Ella Script 7-Eleven

I.
Profile of the Company/ Nature of Business Operation
7-Eleven, Inc. known as The Southland Corporation until April 1999, is the world's
largest operator, franchisor, and licensor of convenience stores, with more than 18,200 stores
in 18 countries, the vast majority of which carry the 7-Eleven banner. For 62 years, the
Southland name united many diverse businesses while preserving their heritage. However, ten
years ago Southland began divesting its other operations to focus on convenience retailing and
has consequently decided to rename the company '7-Eleven, Inc.', better reflecting our business
focus (7-Eleven Inc. Forum).
Philippine Seven Corporation (SEVN) was registered with the Securities and
Exchange Commission (SEC) on November 23, 1982. The Company acquired from Seven
Eleven, Inc. of Dallas, Texas the license to operate 7-Eleven stores in the Philippines on
December 13, 1982. SEVN opened its first store in February 1984 at the corner of Kamias Road
and EDSA Quezon City, Metro Manila.
In July 1988, SEVN transferred its Philippine area license to operate 7-Eleven stores to
its affiliate, Phil-Seven Properties Corporation (PSPC), together with some of its store properties,
in exchange for shares of stock of PSPC. In May 1996, the stockholders of both SEVN and
PSPC approved the merger of the two companies, with the SEC subsequently approving the
merger in October that same year. PSPC was then absorbed by SEVN as the surviving entity.
SEVN and its subsidiaries are primarily engaged in the business of retailing,
merchandising, buying, selling, marketing, importing, exporting, franchising, acquiring, holding,
distributing, warehousing, trading, exchanging, or otherwise dealing in all kinds of grocery
items, dry goods, food or foodstuffs, beverages, drinks, and all kinds of consumer needs or
requirements and in connection therewith, operating or maintaining warehouses, storages,
delivery vehicles and similar or incidental facilities. The Company is also engaged in the
management, development, sale, exchange, and holding for investment or otherwise of real estate
of all kinds, including buildings, houses, and apartments and other structures.
As of December 31, 2019, the Company is operating 2,864 stores, 1,577 of which are
franchise stores and the remaining 1,287 are Company-owned (PSE EDGE).
The top risks in retail industry to which PSC belongs include increase in competition,
brand reputation and business operations/supply chain continuity. Meanwhile, the main risks
arising from the Company’s financial instruments are credit risk, liquidity risk, and
interest rate risk. The Audit & Risk Committee ensures the integrity of internal control
activities, develops, oversees, checks and preapproves financial management functions and
systems in the areas of credit, market, liquidity, operational, legal and other risks and crisis
management. The Internal Audit Division and the External Auditor directly report to the Audit
Committee regarding the direction, scope and coordination of audit and any related activities.
PSC continually observes the activities of competitors in the relevant market, which
operate in various retail formats, all selling typical products and services for c-stores (branded
foreign/ local or generic), mini-marts, gas marts, drugstore-marts, groceries, supermarkets
(including their express or junior or smaller formats), and other hybrid stores. As part thereof, the
Corporation estimates it market share within the sector at 26% as to store count. In terms of fast-
moving consumer goods offered by the aforementioned retailers, PSC accounts for 2% of the
value sales of the market (7-Eleven Philippines).
IV. Recommendation
Having been able to know the nature and the standing of the company, the following are
recommended:
 Since the company is serving on-the-go customers, they must offer faster service at the
lowest reasonable prices with the highest quality.
 Also, for them to maintain their market share, they should be more innovative when it
comes to their services offered and products being sold. For example, creating more trademark
products which are unique and has an appeal to their customers. It is important to attract
customers and offering new and attractive products is one way of achieving it.
 Wider product differentiation is also a good move for the company to improve. Increase
suppliers with varied products. Such as, more toiletries, medicines, and other needs of the
customers which are not yet offered in their stores at present.
 Since the increase in their profits are caused greatly by continuous improvement and
franchising, the company could do research and development in these aspects. Such as, looking
for a better franchising strategy, which is the major source of their revenue. However, doing so,
the company should always be careful to protect their company name and not allow franchising
to people who are not eligible enough to carry out the good name of the company.
 For a better impression to the industry, the company should continue maximizing its
shareholders’ wealth - which is basically their main goal. One way of increasing shareholders’
wealth is by increasing in profits by which the earnings per share could also increase.
 Because the company is merchandising in nature, the best way to gain or increase it
profits are to minimize or have a good control of the fluctuations of the expenses without
damaging the operations of the company, its product quality and customer satisfaction.

Ella Script 7-Eleven

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I.

Profile of the Company/ Nature of Business Operation

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