1 Introduction 2 Theory and Research Methodology

Notes

1 Introduction

1. www.thecqi.org/knowledge-hub/Resources/Factsheets/ Continual-improvement 2. www.encyclopedia.com/doc/1G1-12150099.html 3. Industry Week (2008/03/05), ‘Everybody’s jumping on the lean bandwagon, but many are being taken for a ride.’ 4. Mellor et al. (2000), for instance, find that most continuous improvement programs are restricted to the manufacturing sector and not used in other areas. See also Hyland et al. (2003) 5. Japan Post annual report www.japanpost.jp/en/group/past/2004/pdf/ jp/01.pdf 6. Toyota official website www.toyota.co.jp/en/vision/production_ system/just.html 7. Excluding area franchise firms in Asian countries. 8. For detailed work on Southland’s history see Sparks (1995) and Kawabe (2003: 281 et seq.). 9. For instance, sophisticated stocking solutions are offered by a Texas-based subsidiary of NEC, which originally helped developing the system for Seven– Eleven Japan. See Costello (2001). 10. Sankei Shinbun (2008/08/06), ‘J¯oki no konbini uriagedaka, hyakkaten uemawaru’ (Convenience store sales top department stores in the first half-year).

2 Theory and research methodology

1. A monthly issued magazine for business professionals that also includes interviews with CEOs, reviews by business consultants and analytical reports. 2. Some examples are presented in Kawabe (1995). 3. Schreyögg and Kliesch-Eberl (2007: 919) provide a good overview by classi- fying the various suggestions under three different groups, that is the radical dynamization approach, the integrative approach and the innovation routine approach. 4. Front-line employees stand for the lowest hierarchical level within the organization with direct contact to customers who have ﬁrst-hand knowledge of customer reactions (Ishikawa, 1985: 137). Although store owners are legally not employees of the CS chain due to franchise regulations, they are referred to as front-line staff hereafter to highlight their role in capturing improvement ideas. 5. For instance, quality control programmes can include an iterative four- step problem-solving process for business process improvement called PDCA (plan–do–check–act). The philosophy of total quality control (TQC), a key

178 Notes 179

characteristic of lean systems, is discussed in Ishikawa (1985); Imai (1986); Nakamura (1993). 6. Some authors use different terms such as ‘Logistics Marketing System’ in Morita (2007: 235), but they generally refer to the same concept. 7. Japan Times (2009/09/30), ‘Store managers sue 7–11 over discount sales ban’, http://search.japantimes.co.jp/cgi-bin/nn20090930a3.html 8. Interview with Lawson CEO, Nikkei Weekly (2007/08/20), ‘Lawson chief thinking outside the format’. 9. Nikkei (2008/12/09), ‘Convenience stores lift sales by drawing in homemakers, elderly’. 10. Reuters (2009/01/20), ‘Japan convenience store post strong growth in 2008’, http://uk.reuters.com/article/idUKT34766720090120 11. (2010/05/24), ‘konbiniensu sutoa no gy¯omukaizen jirei’ (example of convenience store process improvement), www.keieikikaku-shitsu.com/ report/89/ 12. Adjustment for a short-term jump in tobacco sales in 2008 resulted from the introduction of new cigarette machines requiring identification cards which prompted customers to buy cigarettes at CS instead. 13. Financial Chronicle online article (2008/12/19), ‘Convenience stores in Japan gain from recession’. 14. Kawabe (2003: 281–342) has a complete chapter on the Japanese Seven– Eleven/Southland corporation relationship. 15. Stickiness can be defined as the incremental expenditure for a unit to transfer information to a specific site in a form usable by a given information seeker. See Ogawa (1998: 778).

3 Historical overview and the CS system

1. For a chronological overview, see also Chen (2004). 2. The manual was created by the Distribution Economics Institute of Japan (Ry¯uts¯uKeizai Kenky¯ujo)in 1972 (107 pages). 3. Nikkei Ryuts¯ u¯ Shinbun (1975/04/21), ‘Konbiniensu sutoa chakujitsu ni nobiru’ (Steady growth of convenience stores). 4. See also Nikkei Research Inc. (2005/05), ‘Study concerning Japan’s Experience of Foreign Direct Investment Liberalization’ by the Ministry of Finance Japan, www.mof.go.jp/international_policy/research/fy2005tyousa/ 1705tyokusetu_1.pdf 5. See Kawabe (2003: 129). A voluntary chain is basically deﬁned as a non- contractual group working together in order to achieve economies of scale. 6. FamilyMart company report (2006) www.family.co.jp/company/eco/ report/pdf/report_06_04.pdf 7. An excellent overview on the history of convenience stores in the US is provided by Kawabe (2003). 8. Source: Nihon Keizai Shinbun Ry¯uts¯uKeizai no Tebiki (1979 issue: 323, 326). 9. This deﬁnition is relevant for the DEA analysis presented in this book which is based on the dataset by METI. 10. See, for instance, FamilyMart annual report (2007), www.family.co.jp/ english/investor_relations/annual_report/pdf/07/07_e_08_b. pdf 180 Notes

