7-Eleven
Table of contents:
Table of Contents: 1
Introduction: 2
External and internal factors affecting the company 2
Critical issues facing 7-Eleven organization: 4
Recommendations: 5
Conclusion: 5
References: 6
Introduction:
7- Eleven Company is a convenience stores chain which operates in more than eighteen countries around the world. This company was founded in Oak Cliff, Texas in the year 1927. But it changed its name to 7-Eleven in the year 1946. This company is the second largest private company in Australia due to many reasons. As it provides convenience in shopping for the migrated population from rural to urban areas, it has become popular with the working age population of the country. This essay would talk about the critical issues that affect the business and management of 7-Eleven company in Australia and around the world. It discusses the internal and external analysis of the company that affects its decision making and also addresses domestic and international factors affecting the business strategies of 7-Eleven.
External and internal factors affecting the company
The external factors affecting any company is analyzed using PESTLE analysis where the political, economic, social, technological, legal and environmental factors that prevail in the country affect the business of any organization (Daft, 2010).
Political factors that affect 7-Eleven change from country to country as it operates in more than eighteen countries; the government policies in these countries pose various challenges to this company and the way it works in each country changes according to the government policies. These political factors will affect the money that investors invest in 7-Eleven and also the various stakeholders like the shareholders and the employees’ interests.
The economic factors that affect the organization also differs from country to country as some countries might be facing a recovery or boom condition which might increase the business operations of the 7-Eleven and some countries might be facing recession which might result in downfall of sales for the organization as the consumers would have less purchasing power during recession.
The social factors that affect the business activities of 7-Eleven would include the beliefs, opinions, attitudes and lifestyles prevailing in the country which might create differences in consumer preferences and also might shift the changes in employment of human resources. As the customer is the king for the convenience store, these social factors affect the success of the company as consumers demand quality goods and services in the country with increasing incomes in Australia.
The Technological factors affecting the business would be the changes in the transportation and communication facilities that affects the organizational activities of convenience stores. For example, 7-Eleven faces intense competition in the case of internet retailing, and such competition should be met with the effective delivery of products which would increase the consumer confidence in the stores, and such an effective delivery would be possible only with significant changes in the employee engagement (Suzuki, 2011).
Legal environment that affect the business activities of the stores would be the laws and restrictions that have an effect on the repatriation of the capital and would affect the management fees and profits that have to be paid in the form of taxes to the government and all this would affect the operational activities of the retail convenience stores. Regulations on price controls would also affect the business operations as this would reduce the profits of the stores.
Environmental factors that include the pollution and negative externalities created by the company 7-Eleven would be affecting the various stakeholders and communities in which the firm operates, and this would have repercussions on the image of the company.
The Internal factors that affect the working of the organization are explained through the SWOT analysis of the company, and this describes the strengths, weaknesses and opportunities and threats of the 7-Eleven organization.
The strengths of the organization are such that they are low price stores which make it affordable for the consumers. It is also more convenient for the consumers as they can shop when they commute back from work. With the internet shopping facilities, the consumers can also avoid the parking problems, long lines during checkouts and traffic (Model, 2012). The various shopping methods available with the convenience stores like browsing the aisles, or through the shopping list make customized shopping easy for the customers. As the stores are open for 24/7, the consumers find it convenient to shop whenever they want (Marlin, 2015). There is also a wide selection of products from fresh foods to processes foods and also the necessities which the consumers find at affordable prices.
The weaknesses that the company 7-Eleven faces in Australia is the increasing competition from major convenience stores and supermarkets such as Coles and Woolworths which makes it difficult for the company to fight for market share. And with the increasing share of educated people who are becoming more demanding, the company has to maintain its quality in both products and service. The employee turnover rate is very high for the 7-Eleven which has created a bad management image for the company (Shuck, 2011).
7-Eleven has increasing opportunities in Australia as many of the people are taking up to online shopping from the company’s website. With the increasing dissemination of information, the new technological developments have made it possible for efficiency in the business operations of 7-Eleven. The locations of the stores in the central points of CBD have given strategic advantages to the convenience stores.
The major threats that are faced by the company are its inefficiency in inventory maintenance which has made it inconvenient for the shoppers who look out for specific products and are turned down with out of stock replies. The low performance of the workers has also made the quality of the service provided at the stores questionable.
Critical issues facing 7-Eleven organization:
The main issue faced by 7-Eleven in most of the countries is the intense competition. With continuing globalization, it should have the proper, efficient leadership to maintain quality in these stores. And with the fact that all the superstores are emerging as 24/7 stores, it becomes necessary to maintain the employees of the organization with proper monetary and non-monetary incentives in which 7-Eleven is falling behind (Greene, 2014).
