University of San Jose-Recoletos

Magallanes Street, 6000 Cebu City, Philippines

College of Commerce

IN PARTIAL FULFILLMENT OF
STRATEGIC MANAGEMENT

Submitted by:

#2 Alimurung
#3 Almaquer
#9 Apas
#10 Badajos
#12 Bukiron
#13 Canen
#25 Jumawan
#30 Paragoso
#34 K.Suarez
#35 L. Suarez
#38 Villacarlos

Submitted to:

Mr. Heno Rey Chin

INTRODUCTION

The concept of a convenience store was founded by John Jefferson Green, an

enterprising ice dock employee of Southland Ice Company located in Dallas, Texas. Who in
addition to selling blocks of ice the employee also offered to the customers other products such
as milk, bread, and eggs on days where grocery stores were closed. In the year 1927 the
Thompson eventually bought Southland Corporation and renamed it “7-Eleven Inc.”

“To make daily life easier by providing modern convenience” This phrase is the heart and
soul of a certain business, to be of a convenient company which provides the state a sense of
ease and to be able to proceed with something without difficulty. The company, The Philippine
Seven Corporation, was created to be the cradle of convenience and to be able to touch lives
indirectly by allowing access to the public for their own consumption, wherein the customers
are able to maximize their time while on the fast-paced integrity of their respective works
(Santos, 2014).

At the present, 7-Eleven is said to have opened approximately six stores per day around the
world making it the largest chain store in any category. The first store that opened in the
Philippines is located at the corner of Kamias Road and EDSA, Quezon City in February 29, 1984.
Currently there 2,287 stores, based on the statistics provided in December 2017, around the
Philippines (7-Eleven, n.d).

VISION

Our vision is to be the best retailer of convenience for emerging markets

MISSION

To make daily life easier by providing modern convenience

CORE VALUES

Teamwork
We foster an environment of synergy to attain the goals of the organization through
active participation and mutual respect.
 Integrity
We are honest and trustworthy to our fellow employees, customers and business
partners.

Reliability
We deliver what we promise.

Customer Focus
We put our customers first.

Data-driven
We make decisions based on data.

HISTORY

Mr. Blas Hipulan wanted to venture out more on establishments for construction,
wherein he himself would be the sole contractor. Then 7-Eleven gave an opportunity to him,
given that he would bare for all the cost for the construction and building up for the store. Mr.
Blas thought of the risk for 7-Eleven because it would cost millions for the franchise of the store
and Mr. Blas doesn’t have enough funds to venture up for a new business. But Mr. Blas did
think of it as an opportunity and grab it to have a passive income aside from their construction
business. Mr. Blas sold a car to help fund the franchise of 7-Eleven. Mr. Blas estimates for the
materials for the construction and 7-Eleven’s in house computation was in par and the material
used by Mr. Blas was not substandard which gains the trust of 7-Eleven when it comes to the
construction of a new store.

Since they are new to the retail industry they had to choose wisely for the spot. They
have considered slots and places that are mostly populated. Even though the lot costs a lot,
they took a risk. Mr. Blas also have considered the potential rival stores like La Nueva and Tita
Gwapa. But they realized that they aren’t much of a rival because the store opens 24/7 that
would cater the needs of the customers on the go any time of the day. They have put also into
consideration the traffic laws in Minglanilla, the store is located where the jeeps and cars can
stop- but it’s a no parking area, and stop in for the night for a long drive perhaps going to the
south.

The 7-Eleven Poblacion Minglanilla branch was officially opened on February 2014
around Chinese New Year and on 2015 the store was recognized as the well-maintained and
well-earned store of the year.
EDITED INTERVIEW