11. The location where transactions of electronic cash registers occur. 12. Seven–Eleven Japan Co. (2003: 22 et seq.) has details on its product line-up. 13. Details available in an official document on store operations by Seven & i Holdings Co., Ltd., www.7andi.com/en/ir/pdf/corporate/p24_33.pdf 14. Nikkei (2008/03/26), ‘Konbini kaji daik¯os¯abisu shinshutsu’ (Convenience stores launching homemaker service). 15. Nikkei Weekly (2002/08/12:11), ‘Convenience stores peddle financial services’. 16. Although historically wholesalers have taken a leading role by providing the necessary financial or trading capital, manufacturers eventually overtook leadership in the 1960s, backed up by accumulated production capital. See Kuwahara (1997: 111). 17. An OFC is a field consultant responsible for several stores in a specific area. 18. See also overview available on Seven–Eleven Japan’s official website, www.sej.co.jp/corp/aboutsej/info_03.html 19. Details available on Seven–Eleven Japan’s official website, www.sej.co.jp/ corp/news/2006/pdf/052502.pdf 20. See Lawson’s 2000 interim report, www.lawson.co.jp/company/ir/ library/pdf/value_book/vb_26c.pdf 21. See Ogawa (2002: 584) for a detailed explanation. 22. For a detailed overview see Table 2 in Naruo and Toma (2007: 391).

4 New challenges in a dynamic environment

1. Asahi News Service (2003/09/02), ‘Convenience stores falling to earth from retail heaven’. 2. According to JFA konbiniensu sutoa tokei¯ chosa¯ nenkan shukei¯ (annual convenience store statistical summary report) (2009), www.jfa-fc.or.jp/misc/ static/pdf/2009cvs_year.pdf 3. Nikkei Marketing Journal (2008: 45). 4. Nikkei Weekly (2008/08/25/). 5. According to the METI research paper, ky¯os¯otoky¯od¯o no naka de shakai to tomo ni shinka suru konbini (convenience store’s evolution together with the Japanese society through competition and cooperation), www.meti.go.jp/press/20090420007/20090420007-3.pdf, p. 6. 6. Existing stores are commonly deﬁned as stores which existed at least one year before the observed period. 7. Nikkei Financial Daily (2000/02/23), ‘Stock in focus: FamilyMart’. 8. Asahi News Service (2003/09/02), ‘Convenience stores falling to earth from retail heaven’. 9. Nikkei Weekly (2008/03/17), ‘Seven & i chief sees merger synergies still on their way’. 10. Nikkei Business (2007/05/28). 11. Nikkei (2000/07/26), ‘Stock market gives Lawson IPO the cold shoulder’. 12. See JFA convenience store statistical research, www.jfa-fc.or.jp 13. Nikkei handbook of distribution and marketing (2002: 110). 14. See, for instance, CAWW Magazine (The Center for the Advancement of Work- ing Women) (2003/08, Vol. 13: 2 et seq.), ‘The Current Status of Japanese Working Women and Business Startup by Women’. Notes 181

15. According to National Institute of Population and Social Security Research, www.ipss.go.jp 16. Nikkei (2002/11/06), ‘Convenience stores target more products, services at older consumers’. 17. Nikkei (2008/12/09), ‘Convenience stores lift sales by drawing in homemakers, elderly’. 18. Gekkan Conbini magazine (2005/07/25). 19. The survey is published by the Research Institute of Industry and Regional Economy (Nikkei sangyo¯ chiiki kenkyujo¯ ). 20. A model that assesses the strengths, weaknesses, opportunities, and threats of an organization. 21. Datamonitor Seven–Eleven Japan Co., Ltd. SWOT analysis (2007: 8). 22. Kim (2001: 29) refers to the first attempts of starting price discounts in the 1990s. 23. Nikkei Marketing Journal (2002: 111). 24. Japan Today (2007/12/17). 25. Gekkan Verdad magazine (2007/02). 26. Nikkei (2008/04/16), ‘Lawson to pay Y160 yen annual dividend over 3 years’. 27. Joffe (2003: 116 et seq.) provides a comparative overview of leading CS firms’ e-business. 28. Nikkei Weekly (2001/08/27), ‘Convenience stores find e-commerce slow to grow’. 29. This section is primarily based on an article by an attorney published in Mainichi shinbun (2006/02/26), ‘Konbini wa haiki sh¯ohin keigen wo’ (Convenience stores to reduce items for disposal). See also (2005/06/29), ‘Losu ch¯ajimondai ni tsuite’ (On the loss charge problem), www.ver-law.ne.jp/franchise_sunkus.html 30. Nikkei Marketing Journal (2006: 109). 31. Nikkei handbook of distribution and marketing (2004: 276 et seq.). 32. 1999 values have been estimated by adjusting each entity’s share of part-time workers in the 1997 dataset of Matsuura and Motohashi (2005) using the aggregated value of the ‘1999 Establishment and Enterprise Census’ by the Ministry of Internal Affairs and Communications. 33. (2006/05), ‘Kiro ni tatsu konbini gy¯okai,aratana seich¯ono gend¯oryoku wa mitsukaruka’ (Convenience stores at the crossroads, can they find a new driving force for growth?), www.tbr.co.jp/pdf/sensor/sen_a009.pdf 34. Note that results are discussed here in the same order as presented in the survey except for question 2 which is discussed in the last section. 35. Statements have been formulated according to the decision area subcategories as presented in Table 2 of Anand et al. (2009: 450). 36. In the following analysis, a statement is considered to be accurate if the respondent marked 1 or 2, and inaccurate if the respondent marked 4 or 5. A grading of 3 means that the respondent was indifferent. 37. This is consistent with the view of Gibson and Birkinshaw (2004). 38. Note that this question is similar to question 4; however the focus in this section is on the sequence of innovation/improvement measures. 182 Notes

