FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

STRATEGIC MANGEMENT PAPER FOR

7-ELEVEN PHILLIPPINES

Submitted by:

Agcaoili, Justine Vincent

Chua, Charles Matthew

Dela Rosa, Von Joven

Dela Torre, Andrei

Hernandez, Luis Angelo

Perol, Ryan Christian

Villon, Jhoyzelin Mari

Table of Contents
1. Case Background.................................................................................................................................5
2. Environment Analysis..........................................................................................................................6
A. General Environment..................................................................................................................6
A.1.2. Technological Forces............................................................................................................6
A.1.3. Economic Forces...................................................................................................................7
A.1.4. Environmental Forces...........................................................................................................7
A.1.5. Politico-Legal Forces.............................................................................................................7
A.2.Threats............................................................................................................................................8
A.2.2. Technological Forces............................................................................................................8
A.2.3. Economic Forces...................................................................................................................9
A.2.4. Environmental Forces...........................................................................................................9
A.2.5. Politico-Legal Forces...........................................................................................................10
B. Operating Environment.............................................................................................................10
B.1.1. DENR honors environmental achievements....................................................................10
B.1.2. Promote private brands more aggressively.....................................................................10
B.1.3. New markets are opening as a result of government settlement..................................11
B.1.4. New markets are opening as a result of government settlement..................................11
B.1.5. New technology...................................................................................................................11
B.1.6. Additional clients from internet channel............................................................................11
B.1.7. Shareholders' Actions.........................................................................................................12
B.1.8. Loyal coin..............................................................................................................................13
B.2 Threats..........................................................................................................................................14
B.2.1. Price......................................................................................................................................14
B.2.2. Increasing competitor in the retail sector..........................................................................14
B.2.3. Tax Reform for Acceleration and Inclusion (TRAIN) Law..............................................14
B.2.4. Unusual advancement in product delivery.......................................................................14
B.2.5. Security.................................................................................................................................15
B.2.6. Urban market saturation and rural market stagnation....................................................15
B.2.7. High rental costs..................................................................................................................15
B.2.8. Seasonal...............................................................................................................................16
C. Internal Environment.............................................................................................................16
C.1.2. Production/Operations........................................................................................................16
 C.1.3. Finance.................................................................................................................................16
C.1.4. Organization & Management.............................................................................................17
C.1.5. Human Resources...............................................................................................................18
C.1.6. Research & Development..................................................................................................18
C.1.7. Information Systems...........................................................................................................19
C.2 Weaknesses............................................................................................................................19
C.2.2. Production/Operations........................................................................................................19
C.2.3. Finance.................................................................................................................................20
C.2.4. Organization & Management.............................................................................................20
C.2.5. Human Resources...............................................................................................................20
C.2.6. Research & Development..................................................................................................21
C.2.7. Information Systems...........................................................................................................21
D. External Factor Evaluation Matrix................................................................................................22
E. Internal Factor Evaluation Matrix.................................................................................................22
F. Competitive Profile Matrix.............................................................................................................24
G. Assumptions...................................................................................................................................25
G.1. General Environment Stability..............................................................................................25
G.2. Industry Growth Prospects....................................................................................................26
G.3. Company's Competitive Position..........................................................................................26
3. Problem Statement............................................................................................................................26
4. Alternative Courses of Action...........................................................................................................27
A. Tows Matrix.....................................................................................................................................27
B. Internal-External Matrix.................................................................................................................27
C. Grand Strategy Matrix...................................................................................................................28
D. Summary of Strategies..................................................................................................................28
5. Recommended Alternative and Action Plan...................................................................................29
A. Quantitative Strategic Planning Matrix........................................................................................29
B. Action Plan......................................................................................................................................30
C. Financial Projections.....................................................................................................................31
C.1. Sales Forecast........................................................................................................................31
C.2. Income Statement Forecast..................................................................................................31
C.3. Balance Sheet forecast..........................................................................................................32
C.4. Cash Flow forecast.................................................................................................................33
References.................................................................................................................................................34
1. Case Background