One of the major issues that the organization is facing is the high employee turnover which is due to the inefficiencies in handling the employees and inhumane work conditions provided for them. This has resulted in high employee turnover for the organization. It is also filed with scams in wage fraud. There have been claims that more than 20000 workers in the past decade are underpaid by 7-eleven which has caused the high employee turnover in the company (Chung & AAP, 2016).
Another critical issue facing the organization 7-Eleven is the changing innovations in the production technologies, and even to this problem, the performance capabilities of the employees must be developed to adapt to these changing innovations. It has to be realized that human resource development not only helps in supporting the business strategies of 7-Eleven but rather it forms the part of shaping those business strategies (Kamble, 2011). The success of any organization (particularly in convenience stores where service quality is also important) hinges on the expertise of the employees in the organization as they form the part of shaping the strategies of business for that organization (Power, 2016).
Recommendations:
Following are the recommendations for reducing the high employee turnover rate for the 7-Eleven organization. It should provide its employees with proper monetary and non-monetary employees who would solve half of the whole problem. Apart from this, the organization should arrange for regular training and feedback for the workers who would help in increasing the total quality management for the convenience store (Fuller, 2014).
Thus the company has to improve its human resource development programs which would play an important role in maintaining the expertise of the employees to achieve the objectives of the organization. The various HRD models available highlight the importance of addressing the issues of the employees as they are the important source of organizational development and customer satisfaction. As employees are treated as internal customers of the organization, they should be treated with proper incentives to contribute effectively to the achievement of the organizational objectives (Fachrunnisa, Adhiatma, & Mutamimah, 2014).
The ERP (enterprise resource planning) that was installed with the convenience store would also require the human capacity building to ensure the maximization of performance by the system. The improvements in employees expertise are the key to the success of any organization and 7-Eleven is not an exception to it. Only when the knowledge and skills of the employees are fully utilized by an organization, it can succeed in its external environment.
Conclusion:
One of the main critical issues faced by the Franchisor Company 7- Eleven is its high rate of Employee turnover, particularly in Australia. And this has to be reduced with proper incentive provided to the people inside the organization. As employees are one of the important stakeholders of an organization, who have a profound impact on the success of an organization, 7-Eleven should improve the working conditions of the workers at its convenience stores so as to improve its quality of service to its customers. Only when the internal customers (employees) are taken care of well, the quality of service they provide to the external customers would be efficient.
References:
Chung, F., & AAP. (2016, May 13). Panel member says ‘jury is out’ on whether 7-Eleven can survive without underpaying staff. Retrieved from News.Com.AU: http://www.news.com.au/finance/business/retail/panel-member-says-jury-is-out-on-whether-7eleven-can-survive-without-underpaying-staff/news-story/8f9545ba197f4b58482d05c260ba5586
Daft, R. L. (2010). Organizational Theory and Design. Cengage Learning.
Fachrunnisa, O., Adhiatma, A., & Mutamimah. (2014, July). The role of work place Spirituality and employee engagement to enhance job satisfaction and performance. The International Journal of Organizational Innovation, 7(1), 15-32.
Fuller, R. (2014, November). A Primer on Measuring Employee Engagement. Harvard Business Review.
Greene, R. J. (2014). Contributing To Organizational Success Through Effective Performance Appraisal. Retrieved January 16, 2017, from Reward Systems: www.shrm.org/multimedia/webcasts/Documents/12greene_orgsuccess.pdf
Kamble, R. R. (2011). Managerial Skills for Organizational Performance: An Analytical Study, ISRJ, 23-27.
Marlin, S. (2015). The 24-Hour Supply Chain. Retrieved from https://profesores.ing.unab.cl/~gbadillo/archivos/cursos/management-information-systems/Case%20Study%20/7%20Eleven.pdf
Model, B. (2012). Appendix: 7-Eleven, Inc.’s Business Model. Retrieved from http://www.7andi.com/dbps_data/_template_/_user_/_SITE_/localhost/_res/ir/library/ar/pdf/2012_12.pdf
Power, C. (2016, Jan 12). Opinion: Four key learnings from the 7-Eleven wage crisis. Retrieved from http://www.hcamag.com/opinion/opinion-four-key-learnings-from-the-7eleven-wage-crisis-210369.aspx
Shuck, B. (2011). Four emerging perspectives of employee engagement. Human Resource Development Review, 10(3), 304-28.
Suzuki, T. (2011). Seven Eleven -Corporate Profile. Retrieved from http://www.sej.co.jp/mngdbps/_template_/_user_/_SITE_/localhost/_res/pdf/en/e-yokogao2010-2011.pdf