5 New developments in recent years

1. Note that ‘entry’ and ‘exit’ is the ratio of entries and exits to total number of establishments in previous survey. 2. Nikkei handbook of distribution and marketing (2002: 9). 3. Nikkei handbook of distribution and marketing (2004: 269). 4. Nikkei BP, 2008/07/05, ‘Konbiniensu sutoa wa kakushinsei wo modoseruka’ (Can convenience stores regain innovation?). 5. Nikkei, 2007/10/11, ‘L¯osonto Famil¯iM, shutten k¯oritsude eigy¯osaik¯oeki’ (Lawson and FamilyMart, highest operating income through effective store openings). 6. Wall Street Journal Japan online, 2008/08/19. 7. Nikkei Marketing Journal (2008: 233). 8. Nikkei handbook of distribution and marketing (2003: 269). 9. Nikkei handbook of distribution and marketing (2004: 36). 10. The Nikkei Shohi¯ Mainingu Magazine has a special report on train-station outlets (2008/03, No. 34: 14 et seq.), ‘Ekinaka shisetsu wa konbini ga shuyaku ni’ (Convenience stores take leading role among train station facilities). 11. Nikkei Weekly, 2002/08/05, ‘Unusual locations attract chain-store operators’. 12. See, for instance, stores in hotels co-managed by FamilyMart and the hotel firm Fujita Kank¯oInc. 13. Nikkei handbook of distribution and marketing (2003: 264 et seq.). 14. Nikkei Marketing Journal (2007: 248). 15. More detailed information is available in the Popular Inc. presentation file (2008/02), ‘dai 33 ki chukan¯ kessan gaiyo¯’ (2008/02 33rd mid-term earnings outline), www.poplar-cvs.co.jp/ir/tool/mt-pdf/33a_activity.pdf 16. Nikkei Marketing Journal (2005: 261). 17. Nikkei BP special (2005/09): ‘Realtime retail case study – Shop 99’ and Nikkei handbook of distribution and marketing (2004: 60 et seq.). 18. Japan Consumer Marketing Research Institute (2006/02), ‘seich¯odonka de shij¯oha kusakariba ni’ (As economic growth slows down, many try to ben- efit from the market), http://www.jmrlsi.co.jp/menu/report/2006/ economist0602_01.html 19. Gekkan Conbini magazine (2006/02: 46). 20. See also Nikkei Marketing Journal (2005: 261 et seq.). 21. Nikkei Marketing Journal (2008). 22. Nikkei Business (2008/11/03: 80), interview with Lawson’s CEO Niinami Takeshi. 23. Nikkei Marketing Journal (2007: 67). 24. For a more detailed description of divestiture possibilities, see Marutschke (2007). 25. In this chapter, several descriptions are extended with statements found in company data. 26. The whole translated sample is available upon request. 27. Nikkei BP (2008/07/05), Konbiniensu sutoa wa kakushinsei wo modoseruka (Can convenience stores regain innovation?). Notes 183

