3. External and Internal Environmental Analysis

3. EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS

3.1 PEST analysis

3.1.1 Analysis of political environment

The political environment refers to the political factors and legal systems that restrict and influence the business, and the political environment of its operational state includes the country’s political system, rights institutions, promulgated guidelines and policies, political groups, and political situation. In recent years, the Thai government has encouraged economic development and provided numerous industries with conditions and opportunities for autonomy and freedom so that the industry can control its own initiative and autonomy in marketing. (Branch, 2008)

The current political environment has both opportunities and challenges for Thailand 7-ELEVEN. On the one hand, although these free and autonomous economic environments are likely to threaten some industries, they will not threaten Thailand's 7-ELEVEN company, but from another point of view it will provide good development for Thailand's 7-ELEVEN development opportunity, because Thailand 7-ELEVEN can strengthen collaboration and communication with foreign companies, and can attract many highly profitable products. On the other hand, for other Thai local and foreign retail companies, they will also get a lot of money from them and will grow their strength. From this point of view, the competition pressure of Thailand 7-ELEVEN will undoubtedly increase. Therefore, this freedom has advantages and disadvantages for Thailand 7-ELEVEN. The expansion of large retailers was affected by urban planning in 2010.

The opening of large-scale supermarkets with an area greater than 1,000 square meters must be established within 15 kilometers of the urban area. Retail establishments with an area of 300-1,000 square meters can be opened in the urban area. But this is an opportunity for small retailers. Therefore, these large retailers such as Tesco lotus and BigC have launched small-sized retail outlets such as Tesco Lotus Express and Mini BigC in the urban areas in order to expand their stores. The introduction of such strategies has made the competition between small retail stores and convenience stores more intense. 3.1.2 Analysis of economic environment

The economic environment refers to the socio-economic conditions that constitute the survival and development of enterprises and the country's economic policies, including such factors as economic system, economic structure, degree of urbanization, and consumption structure. In recent years, Thailand has many factors that affect the development of Thai economy. The purchasing power of consumers, including the price of agricultural products, has been kept low in the international market, especially rubber, palm oil and corn. The economic slowdown of Thailand's manufacturing industry, exporters, and trading partners is especially in China, Japan, the United States, and Europe and concerns about the rising cost of living. According to the Ministry of Commerce, the price index of fresh foods, such as the rise of meat, vegetables, and fruits, and the rise in oil prices, also affect people's daily expenses. At the end of 2013, political demonstrations affected the atmosphere of tourism and consumption.

Despite the economic slowdown, the growth rate of the number of small retail stores is higher than that of the entire retail industry and the average growth rate for the overall retail industry is about 7%. However, the growth rate of convenience stores is about 15%. The main reason is that consumers can enter quickly and easily, in line with changing consumer demand. With the continuous depletion of the earth's resources, the price of oil has soared, and the frequency of price fluctuations has continued to increase. (Juyoun, 2018) Since its inception, 7-ELEVEN has stated that its logistics management is the most advanced and sound. The storage and distribution of goods are closely related. With the rise in the price of oil, the cost of the use of goods will continue to increase, and the cost will increase directly. Lead to the rise of commodity prices. Regardless of whether the operator will bear the cost of this part or increase it to consumers, the rise in oil prices will reduce marketing revenue.

Thailand's tourism industry is very developed. Every year, tens of thousands of tourists travel to Thailand. These tourists tend to have strong spending power and they pay great attention to branding. Most visitors to Thailand will choose to go to 7-ELEVEN convenience stores to buy products. The 7-ELEVEN convenience stores in Thailand has introduced many products and services for tourists, such as tourist phone cards, tourist maps, travel accessories and commonly used drugs.

Thailand's urbanization process has developed at a slow pace, and rural areas still account for a large proportion. The consumption capacity of the rural population is weak. In addition, there is resistance from local small shops, which affects Thailand's 7-ELEVEN in rural areas.

