Seven-Eleven Japan: Managing a Networked Organization

This teaching case study describes how a Japanese entrepreneur, Toshifumi Suzuki, created and has been managing the Seven-Eleven Japan chain of convenience stores, one of the most successful retail businesses. His success is the result of a continuous obsession with customer satisfaction combined with his innovative strategy (e.g., a meaningful differentiation around convenience, product and service quality, extensive outsourcing, partnerships with key suppliers) and an organizational solution where 7-Eleven Japan acts as the central "information broker" in an information technology mediated network. Suzuki created his company at the right time, i.e., when environmental changes in Japan were calling for a convenience store franchise solution. The traditional hierarchical and inefficient manufacturer-centered distribution system was giving way to a new customer-oriented system, government regulations were protecting small stores and customers were ready to pay a premium for convenience, quality and freshness. His "retail revolution" could not have been possible without heavy investments in information technology.

The case can be used with MBA students and corporate executives in four types of courses or interrelated topic areas: The "information broker" or "electronic partnerships" section of a course on networked organizations or new organizational forms. The section of a course on information technology discussing the role of IT in "transforming industry structure" or a module discussing how to create and sustain a competitive advantage through IT. The "distribution system" section of a course or module on the Japanese business system and its current transformation, combined with a discussion of the emerging use and role of information technology in Japanese business, The section in a course on "Managing Services" or "Managing Distribution Channels" discussing the role of IT in services, the development of a differentiated value proposition to the customer, or the impact of IT in changing the power balance in distribution channels.