7-11 is an American convenience store that opened it’s first branch in the Philippines on
February 29, 1984, at the corner of Kamias Road and EDSA Quezon City, Metro Manila. But
two years prior, on November 23, 1982, Philippine Seven Corporation or the PSC was
registered with the Securities and Exchange Commission. Through this they acquired the
license to use the 7-11 convenience store in the Philippines. The incorporators were Jose T.
Pardo, Vicente T. Paterno, and Francisco R. Sibal. The company’s chief mission during that
time was to provide a new retailing concept to Filipino consumers which is the 24 hours
convenience stores. 7-11 in the Philippines is a well-known go to convenience store in the
Philippines because of the variety of products that they offer, which range from the typical
snacks, beverages, ready to eat meals such as their sisig and tuna omelet to name a few, their
own ice cream and even utilities such as toiletries and batteries. Also, because of modernization
7-11 also introduced their CLiQQ kiosks where customers can do an array of things such as
paying their electric bills, cashing in for digital wallet funds and even being able to do bank
transfers without going to the banks. Like any other business 7-11 took a hit from the COVID-19
pandemic. According to CNN, PSC saw a net loss of ₱419.7 million from a ₱1.44-billion profit in
2019 after the economy suffered due to the COVID-19 pandemic. Along with the decline in
income Philippine Seven Corporation opened 50% less stores in 2020 where they ended with
2,940 stores. However, as the situation began to stabilize Philippine Seven Corporation braved
uncertainties and managed to open 200 new stores in the first half of 2021 despite the existing
COVID-19 pandemic along with its restrictions.

Vision Statement: Our vision is to be the best retailer of convenience for emerging markets.
Mission Statement: To make daily life easier by providing modern convenience.
Proposed Vision Statement: To maintain being a top competitor in customer preference and
market share by continuously providing our consumers with high-quality products and innovative
services while taking into consideration our environmental and ethical responsibilities as a
corporation.

Proposed Mission Statement: To make consumers’ daily lives easier by offering convenience
with continuous innovation such as consistent improvements and innovations of products and
services and the implementation of modern technology to our services so that our corporation
would remain competent in the modern era and achieve sustainable economic growth.

2. Environment Analysis

PESTLE analysis is one of the important tools to use to consider the environment of an
organization. This includes considering the political, economic, social, technological, legal and
environmental factors surrounding a business.

A. General Environment
A.1 Opportunities
A.1.1. Socio-Cultural-Demographic Forces

Modern day collaboration with the local delivery industry can be an

opportunity for 7-11. With this they can further provide for customers who are still
hesitant of going out. Also the use of the ever growing social media through it’s
different platforms can allow 7-11 to connect more with their customers which are
primarily adults and youth who want the convenience of buying a product that is
normally available in the supermarket. Through social media they can also
formulate strategies for them to be more preferred by their target market. They
can also identify market trends with the help of social media and use this towards
their advantage. These socio-cultural-demographic forces can be utilized by 7-11
by considering the population, gender, education, age and the existing norms
and values to further grow themselves especially the Philippine economy is
slowly going back to it’s pre-pandemic state.

A.1.2. Technological Forces

With the ongoing modernization of almost everything mostly because of

the COVID-19 pandemic, 7-11 can provide a more powerful version of their self-
service kiosks, CLIqQ, in administering not just bill payments but as well as in
store transactions. This will reduce over-the-counter transactions, and this
lessens the risk of passing COVID-19. This can also be used by 7-11 to minimize
costs and make in store transactions faster and more efficient. The use of self-
service kiosks is becoming more prominent, this promotes faster service,
reduced waiting time, operation efficiency, improved accuracy and more accurate
 data capturing (Oracle). Another technological opportunity for 7-11 is more
efficient utilization of their data since they have stated that they are a data driven
company. They can adapt the use of AI which will use the data from different 7-
11 stores and identify the optimal assortment and distribution of products for
each store. 

A.1.3. Economic Forces

The gradual opening of the Philippines Economy is an opportunity for 7-
11. In 2021 7-11 narrowed it’s loss by 7%. This is a good indicator because along
with the narrowing of loss 7-11 can also expect an increase in sales per store
affecting their SSSG or same store sales growth because of the lowering of
restrictions and gradual increase of foot traffic of 7-11. If the situation gets even
better NEDA predicts the Philippine economy to go back to pre-pandemic levels
which is beneficial for 7-11.

A.1.4. Environmental Forces

Environmental forces can also post an opportunity for 7-11. This is in

relation to 7-11’s adaptation of their AI to know optimal product distribution in
each store. 7-11 can also take into consideration the climate and condition on
what to focus on bringing in a store (Bush,2016). An example of this is the
availability of ice and cold drinks during the summer season. Taking into
consideration environmental forces will also allow 7-11 to further understand the
needs of their customers.

A.1.5. Politico-Legal Forces

The recent election in the Philippines may pose an opportunity to 7-11.

This is because a new administration can improve the different regulatory bodies
when it comes to businesses in the Philippines. If the government can make
regulations that can make costs lower through different programs 7-11 can
benefit from this. 7-11 also follows the minimum health standards set by the DOH
and DTI, this serves as an opportunity during this time because as the COVID-19
pandemic continues customers would be more inclined in supporting a business
 where they know they are safe, in this case 7-11, an example of this is 7-11
having employees who are fully vaccinated. This allows 7-11 to continue
operating and have them attract customers since they have made themselves
known as a safe establishment.

A.2.Threats
A.2.1. Socio-Cultural-Demographic Forces

The COVID-19 pandemic brought through changes in what is normal.