FM and Economics

1. How much is your target gross profit?

- This 7-Eleven is located in Minglanilla which is a bit far from the city proper. So, the
company said that we should be able to achieve an estimated gross profit of 400,000
-500,000 pesos per month. This target is lesser than the branches that are located in
the city.
2. How are you going to manage your profit or did you have some financial strategies used
for the past years?
- No, I do not have any particular strategy when it comes to finance. However, the
profit that we earn is used to revolve on our existing business.
3. How have your sales been for the last two years?
- Our sales are doing okay, but if we plot it out we are able to say that our sales are
increasing every year. However, this is not always the case because there are times
that our sales drop below our usual target.
4. Do you think that you need the ability to borrow more money to support your business?
- Yes, because sometimes we lack the money to pay the suppliers on time due to the
drop of sales. Also, there are times that additional capitalization is needed.
5. How do you prepare yourself and your business for the unforeseen economic changes?
- I and my team have prepared contingency plans for certain circumstances, but this
plan is limited as not all aspects of risks are covered.

6. What do you think are the key factors in order to achieve competitive success?
- Your business must be beneficial to you as an owner, beneficial to your
clients/customers, beneficial to your employees also.
7. Do you really think that your business is convenient for the people in our economy?
- Yes, because 7-Eleven provides convenient for the people in our municipality, and
with this convenience our customers are provided with ease for their day-to-day
 lives. Convenience stores are important in our economy as we give social
responsibility to the community.
HRD and Social

1. Are your employment contracts and HR policies bullet proofing the business from risk?
- We haven't covered all areas in the employment status due to many documentation
to be made.
2. What is the company wide sentiment?
- Be strict at the same time lend an open ear to your employees.
3. What are your ways in managing and keeping creative workers?
- I give incentive leave to my long employees and incentive program to my employees
who can hit target.
IT and Technological

1. What are the common issues you encountered with CliQQ system and how did you
address these issues?
- The most common issue that we have encountered with CliQQ system is that most
of our customers are not aware and familiar with the CliQQ. With this we have
noticed the need for them to be educated on how to use the system, especially for
paying their bills.
2. 7-Eleven is known for its points-system loyalty program, how does the system affect
your business? In your branch specifically, does it really help you attract loyal
customers?
- This branch is really dependent on the 7-Eleven marketing team. We are generally
relying on the main branch on how to promote and what to offer to our loyal
customers.
3. What is the inventory level you maintain in the store?
- The inventory level that we maintain in the store is around 800,000-1,100,000
pesos. It is to ensure that we can easily meet our customers demand even if
maintaining this amount of inventory level is costly.
 4. Which of your products need replenishment more often? What system do you use to
track the inventory? Is the system efficient and effective?
- We have observed that the products that are on the chiller area are the ones that
need replenishment more often as it is the most fast moving items. To be honest, we
do not have an accurate inventory system thus giving us a hard time in monitoring
the inventory process.
MM and Competition

1. Since there are some competitors around the area you are operating, how do you
convince your customers to continue buying your products?
- The fact that 7-Eleven is a well-known convenience store around the world, we do
not need to convince our customers to buy our products as we have a good
reputation making us confident in our business. Unlike some of our competitors we
offer our customers a 24/7 service which helps us maintain our status.
2. Have you addressed any feedback about a product or service in order to improve the
business?
- First of all, we take the initiative on what we can do since everything is dependent
on the mother company. However, if there are any feedback we immediately relay
the information to the management so that they will be able to make adjustments
that will give a better service to our customers.
3. Who are your main competitors that can have a large influence on your business?
- The main competitor that we have observed is the fast emerging convenient store,
Ministop.
4. What are the possible potential competitors that are not yet competitors but can be in
the future?
- The possible potential competitors could be international convenience store. This is
because they are bringing in their own reputation and are using their country’s
name in order to attract customers that has not experienced something that they
are the only ones offering. Customers wants to witness something new and fresh.
-
OM and Natural

