SM Presentation:

Multi-domestic
The multi-domestic business strategy invests in establishing a presence in a foreign
market and tailoring its products to the local market. Companies adapt their products
and offerings and reposition their marketing strategies to engage with a foreign
audience. This includes taking into account foreign customs, traditions, and cultural
traits. 
With a multi-domestic business strategy, company headquarters are often maintained
in the country of origin. However, the company may establish localized
headquarters overseas from which they can more easily manage relations with
foreign customers. 
This strategy exists due to several cultural differences within various regions of the world.

Multi-Domestic Company Characteristics

The main characteristics of multi-domestic companies include:

 Cultural concerns — Multi-domestic companies are developed based on the culture of

the host nation. As a firm moves into the business environment within another
country, it creates different requirements. Businesses opt to pursue a multi-domestic
strategy to customize their products to meet the wants of the local markets and the
local culture. Organizational cultures in this strategy are mandated from the business's
day-to-day operation as the employees seek the most appropriate practices.
 Independent branches — In affluent multi-domestic corporations, the various
branches of the corporation are often independent. Although these branches depend
on the same sources of finances, they can separately identify and operate their
suppliers from one another. This branch independence makes the business easily
adjust to the local conditions.
 Decentralization — A company that uses a multi-domestic strategy is more
decentralized than multinational and traditional global firms. It is because it permits
the management of every nation to function to some autonomous degree and adopt
practices that differ from one another. Hence, making these companies more flexible
and adjusting to different business environments.

Pros and Cons of Multi-Domestic Strategy

Multi-domestic marketing strategy is when businesses employ several marketing and sales
tactics depending on their region of operation, such as distinct countries. Applying various
tactics enables companies to sell their commodities in the new environment. There are both
advantages and disadvantages to this practice.
A firm using a multidomestic strategy sacrifices efficiency in favour of emphasizing
responsiveness to local requirements within each of its markets.

7-Eleven is known in the United States as a convenience store chain where

customers can grab snacks, drinks and other everyday products on the go.
In most parts of the world, it is a no-frills store with little emphasis on
decor. But in Indonesia,7-Eleven has been positioned as a trendy spot
where young people spend time, surf the Internet and meet friends.
It's one of the hippest places to hang out in Jakarta.
Indonesia's 7-Elevens are, clearly, a long way from the original concept
behind the world's largest convenience store chain.

Traditionally, 7-Eleven's entry strategy is to target urban markets and

tailor stores to local tastes. For example, customers in Hong Kong can
pay their phone and utility bills at a local 7-Eleven; in Taiwan, they can
service their bicycles or photocopy at the convenience store; and in the
US they can pick-up their online Amazon shopping there. By offering
these services - often exclusively - customer traffic can be increased
significantly. To achieve this customer orientation and competitive
advantage, almost all stores arfe operated by franchisees, who
understand the local environment.

7-Eleven studied the culture, habits and tastes of the Indonesian

population and realised Indonesia lacked places where young people
could hang out, eat, drink and follow their new passion: being online. It
adopted a unique business model in the country: it blended a small
supermarket with inexpensive readymade food and seating to cater to
Jakarta customers looking for outdoor recreation space in a city where
traffic jams often restrict mobility.
7-Eleven in Indonesia is more focused on the experience of hanging out
rather than the convenience store concept itself.
When it came to pricing strategy, the local franchise followed the
company's traditional model. It leveraged the fact that its stores are
open 24/7, even when other food retail competitors are closed, and
priced products at the upper end.

7-Eleven Indonesia's unique customer experience extends to popular

local artists and social media websites. Local artists perform in 7-Eleven
stores because their fans like to hang out in these areas and 7-Eleven
provides the location at low or no costs. Although 7-Eleven has a first
mover advantage and has already built up a strong brand name and
large customer base, new competitors will come into this market and
existing ones are likely to reposition themselves. 7-Eleven should
continue to innovate its product range and offer additional services
that meet local traditions and customer needs to stay ahead of the
competition.