Lockdowns and restrictions prevented people from going out making it the new
normal. In response to this, people would tend to order online from numerous
restaurants and fast-food chains available in different delivery applications such
as Foodpanda and Grab. This being the new normal, 2020 alone saw 57% of
Filipinos ordering more food through these delivery applications (Statistica,
2021). This is a threat to 7-11 because instead of people going to them to get a
quick meal or a quick purchase of goods people would be more inclined to use a
delivery app to do that for them especially if there isn't a 7-11 near them.  They
would rather stay in the comfort of their own homes and use a delivery app rather
than go out and go to a 7-11 store to purchase what they need.

A.2.2. Technological Forces

7-11’s own machines such as their refrigerators, dispensers and CliQQ

kiosk machines are also a threat to their own. This is because it is very usual for
7-11 branches to have technical difficulties that would last for days, and this
costs them sales for the day and money for fixing it. Breakdown of 7-Eleven’s
business, general merchandise accounts for 78.88 percent of sales, food service
and cup drinks at 17.60 percent, while bills payments and ICT services at 3.52
percent (Caña, 2019). By looking at the breakdown of the percentage of sales it
can be implied that if something breaks regarding a certain component the
percentage of sales concerned with that will decrease. If a branch can’t resolve
this immediately and the problem persists for days, there is money being lost due
to not having a machine working for certain products.
A.2.3. Economic Forces

According to the PSA inflation in the Philippines has increased to 6.1% as of

June 2022 and this is the highest inflation rate since 2019 after the consumer
price index was rebased. This is a threat to 7-11 because when inflation rises
prices increase. Increase in inflation means that people will not be able to afford
the increasing prices of goods unless income increases at the same rate. If this
continues the price that 7-11 gets their goods will also increase making their high
costs even higher. This will also reduce the purchasing power of consumers
which will most likely affect the sales of 7-11. Demand and supply will also
become a threat to 7-11 because of inflation since the costs will be higher. 7-11
will opt to obtain less inventory than they usually do to be able maximize profits,
and this will lead to a further increase in price for consumers with the principle of
supply and demand.

A.2.4. Environmental Forces

COVID-19 is still a threat for 7-11. Pre-pandemic 7–11-foot traffic would

be around 900-1,000 customers per day for a single store (Caña, 2019).
Spending of customers also changed, pre-pandemic saw a P64 average
transaction per customer, during the pandemic the average amount per
transaction increased to P89 however it is to note that because of the low foot
traffic of 7-11 stores due to lockdowns and imposed quarantine the average daily
sales of pre pandemic 7-11 was still higher even if the average amount spent per
person is lower. Another environmental threat to 7-11 is the increase in the
number of it’s competitors. 7-11 alone has 2,940 branches back in 2020
(Statista), which is the highest number of convenience stores in the Philippines,
however it is to note that when the number of branches their fellow convenience
store have are combined they would reach around 1,600 this is also still not
considering the new entrants to the Philippine convenience store scene and
other competitors such as sari-sari stores which Jose Paterno, CEO of Philippine
Seven Corporation, consider as their largest competitors wherein they lose to
 them not in terms of price but in size. Paterno also mentions that it is about who
is being the most convenient to the customers. 

A.2.5. Politico-Legal Forces

The recent election in the Philippines may pose a threat to 7-11. This is
because a new administration can implement changes in regulatory policies such
as in tax, laws, wages, prices, and the market in general. These changes may
affect costing for 7-11. According to 7-11 Philippines, that majority of their stores
were open during the ECQ but they would have to comply with the regulation of
the LGU they are under, furthermore they closed some branches especially
those that are close to each other. This is a threat to 7-11 because the limited
number of hours open (depending on the LGU) and the temporary closing of
some stores will affect their profits come the end of the year. The curfew that was
implemented during the ECQ played a threat to 7-11. According to 7-11
Philippines, that majority of their stores were open during the ECQ but they
would have to comply with the regulation of the LGU they are under, furthermore
they closed some branches especially those that are close to each other. This is
a threat to 7-11 because the limited number of hours open (depending on the
LGU) and the temporary closing of some stores will affect their profits come the
end of the year.

B. Operating Environment
B.1 Opportunities

B.1.1. DENR honors environmental achievements

11 "ECO-FRIENDLY" BUSINESSES, INDIVIDUALS are recognized by

Philippine organizations including the DENR. The Philippine Environment
Partnership Program (PEPP) and the Philippine Chiller Energy Efficiency Project
(PCEEP) of the Department of Environment and Natural Resources (DENR)
have both awarded recognition to nine commercial businesses and two
individuals for their excellent performance (PEPP). Awards like this help PSC
build a solid reputation in the industry, which is excellent for business.
B.1.2. Promote private brands more aggressively

This is a chance to enhance the attraction of the brand associated with 7-

11 Eleven. The number of Philippines Seven Corporation’s devoted consumers
may rise as a result of successful marketing of these private brands, in addition
to your business's financial line. For instance, Philippines Seven Corporation
uses social media sites to distribute information on its proprietary brands, like
Slurpees and Big Bites. They were considered by the researchers as a superior
reaction to this opportunity because of the great prominence of their websites.