3.1.3 Social, cultural and demographic analysis

Changes in society, culture, and population have a major impact on all products, services, markets, and consumers. Enterprises in all industries, large or small, profitable or non-profit, face the opportunities and challenges brought about by changes in society, culture, and population. With the continuous development and progress of society, more women in the modern society have entered the workplace, and women’s income has also increased compared with previous years. At this stage, among the middle-income consumers in Thailand, the proportion of women is increasing, and the consumer groups tend to be more feminine. Compared with male consumers, women pay more attention to health and beauty when purchasing products. Thailand 7-ELEVEN saw this opportunity to increase income, adjust its structure on the product, and join more popular foods and beverages such as vegetarian foods and fruits and vegetables to meet this demand. Their spending power has been constantly increasing. The increase in women’s income has led them to pay more attention to health and beauty. If we can develop women's market very well, 7-ELEVEN's competitive strength will be greatly improved and it will grab more market share. For example: to provide vegetarian foods and healthy foods such as fruits and vegetables. Although the female market has good development potential and forward-looking ability, if it cannot seize the opportunities in front of other competitors and expand the market, this market will become a major challenge and threat for 7-ELEVEN.

In addition, the family structure in Thailand has also changed. More and more people choose to live alone, or young couples have no children and fewer and fewer family members. Therefore, they do not need to purchase a lot of things, and shopping is mainly for convenience. In recent years, the growth of vehicles in Thailand has been rapid, and the number of congested sections has increased. Many people do not want to go shopping far away, and prefer to shop nearer. With the continuous progress and changes in the society, the fast food culture has also been greatly developed, and the speed and efficiency have been continuously improved. Thailand 7-ELEVEN well adapted to this social change, implemented all-weather operations, chose to address the more focus on convenience, continuous improvement and Zeng Qian's own quality, leaving a very good impression in the minds of consumers. At the same time, the form of lunch has also been continuously improved, quality has been continuously improved, and consumers’ trust has been continuously deepened. These are all positive aspects.

3.1.4 Analysis of science and technology

Science and technology restrict the entry threshold of industry, and provide sufficient time for the upgrading of the industry and the improvement of the structure. Thailand 7-ELEVEN's logistics system has always been the highest reputation in the industry. Fresh foods have been delivered three times a day. This ensures that every consumer can buy the freshest food and ensure that consumers can buy the best food. We want product. The company uses POS for sales. It can clearly understand the consumer's buying needs and purchase trends from the sales system, and can maximally tap potential spending power and resources. From the service point of view, Thailand 7-ELEVEN uses the most advanced network technology to provide customers with services such as photocopying, fax delivery, purchasing and purchasing, e-commerce pickup, ATM cash machines, and other services. The magic of science and technology lies in its ability to make existing commodities unpopular and to enable the desired products to become real-life products. From the development process of Thailand 7-ELEVEN, it can be seen that science and technology plays an extremely good role in industrial growth, and is a learning model full of positive energy.

3.2 Analysis of industrial structure (five forces model analysis)

3.2.1 Competition among peer companies (competitiveness of existing competitors)

Among the five competition factors, the competition among peers is often the most significant. Only when the company has a greater advantage than its competitors will its strategy succeed. Changing the strategy of an enterprise may inflict retaliation against adversaries, such as price cuts, quality improvement, feature enhancements, service enhancements, expanded guarantees, and increased advertising. At this stage, the growth of Thailand 7-ELEVEN has entered the most mature period. When the development of an industry has reached a mature stage, the market for this industry is already on the verge of saturation, and the emerging demand is only for replacement, and the growth of the industry will also become slow or even stop growing. Now, no matter where we are, we will see many convenience stores where consumers can get the service they want.

At present, there is a relatively large competition in the convenience store industry in Thailand. Even retailers of the same size, such as 7-ELEVEN, Lawson, 108Shop, Family Mart, or large multinational retailers such as BigC, Tesco Lotus, and Carrefour’s overseas competitors, will obviously use price wars and use various products. A variety of competitive strategies are organized for various marketing items such as buying 1 get 1 or buying 2 discounts. However, 7-ELEVEN's marketing strategy is not based on price wars but using differentiated strategies. It is more appealing to consumers than other convenience stores, and consumers think of 7-ELEVEN when they mention convenience stores. In Thailand, 7-ELEVEN has about 7,429 stores, covering all areas of the Ayutthaya town. Every Thai person receives the convenience and services from 7-ELEVEN. People in Big Cities can find: Every other person in the street, A few meters will have a 7-ELEVEN convenience store 7-ELEVEN store in Thailand's convenience store market share of about 70%, in 2013 the entire year's turnover exceeded 222 billion, 7-ELEVEN Thai daily average number of customers is 920 Tens of thousands of people make it difficult for other industries to surpass. In 2013, Thailand's large and small convenience stores had approximately 12,466 locations in various cities in Thailand. The convenience stores in Thailand such as 7-ELEVEN, Lawson, 108Shop, and Family Mart have established their brands and reputations. Other emerging convenience stores will face difficulties in entering this field. In Thailand, whether it is a Big City or a small town, many convenience stores will be found. The first problem faced by other operators in the same industry to join is the difficulty of site selection. It can be seen that in Thailand, the number of convenience stores is already on the verge of saturation, the potential danger is hard to enter.