7-Eleven is a staple in the everyday life for some. A convenience

store can supply beers, food, stationery for some in the U.S. but it is
unlikely that a patron would really enjoy the hot dog. In Japan, we see
a huge difference in how 7-Eleven approaches satisfying customers.
The food ranges from corn dogs to sushi and ramen. From beer to 50
dollar whisky. Glocalization is when a company thinks global, but
acts locally. 7-Eleven is an example of a company that does a good
job of executing this. One example of how 7-Eleven is able to adapt
to the locations is its execution of Japanese stores. Convenience stores
(or konbini) in Japan are very different from those in the US. 7-
Eleven boasts the highest number of stores in Japan. Its private
label, Seven Premium, is known for its rich variety of products and
high quality that is even comparable to specialty stores. Japanese
konbini are open 24 hours and have everything you could want such
as prepared food, drinks, alcohol, and living essentials. Not only that
they have many services such as copy machines, ticket reservations,
and postal services. The perception of 7-Elevens in Japan is very
positive. Taking the U.S version of 7-Eleven and putting it into
Japanese culture the way it was would have been far less successful.

Very interesting article. I never would have thought that 7-Eleven was
so popular in an international market, such as Japan, since here in the
US its viewed as a limited convenience market that you only go to
when get gas, essentially. Great piece, thank you!

7-Eleven is best described as being a joint ownership. 7-Eleven does

exactly what some joint ownerships do where a business creates
local business with investors in a foreign market. 7-Eleven put their
stores in several countries and has done with many countries dream
of doing, and they have entered market in a foreign country and
have become so submerged that many people do not even know that
they are not an American company.
7-Eleven employed adapted global marketing, but continued to
open stores in more countries. 7-Eleven has adjusted their
marketing strategy for each of the international markets they are
targeting, which in turn has helped them gain a larger portion of the
market. 7-Eleven has benefited by this due to them being a premier
player in the market for as long as they have. People love that 7-
Eleven has items that are tailored to their desires.

7-Eleven’s Indonesia operation was run by a local operator, PT Modern Internasional.

Contrary to its American counterpart that capitalized on to-go items and late night
munchies, 7-Eleven in Indonesia became a trendy hangout spot for locals.

It offered traditional 7-Eleven items like Slurpee and snacks together with fresh local
food and alcohol. It was very popular with university students especially among
those between 18-25 years old.

It was a place for them to hang out at all hours of the day and night with free Wi-Fi
and possibly a bite to eat.
As the business took off, Modern Internasional soon started to expand within the
capital, Jakarta.

It opened its 21st store by 2010 and it hit 100 locations in 2012. In 2014, the
company hit peak sales of around 78 million with 190 stores. The future of 7-Eleven
in Indonesia seemed promising indeed.

The stores remained crowded but there was one problem: People weren’t spending
money in it.

Even though there were huge crowd in 7-Eleven, consumers would just buy one drink
and sit for hours. The company also attributed its lack of sales to intense
competition from existing and new competitors such as FamilyMart and Alfamart.

Regulatory issues also posed a major problem for 7-Eleven. In 2015, Indonesia
banned the sale of alcoholic beverages in convenience stores and mini markets.
After the alcohol ban took effect, 7-Eleven’s net sales dropped by nearly 24% over the
next year.

Japanese Yen can be withdrawn with your credit card at the Seven Bank ATM within 7-
ELEVEN stores.

To maintain their sales in Indonesia, they could introduce an idea, say

People could only get free wifi if their bill amount was more than a specific amount.

Southland licensed a Japanese affiliate in 1973, and by 1974 there were

5,000 outlets worldwide. The company expanded beyond food, drink, and
conveniences into other fields, purchasing such businesses as Chief Auto
Parts (1978). Because many of its stores also served as automobile filling
stations, Southland bought CITGO Petroleum in 1983 as a supplier. The
company sold off 50 percent of its stake in CITGO in 1986.
Since its establishment in 1973, Seven-Eleven Japan (SEJ) has always closely tracked changes
in society and consumer lifestyles and has taken steps to enhance its own operations to
meet emerging trends. SEJ continues to implement reforms to support continued progress.
SEJ is aiming to meet customer needs with an expanded range of services and to
increasingly offer “close by convenient stores.”
7 Eleven works on the basis of franchises and licenses in the world