B.1.3. New markets are opening as a result of government settlement

7-Eleven now has the opportunity to enter a brand-new, rapidly

expanding market thanks to the implementation of the most recent generation
preferred and government free exchange agreement.

B.1.4. New markets are opening as a result of government settlement

Due to the additional opportunities, all participants in the industry will

have access to some form of stakes or opportunities. It offers 7-Eleven a
fantastic chance to maintain its performance in the contemporary day and grow
its market share inside the new product category.

B.1.5. New technology

7-Eleven has the chance to use a distinct pricing approach in the new
market thanks to the new technology. It will allow the business to attract new
clients with various value-oriented offerings while retaining its existing ones with
excellent service.

B.1.6. Additional clients from internet channel

The business has made significant financial investments into the web
platform over the last few years. With this investment, 7-Eleven now has access
to new sales channels. The business may take advantage of this potential in the
 coming years by employing big data analytics to better understand its customers
and meet their demands.

B.1.7. Shareholders' Actions

Due to the idea that people's purchasing power would improve as their
disposable income increased, this is in relation to the prior opportunity.
 Philippines Seven Corporation received a score of 3.0 for this chance. As a result
of the TRAIN Law's passage, the corporation will raise the prices of the majority
of goods. Additionally, customers have a reputation for finding 7/11's pricing
strategy to be expensive. Given the market's present purchasing power,
Philippines Seven Corporation may choose to execute this. The price hike may,
however, somehow come at the expense of earnings potential.

B.1.8. Loyal coin

Customers can earn reward points from loyalty programs like CLiQQ
Rewards in addition to exclusive access to certain services, including Wi-Fi. In
comparison to the greatest loyalty rewards in the nation, Loyal Coin has the full
benefit of being the first mover in this market. Not just in the Philippines but
internationally, we have witnessed a remarkable rise in mobile smart phones and
the usage of technology. It is the first blockchain-based digital loyalty reward that
you may use both locally and internationally, outside of the Philippines. It offers a
broader range of uses, a more satisfying customer experience, and a motivation
for customers to stick with the companies. The utilization of this block chain could
be advantageous to Philippines Seven Corporation. Its acceptance,
nevertheless, had not yet been formally put into effect. It is accepted at a variety
of Philippine stores as well as abroad. Approximately 2 million clients have
already been serviced by this as of the time of writing in the following Philippine
businesses, including Petron, Bench, FamilyMart, and other names.
 B.2 Threats

B.2.1. Price
Due to their price sensitivity, most consumers are less devoted to the 7-
ELEVEN brands and opt to buy cheaper goods

B.2.2. Increasing competitor in the retail sector

The Japanese colossus LAWSON has been planning market entry into the
Philippines' c-sector for some time. There were several LAWSON stores in the
Philippines nowadays. Due of potential future expansions, the researchers
regard this as a danger to Philippines Seven Corporation. Additionally, Circle K
opened last year, while FamilyMart and Robinsons Retailed-owned domestic
business Ministop both want to grow their footprint, according to recent searches.
Additionally, "Mini-marts" are popular as retail behemoths compete for a larger
market share. In the upcoming years, 7-Eleven will experience unheard-of levels
of competition.

B.2.3. Tax Reform for Acceleration and Inclusion (TRAIN) Law

It is the first part of the President Duterte administration's comprehensive

tax reform program (CTRP), which aims to make the tax system simpler, fairer,
and more effective by addressing a number of flaws. Due to the fact that some
commodity prices may rise, this is one of the Philippines Seven Corporation’s
threats. Consumer behavior might be badly impacted by this. For example, this
may lead to more prospective switchers.

B.2.4. Unusual advancement in product delivery

The company has improved its products over the years, but customers
frequently respond to the advancement by utilizing various players. Second, the
timing of the delivery of the newest products isn't always consistent, which causes
excessive and irregular fluctuations in the revenue range over time.
B.2.5. Security

The Philippine Seven Corporation's line of work makes it a constant target

for theft and armed robberies. The company has undoubtedly installed a variety
of security systems throughout the globe, including cameras, safes, window
barriers, and so on. Generally speaking, the Philippines has a sizable market for
safety and security goods. Many airports and other facilities in the Philippines
require security enhancements. Electronic monitoring is becoming more and
more popular for use in deterring and preventing crime. Another crucial factor to
take into account when it comes to security concerns is shoplifting. The number
of theft cases in the Philippines is increasing, according to the Philippine
publication Manila Bulletin. Like other establishments, 7-Eleven will continue to
face the threat of small-scale theft and larceny. These shops can have a small
staff and a tight budget, which gives certain customers the chance to shoplift
sometimes. Similar to the security risk mentioned earlier, video cameras might be
useful here.

