Case 1: Seven Eleven Japan

Identify the major obstacles to e-commerce in Japan

• Japanese refuse to use Credit Card which makes the payment of e-commerce difficult as Japan had traditionally been a cash-based society, the application of bank notes is unusual.
• Japan had the world’s highest combined telecommunication and ISP fees.
• Consumers were also doubtful about receiving their parcels from on-line stores, either due to mailing errors or non-fulfillment on the part of the stores.
• They prefer to have touch and feel their goods and pay for them in instant, other than buy it via only visual sensation though internet.
• The convenience store is too nearby; they can easily reach the shop and buy.
• They and socialize with friends and look at the latest fashion accessories in the store
• The don’t like to wait for the delivery
• The coverage of the internet in Japan is not so popular, only 20 % of the Japanese have personal computer.
• They can have advice in the stores face to face from the salesperson.
• Connection charges is high.

        Describe the proposed 7dream.com business model 

• Began contacting the heads of several major Japanese companies, which included Sony Corp., Sony Marketing (Japan) Inc., NEC Corp., Nomura Research Institute, Mitsui & Co. Ltd., Japan Travel Bureau Ltd. and Kinotrope Inc., to convey his vision and to persuade them to join him into bringing e-commerce to Japanese consumers in a big way ,aimed at becoming the largest B2C e-commerce site in Japan and help Seven-Eleven Japan to realize   its goal of becoming an on-line Japanese shopping behemoth.(Enhance the resources and reduces the risk, IT Support)
• 7dream.com to offer services in eight content areas: travel; music; photographs; Merchandise, gifts and mobile phones; tickets; books; car-related items; and information.
  This diverse range of merchandise was specially aimed at the buying pattern of most Japanese consumers and to complement the range of goods offered in the 7-Eleven stores.
  (Avoid Contradiction and ease of handling)
• Target group : youngsters.
  They had taken to the Internet most enthusiastically. these characteristics made this group an ideal target to market an on-line shopping site.
  (High acceptance of youngsters, get popular in a partial and potential groups and spread out to the whole society)
• Payment at a 7-Eleven store" as their payment method. Payment slips with bar codes would then be printed out from the customers' printers OR payment reference number to the cashier at the 7-Eleven store.
  (Adapt to the Japanese traditional buying behavior)
• Customers could choose to have their orders delivered to their home or other delivery address  or pick up at the stores.
  (Adapt to the Japanese traditional buying behavior)
• Marketing
  One of the channels under consideration was Internet-enabled multimedia kiosks.
  -->Enable consumers who did not wish to connect to the Internet at home, or did not have
  Personal computers with Internet access, to access the full services of 7dream.com.
  -->Suzuki was also looking ahead to a wireless capability. In Japan, nearly six million of Japan's 17.5 million Internet users, a full 34 per cent, were accessing the Web via Internet-enabled Cellular phones.
  (Solve the problem of the low coverage of the personal computer and offering the opportunities to accessing the internet (7 dream.com))

How does 7dream.com define and differentiates its offerings from its traditional model?

• 7dream.com differentiates its offerings by utilize the existing logistic system and network to lower shipping and handling cost.
• 7dream.com offer service base on technical expertise and industry knowledge.
• 7dream.com offer services in eight content areas: travel; music; photographs; merchandise, gifts and mobile phones; tickets; books; car-related items; and information.
  
  
• Suzuki planned to give customers of 7dream.com the option of paying for their on-line purchases at a 7-Eleven store of their choice.
  
  
• After making a purchase at the 7dream.com Website, customers could select "Payment at a 7-Eleven store" as their payment method. Payment slips with bar codes would then be printed out from the customers' printers. Customers could then visit any 7-Eleven store in Japan with these slips to make their payments. Customers without printers could just state their assigned payment reference number to the cashier at the 7-Eleven store.
  
  
• Also, the products to be offered were especially chosen for their ease of handling - if they were not viewable on screen or downloadable, they were small-sized. This was due to Suzuki's plans to utilize the existing Seven-Eleven Japan delivery system as 7dream.com's end-fulfillment system.
  
  
• 7dream.com would utilize the existing logistics system that Seven-Eleven Japan employed for distribution of goods to its network of convenience stores. As the delivery system was already in place, orders on 7dream.com's site would probably only be charged a minimal cost, which would be significantly lower than the shipping and handling charges levied by other e-commerce companies.
  
  
• Using the information system, Seven-Eleven Japan was able to provide its stores with useful, easy-to-use data and visual information, enabling reductions in missed sales opportunities and inventory write-offs through precise item-by-item management.

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

 Obstacles                                                       Resolution

1. Japanese refuse to use Credit Card which makes the payment of e-commerce difficult as Japan had traditionally been a cash-based society, the application of bank notes is unusual. 2. Japan had the world’s highest combined telecommunication and ISP fees. Connection charges is high 3. Consumers were also doubtful about receiving their parcels from on-line stores, either due to mailing errors or non-fulfillment on the part of the stores. 4. They prefer to have touch and feel their goods and pay for them in instant, other than buy it via only visual sensation though internet. 5. The convenience store is too nearby; they can easily reach the shop and buy. 6. The don’t like to wait for the delivery 7. The coverage of the internet in Jap is not so popular, only 20 % of the Japs have personal computer.

1. They can pay the fee by using cash or debit cards in the stores. 2. Government policy – create competition by splitting the telecom giant NTT into 3 companies 3. The customers can pick up the products at the convenient stores 4. 7dream.com find the big companies as her business partners 5. 7dream.com Differentiate the products which is not available at the physical shop 6.  They can pick up at the convenient stores 7. They have introduced multimedia KIOSKS, that customers could print the bar-code slips at the stores. Although Japanese don’t have PC at home, they could use the cell phones to surf 7dream.com which are very convenient.

Other factors:

1. Low operation  cost - leverage of the existing distribution system 
The products are directly deliver to the  stores from supplier warehouses (order fulfillment)

2. Wider product range

3. Cooperate with industry expertise .