Seven and I Holdings SWOT and PESTLE Analysis

Strength

1. Strong Financial Performance and Strategy: Seven and I holdings has been a consistent performer in terms of revenue with operating income in FY 2017 being 5,835.689billion yen and growing to 6037.815 billion yen in FY 2018. The reported growth over 2017 is 3.5%. The Cash flows saw a decline from 512523 million yen to 498306 million yen in 2018.The superstore segment contributed to 1,901.1 bn profits, the department store profits were 657.8 billion, financial services showed a good performance with 202.9 billion, specialty stores with a profit of 416.6 billion while other segments contributed to 23.5 billion profits. The company follows a growth strategy which involves primarily expansion through mergers and acquisitions, franchising and enhances product line-ups in its stores. Seven and I group focus mainly on CVS operations in Japan and North America. The primary objectives lie to promote Omni-channel strategy, development of stores and promote each business category as well as geographic area.

2. Global market presence: Seven and I holdings has developed its global presence over the years. Seven and I holdings has been expanding its global footprint by using a strategy of strategic acquisitions and franchising. Starting in 2005, the company has diversified its presence across strong markets like United States, Australia, and Canada. The company has experienced a growth of 3.5% in 2018. There are 63000 seven-eleven stores present across the world in 17 countries. Further expansion in NorthAmerica is planned by the acquisition of Sunoco stores. Revenues from overseas convenience store operations decreased 8.9% year on year, to ¥1,658,542 million, but operating income increased 0.9%, to ¥67,421 million. In July 2016, SEI acquired the stores of CST Brands, Inc., in the United States, while in September Imperial Oil Limited of Canada was acquired. As a result, SEI’s store network reached 8,707 stores, as of December 31, 2016.

3. Strong brand equity: Seven and I holdings overall global presence and reputation across various countries has led to its brand development over the years. Seven eleven stores have been one of the major convenience store brands across countries like United States, Japan. The seven eleven stores offer a wide range of brand offerings which helps them attain customer loyalty and thus a stable brand position. For example, they have Movie quick brand which is exclusive to US stores. Seven eleven stores have been ranked no. 1 in Japan’s per Convenience store chain ranking by total store sales

4. Continuous focus on innovation and creativity: Seven and I holdings have always kept themselves at par with the market needs and developed their product and service offerings over the years across different segments. By providing at home deliveries through Raku-Raku delivery services the group tried to bridge the gap of customer inconvenience. Apart from this, the company has introduced private labels in form of seven premiums. The company has also introduced innovation in its café cups as well as PET bottles using eco-friendly and recycling containers. Also, the replacement of paper packaging of alcohol products with aluminium packaging was a new packaging innovation adopted by the group. Further to improve customer convenience the company also changed the layout of stores which will bring more store space and enhance ease of shopping

Weakness

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Opportunity

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Threat

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Political

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Economic

1. Sharp fluctuations in currency markets: The increased political and economic certainty globally has caused sharp fluctuations in the currency market. Seven and I is present across various geographies which makes them exposed to variations in exchange rates of various currencies against the U.S. dollar as well as against other currencies throughout the world. Foreign exchange rate changes can affect the yen value of assets and liabilities of the Group's overseas companies because Seven & I Holdings' consolidated financial statements are presented in Japanese yen. The reporting is also done keeping in mind the exchange rate, so a fluctuation in currency market will lead to higher or lower reported results. In addition, products sold by the Group include products that are sourced overseas and affected by changes in foreign exchange rates

2. Impact of Change in economic conditions: There is a continuous change in economic conditions across various countries where the group operates. The group is in a strategic growth path by identifying consumer behaviours and adopting its sales strategy accordingly. Purchase power, consumer dynamics are some of the factors which may change as per the change in economic policies of the respective country. For example, Seven and I holdings have recently purchased many of the fuel retail companies in the strategy of vertical integration of its supply chain to offset its declining profit margins but external factors like change in prices as well as climate conditions may affect the operations.

Social

1. Changing Consumer demands and preferences: Product Design quality and safety has been one of the major criteria of buying preference for customers. Increasing focus on buying convenience and product availability. Be it retail or even banking, customers are shifting towards more convenient services as compared to other brands. The Group has been working with business partners to differentiate its high-quality products and to create convenient services. The groups has been innovating its production, distribution, sales and their supporting information systems to cater to the changing needs of consumers and in lieu of the market competitions. Apart from this, to improve shopping experience the firm is renovating its store layouts. To improve the buying experience the firm has integrated financial services with retail services. The group has been promoting the use of the Seven Card Plus/Seven Card credit card, CLUB ON/Millennium CARD SAISON credit cards and nanaco electronic money. Consumer preferences have also shifted to healthier options and organic products.

2. Focus on product safety and labeling: Product safety and information about the product the customer buys are one of the major criteria which affect the buying behavior in recent times. Major retailers and manufacturers are ensuring proper quality checks and safety checks about the product. Especially the nutritional value, ingredients etc. about the product is what the consumer tries to avail while buying a product. Seven and I holdings endeavors to provide customers with safe products and accurate information of its food products as per the relevant laws. The group has taken special care of check of suppliers through an integrated product management system. Apart from its regular products, the group is striving to provide customers with new value-added and high-quality products and services through the aggressive introduction of Seven Premium private-brand products and original products developed by respective Group companies. Also, SEJ became the first convenience store chain to sell originally boxed lunches, rice balls and sandwiches free of preservatives and artificial coloring.

Technological

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Legal

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Environmental

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