B.2.6. Urban market saturation and rural market stagnation

This tendency presents a constant challenge for 7 Eleven in the retail

(grocery) market. The sluggish rate of product uptake in rural markets is one of
the causes. Due to the great distances and inadequate infrastructure, serving
rural clients is more expensive for 7 Eleven than serving urban ones.

B.2.7. High rental costs

The requirement to place 7-Eleven stores in extremely handy locations

old definitely result in increased leasing prices. Due to their greater operational
cost structure, they will have to use a premium pricing strategy. Some customers
are content to pay a little bit more for speed and convenience, whereas other
price-conscious customers are more sensitive to pricing. 

During the first quarter of 2022, the monthly cost of renting office space in
Metro Manila in the Philippines was 1,045 Philippine pesos per square meter.
The minimum requirement of 7-eleven was 130 square meters. While in nearby
 provinces like Laguna and Cavite, the monthly rent for an office ranges from PhP
10,000 to PhP 424,000.

B.2.8. Seasonal

Because the demand for the highly profitable items is seasonal, any
unusual occurrence during the busiest time of the year might have a short- to
medium-term negative influence on the company's profitability.

C. Internal Environment
C.1 Strengths
C.1.1. Marketing

As of January 2020, 7-Eleven has over 70,200 stores all through the
world, which offers them a vast region and comfort advantage. As of December
2020, there are 2,978 7-Eleven shops within the country. A total of 1,610 of those
are franchise shops, and the closing 1,368 are company-owned. According to 7-
Eleven Philippines, its marketplace proportion within the neighborhood comfort
shop enterprise is round 30 percent as of 2020. Obviously, being a comfort store,
their number one gain to purchasers is that usually bought merchandise are
placed at close by shops. Therefore, more marketplace insurance through a
more variety of retailers will offer expanded comfort to greater purchasers.

C.1.2. Production/Operations
7/11 offers everything from on-the-by skip heat meals, drinks, snacks like
Busog meals, fried chicken and more. Aside from this, 7-Eleven moreover offers
e-services and bills-price facilities to their customers. This service allows you to
pay the Electric and Water bills, Loans, Insurance, and more. They are opened
for 24 hours a day and seven days a week.

C.1.3. Finance
Philippine Seven Corporation (PSC) president and chief executive officer
Jose Victor Paterno stated due to the fact only 20% to 30% of their network is
positioned in residential areas, he sees a “blue ocean opportunity” for 7-Eleven.
 This is a bonus to PSC, Paterno added, as lease is likewise less expensive in
comparison to business spaces.

C.1.4. Organization & Management

 7-Eleven is the biggest chain shop in any category, starting with about six shops
according to day someplace in the world. Originally, the enterprise was referred
to as The Southland Corporation (of Dallas, Texas) and became based in1927.
In the end it is called to 7-Eleven Inc.

C.1.5. Human Resources

The Company provides supplemental benefits or incentives to its
employees such as: retirement benefit plan, health card group life and accident
insurance plan, various employee programs and recognition of top performing
employees and service awards among others. 7-Eleven is a part of Seven & I
Holdings Co., Ltd. They spent under $100 million on advertising on digital, print,
and country-wide TV within the remaining yr. They spend money on top-class ad
devices and marketed on over 250 specific Media Properties in the remaining
year throughout a couple of media platforms. 7-Eleven finally advertised a brand
new product in June 2021. The Company offers supplemental benefits or
incentives to its personnel which include retirement gain plans, health card
organization lifestyles and accident insurance plans, various employee programs,
and identification of top-performing employees and service awards among
others.

C.1.6. Research & Development

Paterno stated the organization is now running on the capability

purchases of clients of their subsequent visit. He stated the organization is
presently running with some of facts agencies to assist them tool a synthetic
intelligence (AI) software with a purpose to useful resource the organization in
predicting buyers’ subsequent shopping for decision. “Basically, we’re identifying
AI. That’s in the last 3 years. Before, people thought this thing’s by no means
going to work. Now, have a take a observe Google Translate and appearance
how excellent it is. I haven't any doubt that it's going to begin identifying stuff like
what's the most beneficial assortment for every store, like what product have to
you convey in every store. How a lot of this product may be offered on a given
day given this weather,” he explained.
 C.1.7. Information Systems 

At 7-ELEVEN stores, every swipe of a barcode represents a chunk of

income transaction being stored in the massive database of the POS(Point of
Sale) gadget, which collects records from the seven million customers who store
at 7-ELEVEN each day. The POS gadget, which manages hundreds of products,
the processing of orders from stores, and the gathering and evaluation of each
day’s income data, is an critical device that enables the operation of 7-ELEVEN.
The new gadget updates instantaneously income and stock records hourly,
publishes climate forecasts 4 instances a day, and transfer consolidated product
records for multi-media presentation. This gadget has enabled us to control
records in a strategic manner and boom our productivity.