28. Nikkei Marketing Journal (2005); see also Figure 4.1. 29. Nikkei Weekly (2002/08/05), ‘Convenience stores hit growth wall–weakening sales inhibit chains from planning aggressive expansion’. 30. Nikkei Weekly (2002/08/05). 31. According to FamilyMart company statement. 32. An area franchise, for instance, is an independent contractor with rights to sell and support franchisees in association with a master licence. 33. There are also strategic alliances that include capital tie-ups such as the agreement between FamilyMart and NTT DoCoMo in 2007. See NTT DoCoMo press release (2007/05/28), www.nttdocomo.com/pr/2007/001344.html 34. Nikkei handbook of distribution and marketing (2004: 267). 35. Gekkan Conbini magazine (2004/01: 114). 36. Nikkei Marketing Journal (2005: 271). 37. Seven&i Holdings corporate outline 2007. 38. Nikkei Weekly (2003/10/27: 36), ‘Convenience stores suppliers boosting tie- ups’. 39. Private-sector competition has substantially increased after the government partially privatized postal service in 2002. 40. Asahi shinbun (2008/02/13), ‘Nihon Y¯usei– Lawson no teikei, 800 kyoku ni konbini shutten 3 nen keikaku’ (Cooperation between Japan postal services and Lawson–a3year plan to open CS in 800 stations). 41. Nikkei (2008/02/12), ‘Japan Post Holdings, Lawson to form comprehensive tie-up’. 42. Nikkei Weekly (2008/02/18). 43. Japan Today (2009/08/07), ‘Japan Post opens 1st directly run convenience store’. 44. Business Spectator (2008/09/01), ‘Matsumotokiyoshi, convenience stores in talks’. 45. Official announcement Lawson website, www.lawson.co.jp/ company/e/news/135.html 46. Nikkei Weekly (2003/10/27), ‘Conbini suppliers boosting tie-ups’. 47. According to official announcement in October 2007, http:// markezine.jp/article/detail/1978 48. Nikkei (2003/05/07), ‘Three F, FamilyMart in joint shipping arrangement’. 49. See the official website of the Nagano prefecture, www.pref.nagano.jp/ soumu/hisho/bukaigi/20070920siryo5.pdf 50. Nikkei Marketing Journal (2006: 108) and Nikkei (2006/05/18), ‘Lawson, am/pm, FamilyMart seek growth via Corp Franchisees’. 51. Nikkei Marketing Journal (2006: 112). 52. Gekkan Conbini magazine (2004/02:45). 53. Gekkan Conbini magazine (2004/02:45). 54. Gekkan Conbini magazine (2005/10:90 et seq.). 55. Nikkei Veritas (2007/02), ‘Seven–Eleven Japan – Kameiten tairy¯odattai no kiki’ (Seven–Eleven Japan – the crisis of the withdrawal of many member stores). 56. The cases also provides findings from three interviews with key people in the respective firms’ headquarters. 57. According to Thomson Reuters business description. 184 Notes

58. Index is listed under the 33 industry classifications of Tokyo Stock Exchange, compiled by department stores, CS and supermarkets. 59. CEO investor message (2005/04/13), www.lawson.co.jp/company/ir/ message/backnumber/050413.html 60. In general, cigarette sales jumped at many CS chains because of the introduction of the ‘Taspo system’, a mandatory age-verification card for cigarette vending machines, prompting many customers to buy cigarettes at CS instead. 61. Nikkei (2009/01/09), ‘Lawson’s March–Nov net profit surges 23 per cent to record Y23.1 bn’. 62. Lawson presentation file (2001), www.lawson.co.jp/company/ir/ library/pdf/presentation/ps_2001.pdf 63. Source: Lawson fiscal earnings presentation file (2004), www.lawson.co. jp/company/e/ir/library/pdf/presentation/ps_2004_e.pdf 64. Lawson company data (2002), www.lawson.co.jp/company/ir/ library/pdf/presentation/ps_2002.pdf 65. Lawson official announcement, www.lawson.co.jp/company/activity/ program/pdf/2004/houkoku2004_05.pdf 66. Gekkan Conbini magazine (2004/06: 72). 67. RIETI website (2006/01/23), ‘L¯oson no ch¯osen’ (Lawson’s challenge), www.rieti.go.jp/jp/events/bbl/06012301.html 68. Single-market price of each product regardless of the store’s location. 69. RIETI website (2006/01/23), ‘L¯oson no ch¯osen’ (Lawson’s challenge), www.rieti.go.jp/jp/events/bbl/06012301.html 70. Gekkan Conbini magazine (2006/08: 26). 71. Source: Nikkei handbook of distribution and marketing (2003: 75 et seq.). 72. Gekkan Conbini magazine (2006/06: 30). 73. Nikkei Marketing Journal (2007: 63). 74. Nikkei (2008/10/03). 75. Nikkei Business (2008/11/03), interview with Lawson’s CEO Niinami Takeshi. 76. This section is based primarily on an interview and speech of Lawson’s CIO, both published in Nikkei Computer in September and October 2008, http://itpro.nikkeibp.co.jp/article/Interview/20080904/ 314168/ and http://itpro.nikkeibp.co.jp/article/NEWS/2008 1017/317199/ 77. See also Nikkei IT Professional (2003/01), ‘Tenpo to honbu de buntan suru kihontekina gy¯omuwo shiru’ (Knowing the basic operational tasks assigned to stores and headquarters). 78. As of 28 February 2010. See alacrastore.com. 79. Nikkei (2001/02/27), ‘FamilyMart store closings signify turning point of the industry’. 80. Financial Chronicle online article (2008/12/19), ‘Convenience stores in Japan gain from recession’. 81. Nikkei Veritas (2008/12/08), ‘Will FamilyMart, Circle K merge into top convenience stores?’. 82. Gekkan Conbini magazine (2008/05: 34 et seq.). 83. Gekkan Conbini magazine (2008/05: 44 et seq.). 84. Nikkei handbook of distribution and marketing (2002: 107). 85. FamilyMart annual report (2009: 25). Notes 185