3.2.2 Entering potential competitors

For an industry, if new competitors enter the industry, this will affect the market share of the companies that already exist in the industry will be divided. If there is a certain threshold for entry into the industry, the threshold will be higher, which will benefit companies already existing in the industry. Potential contenders: Currently, 7-ELEVEN convenience stores do not compete in the same industry, and the same industry has become competitors of the company's competitors. Potential competitors for 7-ELEVEN convenience stores are large multinational retail industries such as BigC, Tesco Lotus, Carrefour, etc., which are set up in large cities or larger communities. These large multinational retail stores have relatively complete infrastructure such as: All kinds of products such as payment, movie theaters, and small banks are also cheaper than the 7-ELEVEN convenience store. They occupy a certain market share in this retail industry. The size of the barriers to entry determines the risk of potential competitors entering. 7-ELEVEN does not need to sell tens of thousands of products. The most important product is to provide consumers with “convenience”. The barriers to entry for hypermarkets are:

1. Convenience of distances: Convenience stores tend to have a preference for address selection in smaller areas such as residential areas, office buildings, or near schools. These small shopping areas can easily reach customers on foot.

2. Convenience of time: The convenience of time has two meanings: First, it means that convenience stores are open for 24 hours, and customers can go to convenience stores to buy goods at any time; another means that customers spend very little money in convenience stores. Time can buy the goods needed because the goods in the convenience store are arranged very neatly, the type is very reasonable, and the customer can quickly find the desired product.

3. Convenience of goods: The convenience store's products can meet the daily needs of consumers from food to general household products, and the stores are in close proximity. Consumers usually prefer to go to convenience stores to purchase goods.

4. Convenience of service: In addition to the goods available, consumers can also enjoy many convenient services at the 7-ELEVEN stores, for example, they can pay various fees and ATM services.

5. Modern shops and equipment: The decoration design of the convenience store is generally simple and bright. The display of merchandise is very particular and looks clean and comfortable.

3.2.3 Supplier's bargaining ability

The supplier has no effect on 7-ELEVEN, because 7-ELEVEN has many stores in Thailand. As of 2013, 7-ELEVEN has a total of 7429 stores in Thailand; so many suppliers want to supply 7-ELEVEN, because if suppliers can sell their products in the 7-ELEVEN shop, it will easily cover all of Thailand. 7-ELEVEN is more rigorous in the selection of suppliers. They set conditions for suppliers: if the supplier fails to provide the goods on time and the lack of goods in the 7-ELEVEN stores affects the customer’s purchase, the supplier will compensate 7-ELEVEN. 7-ELEVEN also rigorously screens for product quality and sales. If quality fails, it cannot be sold in the store. If the product does not reach the target, it will be removed.

3.2.4 Buyer's bargaining ability

For 7-ELEVEN shop buyers are the ultimate consumers who purchase the product. The 7-ELEVEN convenience stores adopts price-based sales, and consumers only have the option of buying and not buying, and cannot make a decision on the price of the product. Therefore, consumers of 7-ELEVEN convenience stores do not have the ability to bargain. Although there are many retailers that make some marketing measures, 7-ELEVEN has no advantage in terms of price. However, in the current fast-paced society, people are increasingly pursuing convenience and speed, so 7-ELEVEN is the first choice for consumers to shop, because the wide range of goods in the store can basically meet the daily needs of consumers.

3.2.5 Development of potential alternatives (threat of alternatives)

The threat of alternatives cannot be conclusive given that different consumers have different consumer needs and the different nature of the goods also have different threats. For example, beverages: Consumers can purchase similar beverages from a beverage shop; they can also choose their own brewed instant beverages; snacks: consumers can buy them from large supermarkets or grocery stores; cooked foods: consumers can be in 7-ELEVEN. Buy quick and easy microwave food, you can also go to the restaurant or canteen to buy cooked food; Household products: Consumers can buy commonly used household items in the 7-ELEVEN convenience store, but also to large supermarkets, wholesale stores to buy; books, newspapers, Magazines: Books and magazines sold in 7-ELEVEN are also available to consumers in bookstores.

