Although it’s sometimes forgotten about, Shikoku, one of the four large islands that make up mainland Japan, is as much a part of the country as Hokkaido in the north and Kyushu to the south. People eat rāmen, do karaoke and play pachinko, exactly like everywhere else. Take a drive around the island and, just like every other part of the country, you’ll find literally hundreds of convenience stores. Lawson, FamilyMart, Mini Stop, Coco Store -- they’re all here.
All, that is, except 7-Eleven.
Despite its 14,000 stores making it the dominant convenience store in Japan (with Lawson coming in second with 10,639 locations and FamilyMart’s 8,852 bringing up the rear) 7-Eleven has, according to Internet chatter, completely avoided an entire chunk of Japan. Can it really be true that, while every other convenience store is opening stores all over Shikoku, there isn’t a single 7-Eleven outlet on the island? A quick Google Maps search of Japan’s top three convenience stores reveals that – gasp- it really is true.
So, why, when there are an incredible 14,000 7-Eleven stores in Japan, comprising more than 30% of the entire world’s total, are there zero on Shikoku? A voodoo curse? A lost bet resulting in exile? The answer is at once far less glamorous, yet much more menacing, and can be summed up in a single word: “Domination”
Toshifumi Suzuki, CEO at 7-Eleven (or 7 & i Holdings, as its parent group in Japan is known), explains the company’s business strategy thus: “7-Eleven’s business plan revolves around area domination. From the outset, we look at an area and assess whether it’s viable to build a large number of stores. If so, we focus our attention on one small area.”
Focusing all of their efforts and resources on any one area at a time plays an important role in keeping costs to a minimum. Everything from distribution of stock to the reach of their advertising campaigns can be confined to one location. “On top of this,” Suzuki explains, “our food arrives faster and fresher.”
But that’s not all there is to it. What we see in the 7-Eleven business model is something akin to a small but very powerful explosion, focused entirely in one area.
“Once one store has been opened, more follow in quick succession. Word of mouth spreads, and people become more and more familiar with the sight of our stores as they run into them more and more often … Although at first, each of the stores make only a minimal profit, once people’s recognition of the brand reaches a certain level, we see a sudden and dramatic increase in both visits to the store and sales figures” Suzuki explains.
So, rather than spreading themselves thin, 7-Eleven moves in, opens a bunch of stores and takes control of an entire area, the sight of each store acting as a sort of subliminal reminder.
Now that we come to think of it, whenever we’ve come across a 7-Eleven store in the city, we usually stumble over another one in no time at all. Looking back at the map, we can see that, while its competitors can be found pretty much all over the country, 7-Eleven remains focused on fewer, key areas, each with almost double the number of stores. They really do spring up in clusters.
It’s clear that this strategy works well for the company. If we take the city of Osaka as an example, looking back at the late 1990s, the city was very much “Lawson territory”. But within just a few years of 7-Eleven’s arrival in town, an incredible 300 stores had sprung up. In the blink of an eye, 7-Eleven had become top dog, and nowadays you couldn’t walk down a street in Osaka without running into one.
So, why avoid Shikoku?
According to 7-Eleven’s information center, "there are no immediate plans to move into town, but it will happen.” And when it happens… they’ll dominate.
Source: Zasshi News via Yahoo Japan© RocketNews24