86. The section on FamilyMart’s change projects is based primarily on my interview with a general manager and an interview with the marketing manager published by Nikkei BP, http://business.nikkeibp.co.jp/article/ topics/20060605/103607/ 87. FamilyMart annual report (2009). 88. Source: Nikkei Business, http://business.nikkeibp.co.jp/article/ topics/20060605/103607/ 89. FamilyMart annual report (2009: 20). 90. Gekkan Conbini magazine (2008/05: 46). 91. Nikkei Strategy (2008/12), ‘Saik¯o no keiken kara vision wo fukameru’ (strengthening the vision through maximum experience). 92. Gekkan Conbini magazine (05/2008: 33). 93. Nikkei (2002/07/28), ‘Major convenience store operators target underground spaces’. 94. See FamilyMart IT material, www.family.co.jp/company/investor_ relations/library/hc0g740000004iid-att/presentation07.pdf and http://www.family.co.jp/english/investor_relations/ annual_report/pdf/06_e_09.pdf 95. Nikkei Information Strategy (2007/01), ‘koten tai¯o shikumi ga nakereba dekinai–tenpo no n¯ohaowo nokoseru shisutemu ga hitsuy¯o’(no individual store support without a mechanism–a system is required that keeps store knowledge). 96. Nikkei Information Strategy (2007/01). 97. Nikkei Marketing Journal (2007: 65). 98. Nikkei Information Strategy (2007/01), ‘Shuch¯osuru CIO’ (CIO making an assertion). 99. FamilyMart CIO case file, www.ciojp.com/contents/?id=00001018; t=12 100. Nikkei (2008/03/26), ‘Famil¯i-M keij¯oekizenki 340 oku en, kisonten no han- bai uwamuku’ (ordinary profit of FamilyMart 34 billion yen, improving sales of existing stores). 101. See annual report (2009). 102. Translated from source: FamilyMart marketing manager in Nikkei Business, http://business.nikkeibp.co.jp/article/topics/20060605/ 103607/ 103. Gekkan Conbini magazine (2006/12). 104. FamilyMart annual report (2009: 21). 105. See, for instance, corporate profile, www.7andi.com/en/ir/pdf/ corporate/2007_02.pdf 106. See, for instance, Bloomberg news, www.bloomberg.com/apps/news? pid=newsarchive&sid=aqdbwIW0y9Dc 107. Rapp and Islam (2006) discuss the development of CS banking. 108. Nikkei Weekly (2003/02/03), ‘Combini culture’. 109. See Nikkei MJ (2009/03/25), ‘H¯oseidaich¯osa,otehon ni shitai kourigy¯owa rinen meikaku, sebun shui’ (H¯oseiUniversity survey–Seven – Eleven on the leading position for clear corporate philosophy). 110. Nikkei Marketing Journal (2006: 65). 111. Gekkan Conbini magazine (2004/04: 11). 112. Nikkei Marketing Journal (2007: 65). 186 Notes

113. Gekkan Conbini magazine (2005/07: 36) et seq.). 114. An association formed in 1979 mainly by vendors of rice-based products developing products, managing quality, procuring ingredients and imple- menting environmental measures jointly with approximately 80 member companies. 115. Nikkei (2001/10/21), ‘Convenience store operators pursue opposite outlet strategies’. 116. Nikkei handbook of distribution and marketing (2003: 78). 117. A rise of 52 per cent in 2004, a 15 percentage point increase compared with the previous year. Source: Nikkei handbook of distribution and marketing (2004: 35). 118. Gekkan Conbini magazine (2004/12: 56 et seq.) and (2005/06: 30). 119. There is even a third type of ‘global merchandising’ contracts with international partnerships for product development with companies such as Nestlé and Coca-Cola. 120. See company announcement, www.sej.co.jp/corp/news/2004/pdf/ 112902.pdf 121. Nikkei handbook of distribution and marketing (2004: 35). 122. Nikkei Marketing Journal (2006: 313). See also Nikkei Weekly (2007/11/30), ‘PB de m¯ek¯aneage ni taisen’ (Fighting against manufacturer’s increase in price with private brand) 123. Translated from my interview with general manager at Seven–Eleven Japan headquarters. 124. Translation from my interview with general manager at Seven–Eleven Japan. 125. See also Gekkan Conbini magazine (2004/04: 13).

6 Discussion of rigidities and new approaches

1. According to a patent attorney, Nikkei 2000/06/08, ‘Japan lags in business patenting, IT protection’. 2. See also (Yahagi, 1997: 19). 3. Nikkei Computer (2008/09/09), ‘Hensh¯uch¯ointaby¯u–l¯oson j¯omushikk¯o yakuin CIO Yokomizo Y¯oichi’(The chief editor interview – Lawson CIO Yokomizo Y¯oichi). 4. New York Times (2006/09/03), ‘As Japan’s population ages, its stores hurry to adapt’, www.nytimes.com/2006/09/03/world/asia/03iht-journal. 2682018.html 5. Interview with FamilyMart’s CEO in Gekkan Conbini magazine (2008/05). 6. MIR Inc. research summary, http://mir.biz/2006/12/2817-0157.html 7. According to the company message on www.lawson.co.jp/company/e/ activity/index.html 8. Translated from the interview with a manager at Lawson headquarter’s product. 9. Gekkan Conbini magazine (2004/05: 67). 10. www.senryakukou.com/mlmg/200309/08reika.html 11. See, for instance www.businessweek.com/magazine/content/07_24/ b4038409.htm 12. Gekkan Boss 2007/11/26 Keiei senki – Niinami Takeshi Lawson CEO (management strategy – Niinami Takeshi, Lawson CEO). Notes 187