C.2 Weaknesses
C.2.1. Marketing
Even though the product is a success in terms of sale, its positioning and
unique selling proposition isn’t constantly actually defined which can reason the
attacks in this segment from the competition. Furthermore, Seven-Eleven has a
high margin. In other words, the products sold at outlets are a little more
expensive than the prices at supermarkets.

C.2.2. Production/Operations
One of the motives why the 7-Eleven’s inventory is excessive in
comparison to its competition is that 7-Eleven isn't always excellent at call for
forecasting accordingly finishing up retaining better stock each in-residence and
within the channel. 7-Eleven is a constraint of offering. You would possibly find
the product you want however you may have only small choices as 7-Eleven now
no longer offers all of the brands that humans want. Philippine Seven
Corporation suggested that it opened 174 new stores and closed 60 stores in
2020, ending the year with 2,978 7-Eleven convenience stores. The employer
stated the majority of the 7-Eleven stores are open 24/7, and the rest are open
throughout the daytime. Less than 7%of the stores are short-term closed.
C.2.3. Finance
In 2020, Philippine Seven Corporation noticed a internet loss of ₱419.7
million from a ₱1.44-billion earnings in 2019 after the economic system suffered
because of the COVID-19 pandemic. Despite posting internet losses final year,
Paterno stated the institution has a sturdy unfastened coins go with the drift of
₱1.2 billion. Paterno quoted, “We hope to move to profitability, not a big one but
it’s been improving as we pass through the pandemic.” “We believe we're better
prepared for today’s situation and tomorrow’s,” he added. According to the
company, the average number of customers per day at all stores has dropped by
41%.

C.2.4. Organization & Management

Not rather a hit at integrating corporations with the unique work culture.
Even though 7-Eleven is a hit at integrating small corporations it has its
proportion of failure to merge corporations which have distinctive culture. 7-11
has a excessive worker turnover rate. Even though 7-Eleven is well-known, a
number of the personnel turn out the task as running with 7-Eleven calls for them
to work in shift that's in the morning or at night, Moreover, most of the personnel
quit the jobs due to the fact they need to find a extra solid job as they take this as
a part-time job.

C.2.5. Human Resources

The Human Resources Team quotes 7-Eleven an F in assessment to

departments at corporations of comparable size. The human resources group
ranks their universal lifestyle 38/100 that is 18% decrease than the common
universal lifestyle score of 56/100 supplied through the whole company.7-
Eleven's human resources department has an immediate effect at the work
environment. Employees price their environment a C- and aren't so satisfied at 7-
Eleven.
C.2.6. Research & Development

Investment in Research and Development is below the fastest growing

game enthusiasts in the company. Even though 7-Eleven is spending above the
company not unusual place on Research and Development, it has now not been
able to compete with the principal game enthusiasts within the company in terms
of innovation. It has encountered a mature agency looking beforehand to bring
products based totally mostly on tested competencies within the marketplace.

C.2.7. Information Systems

Need more investment for brand new era. Given the dimensions of boom
and unique geographies, the organization is planning to increase into; 7-Eleven
wants to function extra money within the technology to mix the tactics for the
duration of the board. Right now, the investment in era is not at par with the
creativeness and prescient of the organization.
 D. External Factor Evaluation Matrix

Using the External Factor Evaluation Matrix, researchers examined the 7-

Eleven company's external environment. The results will be described in this
study and accurately indicate how Philippine Seven Corporation has performed
in terms of opportunities and threats.

The EFE table shows that 7-11 Company, with a weighted score of 1.72,
can leverage the opportunities. Philippine Seven Corporation also has the
potential to defend against threats in the sector because to its weighted score of
1.26. The justification for the data is provided in the entries that follow.
E. Internal Factor Evaluation Matrix

Researchers looked at the internal environment of the 7-Eleven

corporation using the Internal Factor Evaluation Matrix. The findings will be
discussed in this study and will clearly show the strengths and weaknesses of
Philippine Seven Corporation.
 According to the IFE table, 7-11 Company may take use of the a
forementioned strengths, earning a weighted score of 2.07. A result of its
weighted score of 1.42, Philippine Seven Corporation also has the capacity to
counteract industry weaknesses. In the entries that come after, the reason for the
aforementioned information is given.