1. Are there products that you don't offer in your business even if there is a high demand
of that product from the customers?
- As a convenient store our products only cater to the basic needs of the community.
However, there are certain products that are in demand, but this does not fall in our
scope and we are not able to provide to that demand.
2. Are there products that you do not have a stock for a very long time, if so what did you
do in order to have stocks of it again? If the supplier is at fault of it because of the delays
what did you do about it?
- There are some stocks that are over 6 months and some items are returnable to the
warehouse however we are really dependent on the mother company on their
decision on non-fast moving items.
3. Is there any circumstance that an expired food bought from the store? Did they
complain about this and how address the problem?
- Since we sell a lot of food here in our store, it makes us very prone on having expired
products. We once experienced this situation wherein a customer reported that the
product is expired. We addressed this problem by giving her medication and also
talked to the clerk who was in-charge of restocking the goods using the First in, First
Out System.
4. What recent natural calamity has caused your business to be in an advantage and
disadvantage?
- Natural calamities are usually unavoidable, thus we are left with the option of
accepting what is currently happening. Recently, it has been raining a lot and this
would result a drop in our sales since the weather hinders them from going inside
our store.
5. How does your business adjust and comply with the "No Plastic Policy" and up to how
much additional cost have you acquired?
 - Although some places here in Cebu have implemented the “No Plastic Policy”, the
local government unit of Minglanilla has not directly addressed this policy in their
local laws.
6. Were there other environmental policies that you were affected? If there are, please
enumerate.
- Here in our municipality, basic segregation of trash is the only environmental policy
that has been implemented.
Political

1. Maximization of profit often leads to unethical employee practices, how do you ensure
that employee rights are not violated?
- As their employer, it is my responsibility to ensure that my employees are provided
with the things are due to them, and that they are well compensated, to ensure that
they are able to serve with their maximum potential.
2. How does the amendment of the "Endo Contractualization" affect the growth of your
company?
- In our company, we only make our employees a regular if they have stayed more
than 6 months.
3. Given that selling liquors to minors are illegal, why are some 7/11 stores still selling
alcohol near schools?
- Other branches are taking the risk in order to maximize their profits, even if it is
through selling liquor near schools, making them fully liable if caught and negligent
of the law.
SWOT ANALYSIS (edited but needed explanation)

Strengths
 Established brand among masses or consumers
 24/7 store operating hours
 Good employee relations (gives incentives to well performed employees such as leave credits
and bonuses)
 Offers promo in partnership with certain special events such as giving tickets to concerts

Weaknesses
 Products or items are costly compared to products sold in the market
 Insufficient tables & chairs that cannot accommodate customers especially during rush hours as
the store is narrow and does not have a second floor
 The tables & chairs are most of the times left unattended and dirty.
 CliQQ syatem is mostly dysfunctional due to unstable connection and system breakdown
Inaccurate inventory system (many in demand products are out of stock such as ice cream,
slurpee and etc.)

Opportunities
 Convenience store is located in a highly commercialized area (near schools, church, near the
highway, Lungsod of Minglanilla)
 Grand events (such as fiestas, sugat kabanhawan sa Minglanilla) increases the demand of certain
items as a lot of people will visit the area

Threats
 Business competitors such as La Nueva. Gaisano, Prince and etc. offers consumers variety of
choices
 Consumers are unfamiliar as to the use or access of CliQQ system
 Prone to shoplifting (In cases where the guard leaves his post to assist to some customers’
demands)
 Food supplier doesn’t offer fresh food such as giniling, sisig and etc. are still needed to be
heated in a microwave
 Bystanders (e.g. street children) occupy the tables and chairs outside the store and sleep there
TOWS ANALYSIS (done edit)
Strengths (S) Weaknesses (W)
1. Established brand among 1. Products or items are costly
masses or consumers compared to products sold in
2. 24/7 store operating hours the market
3. Good employee relations 2. Insufficient tables and chairs
(gives incentives to well that cannot accommodate
performed employees such as customers especially during
leave credits and bonuses) rush hours as the store is
4. Offers promo in partnership narrow and does not have a
with certain special events second floor
such as giving tickets to 3. The tables and chairs are most
concerts of the times left unattended
and dirty
4. CliQQ syatem is mostly
dysfunctional due to unstable
connection and system
breakdown
5. Inaccurate inventory system
(many in demand products are
out of stock such as ice cream,
slurpee and etc.)
Opportunities (O)
1. Convenience store is located
in a highly commercialized S-O Strategies W-O Strategies
area (near schools, church,
near the highway, Lungsod of 1. Training and Development for 1. Additional Chairs and
Minglanilla) Employee Services to Tables(W2,O2)
2. Grand events (such as fiestas, customers (S1,O1) 2. Concentric Diversification in
sugat kabanhawan sa 2. Offer Special Packages on applying new inventory
Minglanilla) increases the Events (S2,O2) system (W5,O2)
demand of certain items as a 3. Timely Implementation of
lot of people will visit the area Promotions (S1, S4, O1)