13. Nikkei Marketing Journal (2008: 233). 14. Nikkei Weekly (2008/12/08: 25). 15. Retail Trends in Japan, Industrial Reports JETRO (2007: 2). 16. Nikkei handbook of distribution and marketing (2004: 36). 17. More details available at www.bain.com/bainweb/Consulting_ Expertise/capabilities_overview.asp 18. See also Gekkan Conbini magazine (2004/01: 26).

7 Conclusion

1. See, for instance, 2006 survey by a lean specialist ﬁrm, www.leanadvisors. com 2. According to the sample ﬁrms’ statements in Anand et al. (2009). Bibliography

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100-yen shop, 59 capability trap, see capability paradox capability-based inertia, 152 advanced store opening, 93 census survey, 72 age groups, 51 chain operation, 36 aging population, 153 chain operator, 16 aging society, 146, 172 change agent, 18 alliances, 99, 100 change challenge, 85, 149 am/pm Japan Co., 92 change management, 133 ambidextrous systems, 171, 176 change project, 145 appreciative inquiry, 135, 156 changing environment, 150, 153 area franchise, 113, 158 arubaito, see part-time workers closed-network distribution, 26 automated ordering system, 52 cognitive trap, see commitment automated teller machine (ATM), 45 commitment, 14, 78, 152 communication, 127 baby-boom generation, 65 community-oriented business, 124, balance between innovation and 126 improvement, 85, 162 competition, 59, 60 barcode system, 50 competitive strength, 133 bent¯o, see boxed lunch competitiveness, 42, 65 bottom-up initiative, 134, 174 comprehensive cooperation bottom-up participation, 165 agreement, 110 bounded rationality, 13 conglomerate, 29 boxed lunch, 59 Consolidated Foods Inc., 33 brand awareness, 34, 46 constant returns to scale (CRS), 74 brand identity, 128 consumer preference, 48, 61 brand image, 133 consumer reluctance, 153 broadband internet, 137 continuous improvement, 2 bubble economy, 19 continuous improvement business alliance, 106, 118, 168 infrastructure, 16 business change, 169 convenience store manual, 27, 34 business culture, 118 convenience store system, 19, 22, 25 business segments, 116, 140 core competence, 131 consulting, 116 core product, 113, 138 convenience store, 116 corporate drop-out, 125 ﬁnancial, 116 corporate identity, 133 ticket sales, 116 corporate philosophy, 54, 141 business transfer, 115 corporate restructuring, 157, 167 buying behaviour, 60–64 corporate rigidity, 14, 154 capability building, 156 corporate strength, 90 capability dynamization, see dynamic corporate values, 142 capability credit card, see services capability paradox, 2, 16, 151, 173 cross-functional cooperation, 56