F. Competitive Profile Matrix

Column1 Colu Colu Column4 Colu Column6 Colu Column8
 mn2 mn3 mn5 mn7
Minist
7-11 op
Key Success Weig Philip Philip Alfa
Factors ht pines pines mart
Scor Weighted Weighted Scor Weighted
e Score Score Score e Score
Innovation 0.25 3 0.75 3 0.75 3 0.75
Advertising 0.2 4 0.8 2 0.4 2 0.4
Brand Name 0.2 4 0.8 3 0.6 3 0.6
Product Quality 0.15 3 0.45 3 0.45 4 0.6
Customer Service 0.1 2 0.2 3 0.3 2 0.2
Price
Competitiveness 0.05 3 0.15 3 0.15 4 0.2
Technological
Competence 0.05 3 0.15 2 0.1 3 0.15
Total Score 3.3 2.75 2.9

The Competitive Profile Matrix of 7 eleven Philippines is a strategic

analysis that allows showing in such a way as to reveal relative strengths and
weaknesses. The 7-Eleven store is known for offering a one-stop location for
fulfilling its customer’s needs. The product line in the company’s marketing mix
can be divided into food and drinks for breakfast, lunch, evening snacks, dinner,
and late-night snacks. 7-Eleven stores keep the price of items as competitive as
other stores. The generic items include brands sold in every convenience store
like coffee, chips, bread, eggs, etc. But the pricing is a bit higher for its privately
labelled products like Slurpees, Big Gulp, etc. The reason for increased pricing
for its private-labeled products is simply because these products are liked by its
customers and are exclusively available at 7-Eleven stores only. Moreover, as
the store offers a one-stop shopping solution for all the needs of customers and
the time length (7 am to 11 pm and some stores are open for 24 hours also) at
which the store operates, the customer is happy paying some premium pricing
for the offering made by 7-eleven stores. This gives an insight into the marketing
mix pricing strategy of 7-Eleven stores. 7-Eleven stores started in Dallas, Texas,
in 1927, but by the 1950s, the stores were spread to Florida, Maryland, Virginia,
and Pennsylvania. In 1969 the company crossed international borders and
launched stores in Canada, and currently, the company has about 70,000+
stores spread across 17 countries. The company also provides its franchise to
 potential owners, which can be applied directly from the 7-Eleven website. To
better serve its customers, the 7-Eleven company has developed a 7-Eleven
mobile app that caters to the needs of internet-friendly customers. Through the
app, the 7-Eleven stores can better serve customers by delivering food, paying
bills online, giving reward points to customers, etc. 7-eleven stores follow an
Omni-channel approach for their promotional strategy, from digital promotion to
events to physical store site promotion. The 7-Eleven company is engaged in
enhancing its sales through a ‘shoulder’ campaign for its Slurpee product that
cited the product’s benefits of the product beyond just refreshment. The company
has also started celebrating 7-Eleven day as a promotion strategy to attract
customers to its stores. On this day, the 7-Eleven stores offer free Slurpee from
any of its stores. Also, the company started offering small Slurpee on fuel
purchases to get new customers. The company also offers gift cards, 7-Eleven
Universal Fleet Card, and Prepaid Cards to give special offers to its customers.
7-Eleven has also been engaged in events like Shelter Makeover Project, Unisel
Voice for Refugee, Slurpee Tasting Test, etc., to attract the audience and build
brand awareness. The company had a new advertising campaign launched in
2021, highlighting the brand’s evolution over the years.

G. Assumptions
       G.1. General Environment Stability

The general environment should be steady for 7-11. In terms of

sociocultural-demographics, modern day connection with the local delivery
service opens strong potential for 7-11. 7-11 will also use the ever-expanding
social media platforms to communicate with its customers more effectively, such
as advertising promotions and deals. They may also take advantage of social
media to identify market trends and benefit from them. Furthermore, because of
the relaxation of restrictions and the steady increase in foot traffic, 7-11 may
anticipate an increase in sales per shop, which will impact their SSSG or same
store sales growth.
       G.2. Industry Growth Prospects

From 2021 to 2026, USD 70.67 billion is predicted to expand from the
retail market share in the Philippines, with the market's growth velocity
accelerating at 11.68% of CAGR. According to a Fitch Solutions analysis, a full
recovery in the Philippines' consumer and retail sector is predicted only by 2022,
with traditional growth resuming in 2023, despite sluggish household spending in
2021 due to restrictions.

       G.3. Company's Competitive Position

7-Eleven is aggressively expanding its franchises. "Competition in

convenience stores is not about price war, it's about size war. You kill each other
over the location. It is all about trying to become the most convenient for
customers, that is where the battle is in the end," Paterno, CEO of Philippine
Seven Corp., said. Furthermore, with over 70,000 locations worldwide, 7-Eleven
has a significant location and convenience advantage. Obviously, the primary
benefit to customers of a convenience store is that commonly purchased goods
are available at nearby locations. As a result, more consumers will benefit from
increased market coverage via a greater number of outlets.