3.3 Thailand 7-ELEVEN company competitive advantage

3.3.1 Innovation

The so-called innovation is the use of new or unimagined forms in the actual business process, or in the production of a product. Innovation is mainly reflected in the types of products, production processes, management mechanisms, organizational structure, and corporate strategy.

The retail industry has previously attached importance to the selection of locations, followed by the selection of locations and innovation in the industry. In the past, it has also incorporated efficiency improvements. If you want to survive in the retail industry, you must have the above three points at the same time. It is also firmly believed in this idea that 7-ELEVEN was able to successfully transform itself from a grocer to a chain of stores. It will become the model of this industry, become the target of imitating, and become a global chain convenience store. Thailand 7-ELEVEN also continuously innovates, continuously improves its own management mechanism and logistics mechanism, provides consumers with more convenient and efficient services, continues to meet the needs of customers, and constantly launches new products and a wide range of products. Increasing customers' choices will subtly influence the customers' attitudes and habits. For example, the Smart purse service provided wills no longer cause customers to feel distressed. Pursue differentiated operation of products, marketing from customers' emotional points, strengthen communication with customers, and provide various payment services Customers can pay for electricity, water, telephone and other constant improvements in products and services. These practices all make 7-ELEVEN deeply integrated into the minds of consumers. While adhering to innovation, 7-ELEVEN continues to compete, which in turn enables 7-ELEVEN to stand proudly in the retail industry and become a role model for other competitors.

3.3.2 Service advantage

In order to continuously meet the needs of consumers, companies must constantly grasp the dynamics of the market and consumers and must be able to master more precise needs. Differentiation is mainly determined by the design, service, and after-sales service. Therefore, the company must build its own brand and increase the company's revenue. 7-ELEVEN attaches great importance to the details. He believes that the details are the main factor in measuring customer satisfaction. The main reason why 7-ELEVEN has a large number of repeat customers is that it allows consumers to enjoy the discovery. In addition to upgrading the storefront, the company will also be able to make room more convenient and convenient. For example, it will upgrade the sliding door refrigerator to a sloping plate refrigerator and upgrade it to a full-open refrigerator. The company adopts an innovative business philosophy. The products introduced have aroused customers' nostalgia and created a topic. These practices have strengthened communication with consumers, and have enhanced customer loyalty to the brand, which has greatly increased the company's economic benefits.

3.3.3 Scale advantages

The development trend of foreign convenience stores in Thailand is far more than that of local convenience stores because foreign convenience stores are often strong and can form scale advantages in a short period of time. Thailand's local convenience stores are mostly based on single store operations, and their economic strength is relatively weak. This restricts the development of local convenience stores in Thailand. Thailand 7-ELEVEN Company is aware of this, using scale advantages to reduce costs and increase profits. Thailand 7-ELEVEN Company’s advertising, distribution, etc. are unified management. Many foreign convenience stores in Thailand have begun to focus on the advantages of scale and have begun to integrate. For example, after the merger of Thailand's Top daily and Japan's Family mart, there were approximately 900 stores in total. In addition, local Thai Sahapat Company and Japanese Lawson Company also started cooperation.

3.3.4 Technical advantages

Unlike the open shopping environment of large supermarkets and shopping malls, the area of convenience stores is generally relatively small, usually only about 100 square meters, but the number of convenience store products is tens of thousands. This requires the use of advanced technologies and commodity management tools to maximize the use of limited space. Thailand 7-ELEVEN convenience store has a complete set of basic hardware such as computers, cash registers, barcode machines, surveillance cameras, etc. In addition, it also vigorously develops POS, EOS, MIS and other information systems. The formation of convenience store scales is often achieved by increasing the number of stores. In order to allow many stores to achieve store-store linkages and links between stores and headquarters, a strong information system needs to be established. At present, the rise of e-commerce has also provided new development opportunities for convenience stores. Convenience stores can use Internet technology to develop e-commerce businesses and form a network system that enables consumers to shop online and distribute goods among stores.