198 Index 199 cross-functional teams, 18, 81, dynamic strategy deployment, 16 165 e-commerce, 58, 67 CS system, see convenience store e-Net, 140 system economies of scale, 59, 157 customer confidence, 38 education, 110 customer generation, 136 efficiency analysis, see data customer groups, 11, 51 envelopment analysis customer loyalty, 61 efficiency-oriented management, 156 customer needs, 118, 141 efficient ordering, 142 customer perspective, 174 elderly people, 43, 61 customer relationship, 11 electronic order book (EOB), 50 customer sales data, 23, 47 employee empowerment, 157 Daiei, 30, 32, 33, 116 environmental change, 84, 120 Daiei convenience store environmental preservation, 110 systems, 33 equity participation, 103, 109 daikibo kouri tenpo richi h¯o, see Large equity tie-up, 118 Store Law evolutionary myopia, 13, 167 daily food, 41 evolutionary process, 5 Daily Yamazaki, 95 exclusive dealership, 26 daiten h¯o, see Large Store Law exclusive product development data envelopment analysis (DEA), 71, contract, 124 152 exclusive right, 26 datsu sara, see corporate drop-out expansion strategy, 46, 59, 124 de-centralized administration, 160 exploitative learning, 114 DEA, see data envelopment analysis explorative learning, 114 dead inventory, 49 familiarity (brand image), 138 decision making, 119 family-oriented business, 11 decision making unit (DMU), 71 family-owned business, 26 define–measure–analyse–improve- FamilyMart, 6, 34, 52 control (DMAIC), 82 Famima, 132 delivery service, see services Famima Fresh corner, 132 delivery system, see distribution fast-food, 31, 41 system fast food business, 28, 59 demographic change, 61, 65 fertility rate, 153 department store, 29, 72 fibre-optic network, 102 Department Store Law, 29 firm identity, 133 digitalization, 43 firm value, 133 disposal cost, 114 foreign capital law, 28 distribution agreement, 26 foreign direct investment, 28 distribution organizations, 12 foreign private retailers, 28 distribution system, 45, 119, 141 franchise agreements, 34, 66, 113, 120 district manager, 80 franchise system, 22, 45, 65 diversification strategy, 92, 93, 124, franchise contract, 57 132, 136, 155 royalty payment, 68 dominant expansion, 33, 120 stakeholder conflict, 68 drugstore, 59, 60, 108 fresh convenience store, 97 dynamic capability, 12, 84, 114, 160 front-line employee, 79 200 Index front-line operation, 118, 137, 162, item-by-item management, 39, 46, 50, 169 52, 55, 141, 159 full-time workers, 71 Japan Franchise Association (JFA), 57 general management, 80 Japan Post System (JPS), 4 goal setting, 17, 119, 166 Japanese capitalism, 26 greengrocery, 31 joint delivery system, see distribution gross profit sharing agreement, 120 system growth opportunities, 36 joint venture, 115 gy¯omuteikei, see business alliance just-in-time (JIT), 1 h¯okatsu renkei ky¯otei, see Kaisha Bunkatsu Law, 100 comprehensive cooperation kaizen, 1, 4 agreement kakushin-sei, 66 henkaku, 66 kanban, 1, 4 high-density market, 46 kasetsu kensh¯ogata hach¯u, see hospitality (brand image), 133, 138 hypothesis-testing ordering household composition, 61–63 system human relations, 155 knowledge hybrid store, 107, 109, 114, 163 diffusion, 67 hypothesis-testing ordering system, infusion, 171 38, 50, 56, 68, 121, 141, 150 sharing, 67, 103 tacit, 171 improvement initiative, 134 knowledge spiral, 2 incentive realignment, 169 knowledge transfer, 11 incomplete market, 13 individual store orientation, 158 labour efficient management, 37 individual-oriented business, 11 Large Store Law, 29, 30, 35, 60 individuality, 136 large-scale CS chains, 32 inertia, see structural inertia Lawson, 6, 33, 34, 52 information exchange, 135 Hospital Lawson, 92 information system, 48–53, 83, 127 Lawson ATM Networks, 140 information technology, 26, 47 Lawson Challenge 2004, 118, 163 infrastructure, 27 Lawson Challenge 2007, 119, 163 infrastructure framework, 16 Lawson Inc., 33 initial public offering, 58 Lawson Milk Inc., 33 innovation, 134 Lawson Plus, 99, 163 innovation capability, 23, 67 Lawson Store 100, 93, 124, 164 innovation routine, 171 Lawson University, 119 innovation-related information, 22, Natural Lawson, 93, 124, 163 23 Postal Lawson, 92, 107 innovative stock management, 39 Value Lawson, 124 insiders (contractual relationship), 22 lean management insufficient inventory, 69 lean principles, 19, 46, 122 integrated information system, 49 lean retailing, 3, 4, 115 internal improvement infrastructure, lean thinking, 128 8 legal environment, 28 inventory-management system, 23 liquor shop, 31 IPO, see initial public offering list price, 64 ISDN network, 51 local capability, 157 Index 201 local environment, 92 operation field counsellor (OFC), 49, local lifestyle, 110 83 local safety, 110 operational agility, 162 localized infrastructure, 173 operational routine, 139 lock-in, 3 operations management, 6 logistic problem, 45 opportunity cost, 65, 92 loss-making store, 131 optimal order placement, 38 low-selling product, 142 order placement, 38, 40, 41, 52 lower-level staff, 54 ordering, see store operation ordering system, 47 M&A, 99, 100 organizational capability, 151 M&A data book, 100 organizational design, 169 management buyout, 101 organizational learning, 14 management by objectives, 118, 119 organizational paradox, see capability management efficiency, 157 paradox management responsibility, 114 organizational resources, 11 manufacturers, 43 organizational structure, 22 market dynamics, 89, 91 original goods, 143 market entry, 89 outsiders (contractual relationship), 22 market environment, 59 overconfidence, 154 market exit, 89 