analysis.
Issues in management functions like planning, organizing and controlling are identified with the help of SWOT analysis. This helps the company to focus of the strengths which dealing with the issues and reducing its impact on the company.
For instance, if the company identifies that there is an increased employee turnover through SWOT analysis, the company make increase open communications and improve grievance handling techniques for retaining the employees. Thus SWOT analysis supports the management function ‘staffing’.
Controlling
Controlling involves measurement of achievements against the set standards to ensure that there is no deviation in achieving the goals. It is an important management function that monitors if the strategies are working as per the pre-set plans. Controlling involves setting a standard performance as benchmark. Then the actual performance is measured and compared with the standard performance to assess any deviation. Thus corrective actions could be taken to direct the actual performance towards the strategic goals. All these procedures could be done during and after a SWOT analysis as a corrective measure for weaknesses of the organization.
(Source: http://daniellmiddle.typepad.com/files/management-functions-decision-making.pdf)
Recommendations for the management team
Management is recommended to maintain transparency within the organizations. Open communications should be promoted regarding the strength, weaknesses, opportunities and threats of the organizations. Employees shall be guided and trained to fight the threats of the organization. This would definitely increase the motivation level and commitment of the employees.
References
Retrieved from www.7-eleven.com
What is umbrella branding and its advantage in building a brand. (n.d.). Retrieved from
https://www.marketing91.com/umbrella-branding/
Functions of management and decision making. (n.d). Retrieved from http://daniellmiddle.typepad.com/files/management-functions-decision-making.pdf
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