Thailand 7-ELEVEN convenience stores have gradually begun to focus on the automation of in-store transactions. Thai 7-ELEVEN convenience stores have installed self-service equipment such as coffee makers, ice makers, cigarette makers, ATM machines, and automatic payment machines. Thailand 7-ELEVEN has invested in an important information technology system. This information system is the core link in the entire supply chain, ensuring that the store can efficiently meet 9.2 million customers every day. These systems include goods and services sold in stores, telephone call centers, ordering and distribution systems. Therefore, problems in the information technology system may affect the ability of 7-ELEVEN convenience store operations to provide services and may have a negative impact on the company's operating performance. The company realized the importance of information technology in the shops and various departments, so the company established a standby system that meets recognized standards. The company has set up two major information systems centers in different regions, not in Bangkok's Silom and Chaengwattana. If there is a problem with one information center, another information center will provide support. In 2013, the company invested in a disaster recovery plan (DRP) to ensure that the most unexpected situation occurred in one center, and the information technology system would be able to work in one hour. In addition, the company has a team of experts to prevent fires and floods. The company also regularly monitors the continuity of the continuous development of information technology in this area. In addition, in addition to regular monitoring by the internal audit team, the external audit company also tests the company's information technology system each year. The advanced retail information system can provide tracking and feedback to customers and suppliers in the supply chain, improve the accuracy of purchases, reduce inventory backlog, accelerate capital turnover, and improve management efficiency.

3.4 Core competence

3.4.1 Strong brand strength

Thailand 7-ELEVEN always adheres to a positive business attitude. Regardless of the type of goods or the quality of the goods, it has sufficient and strong group resources, and can influence the living habits of consumers, and constantly improve the quality of its products and services. Won the public's love and trust, and constantly enhance their own brand performance, has gained a good reputation and credibility, stand out in the fierce market competition, becoming the largest retail company. In addition, 7-ELEVEN continued to carry out social charity activities, contributed its own strength to the society, helped a large number of people in difficulty, and produced a large number of public service advertisements, such as: opposing the use of violence against women and children, South Asian tsunami fundraising, and concern for melancholy Patients, helping to find missing children. These actions have enhanced the reputation and credibility of 7-ELEVEN, winning the public's love and support.

3.4.2 Wide shop coverage

In the streets and alleys of Thailand, 7-ELEVEN's convenience stores can be seen everywhere. They appear in every inconvenient corner and area, which brings consumers closer and provides more convenient and caring services for consumers.

3.4.3 Perfect network structure

In Thailand, the 7-ELEVEN convenience stores have spread all over the streets and all corners and regions. It is also the most convenient store with ATM. Through the combination of online marketing methods, we can more fully meet the specific requirements of each customer and provide more comprehensive ordering services. In addition, the convenience store will also publish the latest news and product information on the Internet, and consumers will review it in time to learn more detailed product information.

3.4.4 Perfect information mechanism

In 2003, 7-ELEVEN developed a complete and advanced POS service intelligence mechanism through unified information with transfer companies. This mechanism is mainly used to analyze and grasp the needs of customers and continuously improve the marketing system. It has a strong intelligence function, can detect and understand the status of incoming and outgoing shipments per hour, the daily weather conditions, can best meet the requirements of customers, and can improve the company's marketing capabilities. Through perfect system mechanisms and real-time data sharing, it can effectively save human resources, maximize the economic benefits of the store, and can satisfy customers’ purchase requirements and wishes.

3.4.5 Strong marketing capabilities

Thailand 7-ELEVEN has a sound retail supply chain and has realized the design-development-production-distribution-to-sales cycle. It is managed and supervised by a professional marketing team. A sound supply chain generates a sound consumer value chain. The better the consumer's satisfaction, the stronger the company's marketing strength. At this stage, Thailand 7-ELEVEN focuses on the complete and rich variety of goods, quality and service, and first-rate hygiene standards. These are 7-ELEVEN marketing methods at the present stage. The implementation of these methods depends on the company's competitive strength. The convenience store advertisements we see every day are maps of the retail network based on the addresses of convenience stores. Its unique competitiveness makes it enter every inconvenient corner and area, providing people with the most convenient services.

3.4.6 Strong supply chain

Thailand 7-ELEVEN has its own distribution center, unified distribution, all branches and retail outlets can share the resources provided by the group, which will help reduce the company's marketing costs and enhance operating efficiency. 7-ELEVEN will continue to improve the quality of its products by constantly improving its own supply chain, continuously satisfying customers' various needs, and constantly discovering potential customer groups.