oversupply, 69 market niche, 31 paradox of capability, see capability market saturation, 8, 153 paradox marketing organizations, 11 parent–subsidiary relationship, 140 MatsumotoKiyoshi Holdings, 108 pareto efficiency, 71 maturation stage, 25 part-time workers, 51, 72, 80 meetings, 83 partnership, 99, 122, 144, 167 mindset rigidity, 165 partnership agreement, 109, 143 mini-bank, 45 partnership contract, 42, 48, 144 Ministop, 92 path dependence, 13, 151, 167 Ministry of Economy, Trade and payment acceptance, 51 Industry (METI), 27, 37, 58, 71 performance-based logistics, 1 Ministry of International Trade and person-to-person contact, 56 Industry (MITI), 27 pharmaceutical sales, 108 motivation of employees, 78, 80 plan–do–check–act (PDCA), 82, 160 multi-firm analysis, 21 point of sale (POS), 23, 40, 50, 56, 127, New Corporations Law, 100 141 niche identification, 149 pre-rapid growth period, 26 niche marketing, 136 premium segment, 138 Nihon Delica Foods Association, 143 private brand, 99, 106, 143 Ninty-Nine Plus Inc., 124 process redesign, 169 non-equity alliance, 106, 114, 140 processed food, 41 non-food item, 41 product appeal, 139 product development, 11, 22, 41–43, oil crisis, 5, 29 106 oligopoly, 102 co-development agreement, 43, 120, onigiri, see rice ball 141 online accounting system, 49 group merchandising, 144 202 Index product line-up, 37, 41 scrap-and-build, 143 product quality, 136 second oil shock, 55 product supply, 22 secondary information system, see product-related information, 4 total information system productivity growth, 91 Seiy¯u,30, 34 productivity performance, 91 self-monitoring, 40, 162 profitability, 118 self-reinforcing process, 13, 35, 54 project selection, 119 self-service, 36 services, 43, 45 quality management, 96 bank, 5 R&D outlets, 164 bill payment, 43 re-organization, 100 catalogue shopping, 43 real-time inventory management, 141 child-mining, 109 recommended order entry, 52 credit card, 45 reconstruction, 116 delivery, 5, 43 regional activity, 110, 156 diversity, 43 regional business, 145 funds transfer, 45 regional management system, 157 garbage pick-up, 5 regional manufacturer, 110 home cleaning, 5 regression analysis, 91 home delivery, 146 reliability, 133 laundry, 5 relocation of stores, 92 loan repayments, 45 replenishment-ordering system, 38 mail order, 43 requirements definition, 169 meal delivery, 146 Research Institute of Economy, Trade online shopping, 5 and Industry (RIETI), 122, 167 postal, 5 research methodology, 8 printing, 5, 43 research questions, 24 ticket agent, 5, 43 residential service, 110 Seven–Eleven Japan, 4–6, 19–21, 23, resource-based inertia, 152 31, 33, 42, 43, 47, 50–52, 54, 177 restructuring, 99 It¯oY¯okad¯o,5, 30–32 retail index, 116, 129 IY Bank, 140 retail innovation, 16, 25 Seven & i Holdings Co., Ltd., 31 retail operation system, 22 Seven-Meal Service, 146 retail structure, 26, 27, 31, 45, 48 Seven&i Holdings, 140 retail trend, 59 Southland Corporation, 4, 22, 32, return on equity (ROE), 123 33 return on investment (ROI), 65 York Seven, 33 rice ball, 41 shakeout challenge, 149 rigidity, 14, 15 share price, 58 ringisho, see suggestion box shinri, see state of mind role allocation, 31, 139 Shop 99 chain, 124, 164 routine rigidity, 154 single item management, see royalty item-by-item management margin-based, 68 Six Sigma, 17 sales-based, 68 slip order system, 49 Small and Medium Enterprise (SME) Saison Group, 32, 34 Agency, 27, 34, 36 satellite store, 92, 156 small retail business sector, 29 Index 203 social changes, 31 team-based approach, 165 social environment, 60, 96 technological innovation, 25 special location store, 92 technological parity, 66, 151, 169 speciality store, 72 technology cycle, 67 spill-over effect, 48, 54 technology procurement, 169 stand-alone entity, 21 tenpo tay¯oka, see diversification standard items, 121 strategy standardized improvement, 18 Terminal 7, 49 state of mind, 148 terminal controller (TC), 50 stock conversion rate, 146 The Jewel Companies, Inc., 34 stock efficiency, 46 theoretical framework, 24 stock out penalty, 122 people, 18, 56, 83 stock-keeping unit, 126 process, 17, 54, 55, 80 store controller, 126 purpose, 16, 54, 78 store development department, 136 tie-up, 106, 157 store layout, 36 time convenience, 126 store operation, 36 Tomony, 92 strategic change, 176 top-down management, 81, 82, 155 strategic renewal, 114 top-selling products, 38 strategy formulation, 79, 174 Toray Corporate Business Research, strength, weaknesses, opportunities Inc., 72 and threats, see SWOT analysis total information system, 50 structural change, 59 total integration, 54 structural inertia, 3, 6, 14, 153, 171, Toyota Production System (TPS), 3, 53, 173 54 capability-based, 152 trade-off effect, 22 resource-based, 152 traditional management system, 156 structural reforms, 153 training, 83, 135, 169 suggestion box, 83, 84 training centre, 118 Sun Shop Yamazaki, 52 training methods, 83 Sunchain, 52 trust, 133 supermarket, 72 supervisor, 81 value-added item, 24, 43, 106 supply chain management, 54 variable returns to scale (VRS), 74 survey, 77 vendor selection, 169 sustainability, 171 vertical organization, 162 sustained improvement, 1 volatile markets, 12 SWOT analysis, 64 Wal-Mart, 32 synergistic interaction, 19 waste loss, 127 system customization, 169 western companies, 3 system rollout, 169 western firms, 2 tanpin kanri, see item-by-item White Hen Pantry, 34 management wholesalers, 43 target-oriented management, see Yamato Transport Takkyubin (YTT), management by objectives 146 team merchandising, see product development zone manager, 80