3. Problem Statement

Retailers must rely on innovation, technology, and strategic business

decisions in order to develop and remain relevant to the clients they have fought
so hard to win over. Therefore, the retail sector is extremely competitive; hence,
business executives that know their staff recognize that they need to stay in
touch with their clients. In order to maintain earned loyalty, introduce new
products and services, stimulate and fulfill experience, and produce measurable
expenditure and profit from each customer interaction, this is done
through particular activities and through a variety of channels. The digital
experience is now the cornerstone of any successful company or brand.
Customers want the majority of their products and services to meet them where
they live, work, and play in the digital world.

 Some 7-Eleven Products are not consistently available to all branches

 7-Eleven branches have poor inventory control
  Declining customer count due to new competition
 Low customer traffic during night hours
 Growing competitors
 Slow and not updated Information System

4. Alternative Courses of Action

A. Tows Matrix

B. Internal-External Matrix
Using the Internal-External Matrix, researchers are able to analyze the corporations'
current position of Internal and External Factors to further examine the alternative course of
action.
 According to the IE matrix, from the aforementioned weighted averages of Internal and
External Forces, 7-Eleven belongs to Cell IV meaning tactical and intensive strategies are more
suited for the corporation. PSC should concentrate on product creation, market penetration, and
market growth. A backward integration, forward integration, and horizontal integration should all
be taken into account from an operational standpoint.

C. Grand Strategy Matrix

D. Summary of Strategies
7-11 Philippines can be considered as a part of quadrant 4. 7-11 Philippines is in a good
competitive position, but the market of 7-11 Philippines is in a slow state or in a state of decline.
7-11 should focus on innovation and diversification of products and services compared to other
competitors. Especially 7-11 Philippines having the resources to do this they should opt to
separate themselves from competitors if they want to become the best option in the industry.
5. Recommended Alternative and Action Plan

A. Quantitative Strategic Planning Matrix

Market Penetration Product Development
Key Strategic Factors Weight Rating Weighted Rating Weighted Score
Score
Strengths
S1 Marketing 0.04 4 0.16 4 0.16
S2 Production/Operations 0.1 3 0.3 3 0.3
S3 Finance 0.07 3 0.21 4 0.28
S4 Organization & 0.12 3 0.36 3 0.36
Management
S5 Human Resources 0.08 3 0.24 3 0.24
S6 Research & Development 0.06 4 0.24 4 0.24
S7 Information System 0.09 4 0.36 4 0.36
Weaknesses
W1 Marketing 0.04 4 0.16 4 0.16
W2 Production/Operations 0.05 3 0.15 3 0.15
W3 Finance 0.07 4 0.28 4 0.28
W4Organization & 0.04 3 0.12 3 0.12
Management
W5 Human Resources 0.06 3 0.18 3 0.18
W6 Research & Development 0.08 4 0.32 4 0.32
W7 Information System 0.1 3 0.3 4 0.4
SUB- TOTAL 3.38 3.55

Opportunities
O1 DENR honors 0.02 4 0.08 4 0.08
environmental achievements
O2 Promote private brands 0.06 4 0.24 4 0.24
more aggressively
O3 New markets are opening 0.03 3 0.09 3 0.09
as a result of government
settlement
O4 New regulations for the 0.07 3 0.21 3 0.21
environment
O5 New technology 0.1 3 0.3 4 0.4
O6 Additional clients from the 0.09 4 0.36 4 0.36
internet channel
O7 Urban market saturation 0.06 3 0.18 3 0.18
and rural market stagnation
O8 Loyal Coin 0.08 3 0.24 3 0.24
Threats
T1 Price 0.1 4 0.4 4 0.4
T2 Increasing competition in 0.09 3 0.27 3 0.27
the retail sector
T3 Tax Reform for 0.04 2 0.08 3 0.12
Acceleration and Inclusion
(TRAIN) Law
 T4 Unusual advancement in 0.02 2 0.04 3 0.06
product delivery
T5 Security 0.08 3 0.24 3 0.24
T6 Urban market saturation 0.03 3 0.09 3 0.09
and rural market stagnation
T7 High rental costs 0.06 3 0.18 3 0.18
T8 Seasonal 0.07 3 0.21 3 0.21
SUB- TOTAL 1 3.21 3.37
OVERALL SCORE 2 6.59 6.92

The QSPM findings show that Alternative Courses of Action (ACA) - Product
Development earned the highest total weighted score, indicating that this is the right approach
that might significantly address the recognized major problems.

B. Action Plan
C. Financial Projections
C.1. Sales Forecast

C.2. Income Statement Forecast

C.3. Balance Sheet forecast
C.4. Cash Flow forecast
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