Analyzing 7-Eleven Australia: Strengths, Weaknesses, and Strategies

This report provides an analysis of 7-Eleven Australia, a franchise convenience store operating in the retail industry. It identifies the company's strengths, including its successful franchise model, strong marketing strategies, and innovative approach to customer service through cashless stores and product development. However, the report also highlights criticisms related to wage compliance issues within its franchise network, leading to legal challenges and reputational damage. Recommendations include implementing stricter oversight of franchisee operations, ensuring ethical labor practices, and focusing on convenience store operations to adapt to changing consumer demands and the decline of fuel sales. The report concludes that while 7-Eleven excels in franchising and innovation, addressing ethical concerns and adapting to market trends are crucial for sustained success. Desklib offers similar solved assignments for students.

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Table of Contents
Introduction......................................................................................................................................2
Industry........................................................................................................................................2
Company......................................................................................................................................3
Another aspect the company excels.................................................................................................4
One aspect that the company is criticized........................................................................................4
Conclusion & Recommendations....................................................................................................5
References........................................................................................................................................6

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Introduction
This report is based on 7 Eleven Pty. Ltd as the company franchise convenience stores and
mainly operates in the retail industry by offering various products such as drinks, dairy products,
fuel and phone services. This report provides insight into the strengths or aspects in which the
company excels in and aspects by which the company faces criticism in the retail industry in
Australia. Further, recommendations are given for 7 Eleven for improving some of its aspects.
Industry
The retail industry in Australia is growing and expanding but the fuel retailers were affected by
the fluctuation in crude oil prices. Convenience stores provide goods and services such as car
washing and supplements to fuel sales. The main products in this retail industry are diesel and
petroleum. Retail industry revenue projected to increase in Australia at an annualized rate of 2.3
percent but firms who focus on fuel sales have to diversify their operations to other convenience
stores to gain profit shares and to increases their market share in the next five years
(Vuong,2018). From considering the above scenario it is analyzed that the retail industry will
grow in Australia if the companies focus on convenience store operations rather than petroleum
and diesel products. As the demand for diesel will reduce in the near future because of the
changing trend to the use of electric vehicles. 7 Eleven Australia is considered one of the chains
that meet the rising demand for conveniences. “The Australian convenience industry is rapidly
evolving and the goal of this industry is to meet the changing needs of consumers by
continuously testing and trial of new products and services to ensure that consumer demand can
be fulfilled on time (Chang and Meyerhoefe,2019).

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Company
7-Eleven Stores Pty. Ltd franchise and develops convenience stores. The company operates
convenience stores that provide a wide range and varieties of products including drinks, food,
dairy products, phone services and fuel. The company offers its products throughout Eastern
Australia. The company has stores in suburban areas that are operated as petrol stations. At
present 7-Eleven has grown since 1977 with 696 stores in, NSW, Victoria, Western Australia
and Queensland (7eleven, 2019).
One aspect the company excels
The one aspect in which 7-Eleven excels at is its franchisee's stores as the brad benefits from
choosing a franchise option rather than starting from scratch. By opting for franchise option the
company has strong marketing strategies, compliance support, business administration services,
and merchandising and buying expertise. One of the areas in which the company excels is
services offer by the company as 7 eleven has teams that work together with store leaders to
focus on providing services to customers for sustainable business growth (Armstrong, 2016). The
franchise model used by the company proves to be very useful as the company has presence
across the world with its franchises that contributed to building a strong brand image at the
global platform. Further with this, the stores in countries earn well because of motivated staff
and people that lead to the success of each and every outlet in different locations in different
countries. The stores of 7 eleven in Australia has effective and motivated staffs that provide

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positive and better services to customers that boost sales and profit levels of the company
(Insidebusiness,2019).
Another aspect the company excels
7-Eleven launched cardless and cashless convenience stores in Australia, this helps the company
to offer products to customers through an online and digital platform. The company always
offers innovative products and different experience to its customers, the new store of 7 eleven
gives a unique experience with no physical counters and with a fully automated process in its
stores with a specially designed application (Sparks, 2013). The company invests a huge amount
in innovation and product development and for increasing customer satisfaction. This helps the
company to excel in its field and to perform better than its competitors. 7-Eleven invest mainly
in refurbishments, development, and equipment so that the company can fund its innovative
ideas when required or if an idea has potential, and with franchise partners benefit from the
incremental growth the idea can deliver. So the company has funds and financial resources that
are invested by the company in its product development and innovative ideas.
One aspect that the company is criticized
7-Eleven is criticized for not paying its workers as the company operates in the franchise model
that leads to less control of the management on store operations. On the other side, there are lots
of financial resources available to the company as on average net profit of each store is $165,000
per store and shows 9 percent growth year on year. Instead of profits and growth, the company is
not able to pay its staff as per the Australian law and standard. Due to that the company buyback
its franchisees in most of the locations and this costs $1.7 billion to 7-Eleven (Pekarek and
Gahan, 2016). The workers of the company disclosed that they were not getting superannuation

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and payments as per the industry standard. The workers are struggling to get back their unpaid
wages and for that, they would take the help of labor unions to take legal action against 7-
Eleven. This leads to the negative brand promotion of the company and might leads to closure of
outlets of 7- Eleven in Australian locations. It is also known that due to lack of control of 7 -
Eleven on its convenience stores, wage fraud and biasness in paying structure on the basis of
caste and race this impacts the organization structure of the company and leads to inefficiency in
its operations. In order to stop these unethical practices and to take control of its stores the
company buyback franchises from any franchisee that was not happy with their business (Briton,
2015).
Conclusion & Recommendations
From the above analysis, it is concluded that the company excels in franchising stores and
maintaining balance in all its stores. Further, the company is able to provide innovative products
and experience to its customers because of its innovative approach. On the other side, the
company is criticized for not following an ethical approach for its employees as some of its
franchisees don’t pay to its workers as per the industry standard. From considering this, it is
recommended that the company should focus on implementing the same approach and decision-
making process in all its franchisees and have to control activities and operations of its stores in a
balanced way so that unethical activities by managers of stores can be reduced. Further, the
company has to be strict in implementing its policies in the same way in all its stores. On another
side, the convenience stores industry in Australia is expected to grow in upcoming years but
diesel and petrol operations going to reduce so 7 Eleven need to focus more on its convenience
store operations to increases its profits and sales.

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References
7 Eleven,2019. About Us. Accessed From: https://www.7eleven.com.au/about-us
Briton, B., 2015. 7-Eleven scandal: The tip of a low-wage iceberg. Guardian (Sydney), (1705),
p.1.
Chang, H.H. and Meyerhoefer, C.D., 2019. Inter-brand competition in the convenience store
industry, store density, and healthcare utilization. Journal of health economics, 65, pp.117-132.
Inside Business, 2019. 30 New 7-Eleven stores set to continue growing. Accessed From:
https://www.franchisebusiness.com.au/30-new-7-eleven-stores/
Pekarek, A. and Gahan, P., 2016. Unions and collective bargaining in Australia in 2015. Journal
of Industrial Relations, 58(3), pp.356-371.
Sparks, L., 2013. Reciprocal retail internationalization: the Southland Corporation, Ito-Yokado
and 7-Eleven convenience stores. The internationalization of retailing (pp. 63-102). Routledge.
Terry-Armstrong, N., 2016. 7-Eleven: A case study of a flawed franchise model. Busidate, 24(2),
p.8.
Vuong,2019. Fuel retailing in Australia. IBIS World. Accessed From:
http://clients1.ibisworld.com.au/reports/au/industry/default.aspx?entid=438