MANAGEMENT AND BUSINESS
Executive Summary
This report on Management and Business Context explains the aspects of business and how management must deal with the same. The business organization is of many types, but it is the duty of the entrepreneur to choose the best type organizational structure in which he would like to operate. A business organization can be defined as individual or group of people who come together for commercial goals.
The emergence of business organizations has helped many innovators of ideas, products and services come together to attain a specific goal. In this report, we will analyze the structure of 7 – Eleven and how their ideas and innovations have to lead to a healthier and more sustainable environment.
Table of Contents
Introduction 4
Organizational Structure 5
SWOT Analysis 5
Environmental Factors of 7 – Eleven 7
PESTLE Analysis
Internal and External Factors
Business Context
Conclusion 10
References 10
Introduction
7 – Eleven is a well-known brand across the world which deals with everyday products for households at the most affordable rates. The company was incepted in the year 1927 when “Uncle Johnny” Jefferson Green started selling staples from the local icehouse in Dallas to its customers. The company got into making drinks in 1933 when beer and liquor were repealed by the government which significantly impacted the growth of the company.
Later in 1937, Southland Ice Company President and Founder Joe C.Thompson Jr. took this idea to other ice docks where its selling tripled in value. After all these significant growths, in 1946 the company changes the name to 7 – Eleven which signifies its working hours from 7 am to 11 pm, seven days a week (Christensen, C 1997).
Organizational Structure
The company has the best of the talents to promote the brand and innovate. Their non-stop innovation is the reason for their success which cannot be denied.
Stanley Reynolds – Executive Vice President, Chief Financial Officer & Chief Administrative Officer is responsible for Finance and IT operations.
Joseph M. DePinto – President and Chief Executive Officer deal with retailing which means he works towards the expansion of the stores across locations.
Jesus H. Delgado-Jenkins- Executive Vice President and Chief Merchandising Officer, is responsible for new product innovations and merchandising.
Chris Tanco – Executive Vice President and Chief Operating Officer, develops the Canadian Business Unit.
Ena Williams – Senior Vice President and Head of International supports licensing, franchisee and joint-venture of stores.
Rankin Gasaway – Senior Vice President, General Counsel, and Secretary leads all legal matters for the company
Scott Hintz – Senior Vice President, Human Resources is responsible for handling issues related to Human Resources.
SWOT Analysis
Strengths
Weakness
Largest dealing in franchising and licensing
Multiple products availability
Multiple stores across locations
The company has clear vision to achieve their target
There are 45,000 employees across locations, and this helps in serving customers easy
Low cost and affordable even for customer from less affordable background
Easy accessibility
Less to no online facilities which make the customers less communicable to the management
Multiple stores across locations
High employee turnover due to poor management skills
Opportunities
Threats
Since the company is in the market for 20+ years, there is high scope for more brand recognition
Trust building is an acceptable factor
Online marketing will promote new customers having easy access for purchases
Since it is a reputed brand, they can also deal with organic products
Too many competitors in the market for the company like Walmart, D-Mart, Dollar Tree, etc.
Products may not be available immediately when the customer wants to buy
If the company does not make it online, there are high chances for the company to lag regarding competition.
Environmental Factors of 7 – Eleven
Every company has factors that are within and outside the environment which can be a boon or bane. It is up to the management to see what contradicts or which factors help them in development. Based on these the management must improve their current working scenario.
Trends keep changing between age groups and fashion. The trend of youngsters might not be the same as old people. Hence the company must perform an analysis from time to time to check the interest of its customer and how their tastes and preferences have changed.
PESTLE Analysis
Political & Legal:
Government regulations across countries
Pricing structures should not affect economy still it has major impact on the buyer capabilities
License procurement becomes an issue due to many outlets availability
Economic:
Multiple brands availability might leave the customers in a chaos
If the Great Economic Depression comes into the picture, all goods will be spoilt, and there is be a great loss on the pricing of the products.
The company does not categorize products based on customer interests and affordability
Social:
Since the brand is well recognized, any change in products needs to be updated
The company must make itself available online to market them well
Social Media Marketing is an important aspect here.
Technological:
The company has advanced technologically since they produce multiple products and testing is an important part here.
Availability of the products online must be taken into consideration
They have dedicated app which clearly explains about the availability of the products.
Environmental Factors:
Internal factors such as employee attrition, the resignation of employees and support form management are the factors that determine the quality of services provided by the company.
External factors such as product availability, transportation, weather conditions, customer interest, etc. play another role in determining the success of the company as a brand (Weihrich, H.,1982).
Business Context
Business context is a scenario where the management understands the possibilities of threats and new entrants into the market when there are opportunities. This is a situation which defines the next level of action to be taken by the management to protect its brand.
Micheal Porter’s Five Forces Model defines the importance of analyzing the five forces that rule the market: (Porter, M.E 1998).
Potential new entrants: 7 – Eleven deals with both FMCG and consumer based goods. The market for this is potentially high, and hence there is a lot of competition to new entrants in the market. Customers will tend towards brands that offer the same products at affordable cost.
The Threat of Substitutes: Since the company deals with consumer goods, there is a high threat of substitutes. Walmart provided the same products at a much cheaper rate when procured in bulk. Hence the customer might not mind buying a couple of extra products and storing them instead of going for the next purchase.
The threat of Suppliers: New suppliers are emerging in the market. Few others are establishing warehouses and selling them door to door to attract more customers.
The threat of Buyers: Since the company does not provide the facility to book online, the customers will tend to look at alternatives that can provide online booking facilities sitting in the comfort of the house than going to the shop for purchase and spending hours.
The degree of rivalry: Since new companies are emerging there is the exceptionally high degree of rivalry between competitors. The companies fight with each other directly and indirectly. Hence there have to be strict rules to mitigate the risks carefully.
Conclusion
To conclude, it is important for 7 – Eleven to open stores across the countries but also improve and enhance their online marketing. If not they will lose the market share significantly. Business management helps the company to understand their competition and what process can help them improve, innovate and invent products to sustain the on-going competition. They also gain an edge over the recent changes in the tastes and preferences of the customers. Market knowledge is an important criterion which enables the company to perform better from time to time.
References
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Porter, M.E (1998). Free Press, Competitive Strategy: Techniques for analyzing industries and competitors, New York, N.Y.
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