7-11 Japan: Question 4

Q4. Identify the critical success factors of business plan of 7dream.com

Resolve the Major Obstacles to E-commerce in Japan

When organizing the business plan of 7dream.com, 7-Eleven exerts much effort to resolve the obstacles of e-commerce came from traditional culture and environmental issues. The following table shows the solutions for each barrier:

Type of Obstacles	Obstacles	Resolution
Culture	Japanese consumers afraid to reveal credit card information over the internet and prefer paying by cash	Consumers can pay the on-line purchases by cash at 7-Eleven stores
	Japanese consumers like shopping off-line to touch products and ask for discounts	7dream.com searches major Japanese companies as business partners to give confidence to consumers
	Japanese consumers are always not at home to receive the parcels from online orders and worrying mailing errors	Customers can pick up purchased items at 7-Eleven stores
Environment	Number of homes with personal computers is low	7-Eleven stores installed internet-based multimedia Kiosks
	Off-line shopping is convenient in Japan which streets packed with stores selling daily necessities	7dream.com offers merchandizes which are not discovered at convenience  stores

Low Operation Cost

One of the reasons is 7dream.com only needs to deal with wholesalers which means it can obtain items directly from the warehouses of its suppliers. In this way, it does not need to bear any inventory holding and warehousing costs. Moreover, the 7dream.com model makes use of existing 7-Eleven delivery system instead of building another new system to save cost. By employing 7-Eleven’s distribution system to deliver orders of 7dream.com to 7-Eleven stores, customers would now be attracted since they only be charged a low delivery rate.

Convenient Location

Recently there are more than 16000 7-Eleven stores in Japan which can provide a convenient shopping experience for consumers to pay the purchased order and pick the items at the stores.¹

Variety of product / service

7dream.com cooperates with some big Japanese companies to offer services and products which can fulfill the purchasing pattern of Japanese in eight content areas: travel; music; photographs; merchandise; gifts; mobile phones; tickets; books; car-related items and information. Besides, the merchandizes offered by 7dream.com usually are easy for handling but would not be available in convenience stores in order to attract consumers.

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Reference:
7-Eleven, n.d.. Total number of stores in Japan. Available from: <http://www.sej.co.jp/company/tenpo.html>[26 Feb 2014]