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7-Eleven: Expanding the brand through acquisition - Introduction

Introduction

7-Eleven is Australia’s leading convenience retailer operating more than 650 stores along the eastern seaboard of Australia. As a privately-owned Australian company, 7-Eleven Stores Pty Ltd develops and franchises stores under license from 7-Eleven Inc, USA. All of its stores are owned by franchisees and governed by a franchise model. Franchisees are responsible for store operations, merchandising, employees, inventory management and other controls, whereas head office is responsible for real estate sites, accounting, equipment, utilities, branding and promotion and, of course, managing the supply chain.

 

7 eleven - Expanding the brand through acquisition

 

7-Eleven Australia, home of the iconic Slurpee, has been embarking on an ongoing strategic process of modernisation and change in order to remain competitive in the constantly evolving convenience retailing market segment. One of the key commercial pressures facing the company has been the move of the retail giants Woolworths and Coles (Wesfarmers) into the petrol retailing market segment.

 

 

In 2010, 7-Eleven Australia undertook a major strategic change by acquiring 295 outlets from Strasburger Enterprises (Properties), the retail subsidiary of Mobil Oil Australia which operated stores using Mobil and Quix branding. This horizontal integration involved 7-Eleven Australia taking over not only all of the stores (and their operators) but also all employees of Strasburger Enterprises (Properties). Corporate mergers and acquisitions are subject to approval by the Australian Competition and Consumer Commission (ACCC) as part ofregulations to limit unfair market power. The acquisition was approved; however the company had to divest three outlets. 7-Eleven Australia also on-sold 30 South Australian stores to another corporation as they did not have an operational base in that state.

 

One of the key objectives of this acquisition was for 7-Eleven Australia to become the market leader in convenience retailing throughout the eastern states of Australia. The acquisition increased the number of 7-Eleven outlets by 62 percent. As a result the company expects the number of transactions to grow by 75 percent and sales growth in

excess of 50 percent.

 

The acquisition sees 7-Eleven Australia grow to be Australia’s third largest privately-owned company (excluding superannuation funds). The challenges presented by this acquisition are complex and ongoing, and as such, they needed to establish an effective change management process to properly manage this major strategic change in a timely fashion.

 

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Associated with:
Learning Area(s):
  • Business Environment | Mission and Objectives
  • Business Environment | Stakeholders
  • Business Environment | The external environment
  • Business Environment | Types of large organisations
  • Business Structure and Organisation | Franchising
  • Change Management | Change issues for business
  • Change Management | Managing change effectively
  • Change Management | Sources of change
  • Change Management | Strategic planning
  • Communication | Effective communication models
  • Communication | Technology and communication
  • Employee Relations | Proactive employee relations
  • Human Resource Management | Employee Motivation
  • Management Skills | Communication
  • Management Skills | Managing in a team environment
  • Management Skills | Role of leadership
  • Management Skills | Role of planning
  • Marketing | Product development
  • Operations Management | Facilities design and layout
  • Operations Management | High-end technology based operations systems
  • Project management | The project lifecycle
From: Edition 7

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