Threats (T)
1. Business competitors such as
La Nueva. Gaisano, Prince and
etc. offers consumers variety S-T Strategies W-T Strategies
of choices
2. Consumers are unfamiliar as 1. Product Development (S1, T4) 1. Revamp CliQQ machine,
to the use or access of CliQQ 2. Improve Marketing (S2, T1) product development (W4,
system T2)
3. Prone to shoplifting (In cases 2. Improve Marketing and
where the guard leaves his Enhance Employee Service
post to assist to some (W1, W2, W3, T1 )
customers’ demands)
4. Food supplier does not offer
fresh food such as giniling,
sisig and etc. are still needed
to be heated in a microwave
5. Bystanders (e.g. street
children) occupy the tables
and chairs outside the store
and sleep there
 BCG (Boston Consulting Group) MATRIX – PRODUCT PROFILE

Stars Question Marks

Slurpees Ice cubes
Ice cream Hygienic products (face mask, skin
Busog Meals care)
Ready to eat foods (Sandwich, salads, Candies and mints
Market pasta) Chocolates
Growth
Cash Cows Dogs
Cigarettes Accessories (hair clips, combs, safety
Energy drinks and juices pins)
Alcoholic drinks Magazines and newspapers

Market Share
Stars

Products like busog meals, slurpees, ice creams and ready to eat foods are known as 7-Eleven’s
best sellers. These products generate ample amount of revenue to the business because it
continuously appeal to the costumers. To maintain good revenue out of these products, the
business must invest and maintain their lead to have a growing market share in a growing
industry.

Question Marks

For question marks, this quadrant shows products that are sold at a higher price for a little
quantity. An example would be ice cubes, hygienic products and chocolates. 7-Eleven brings out
an affordable brand out of these products, but with a good quality. Also constant purchase of
these would eventually result to an income and continuous growth.

Cash Cows

The products under this quadrant are in high market share and low market share. Products like
energy drinks, juices, cigarettes and alcoholic drinks are generating income for a long-term, a
significant amount in revenue. The products on hand must be available on occasions they are at
demand to consumers because it will generate cash to the business.

Dogs
The dog represents those products that are rarely/slowly purchased by the consumers. These
products include the following like accessories magazines and newspapers. The quadrant
explains that the products and items sold are declining where the company can have a negative
profit out of these products.

IDENTIFIED POTENTIAL PROBLEM (to be edited)

A. Store Accommodation (specifically seating capacity)

The existing convenience store plays a significant role in the market as it helps consumers have
an easy access to their necessities. Seven-eleven (7/11) convenience store, Minglanilla Proper
Branch has proved such advantage stated above, however, the area is insufficient in terms of
seating capacity.

1. How can they increase the seating capacity of the store?

2. Will renovating the area be helpful to address such problem considering their financial
capability?
• If they choose to renovate the store will they be able to regain after idle operations?
• What other ways could they apply to earn profit inspite ongoing renovation? Or will they just
cease operations for the mean time?

B. CLiQQ Service

The advent of technology gives rise to convenience and a faster, more comfortable way of
living.
With that, businesses tends to enforce technological improvements in their operations. As an
example, 7/11 is a convenience store that utilizes online services for payments and rewards
through the use of CLiQQ. However, most customers of the 7/11 Minglanilla Branch are either
unaware of such services, unfamiliar of its usage, or unable to access due to technical and
connection problems.

1. What is the importance of having the CLiQQ service?

2. How does the presence of CLiQQ affects the business?
3. What measures do they have to take educate the consumers regarding CLiQQ usage?
4. What means do they undertake maintain the service functionality and stable Internet
connection?