Case Study of 7-Eleven &

Analysis of “Are you sure you have a strategy” Article

by Hambrick and Fredrickson (2001)

Submitted by

Chue Yadanar Linn

65190274
 1. What are the key insights from Hambrick and Fredrickson's article regarding the
challenges organizations face in maintaining strategic clarity?

The article “Are you sure you have a strategy” by Donald C. Hambrick and James W. Fredrickson
outlined several challenges that organizations encounter in maintaining strategic clarity. The challenges
include a narrow focus on tools, fragmentation of strategy, misinterpretation, strategic confusion, and a
lack of integration within the strategic framework. The absence of a cohesive strategy can lead to
confusion between the fragmented strategies and result in the complexity of multiple strategies, and
ultimately diminish the organization’s credibility.
The utilization of strategic analysis tools or frameworks, such as Porter's five-forces analysis or
game-theoretic frameworks, to analyze the strategy has narrowed down the scope of the strategy and can
lead to a limited understanding of strategy, preventing organizations from seeing the broader picture and
undermines the coherence of the organization's overall direction. In addition to the narrow focus,
organizations tend to focus more on specific strategies, such as pricing, capacity decisions, or R&D
budgets, which are termed as strategic threads in this article. Executives may communicate a multitude of
strategic threads to their organizations without providing a clear, integrated vision of how these threads fit
together to achieve the organization's objectives, leading to disjointed initiatives that fail to align with
overarching goals. This fragmentation of strategy into isolated elements or components can create
confusion and a lack of clarity about what strategy actually entails, making it difficult for organizations to
maintain a clear, integrated strategy, covering all the elements.
Without a clear strategy, organizations may waste time and resources on various activities, fail to
differentiate themselves in the market, and struggle to build compelling economic logic. Overall,
maintaining strategic clarity requires organizations to overcome these challenges by developing a clear,
integrated vision of their strategy and aligning all of its elements with overarching goals and
objectives. The examples of Sears and Xerox vividly illustrate the consequences of lacking a coherent
strategy.
According to the article, a strategy is not just a mere strategic thread, which describes only a
declaration. Rather, an integrated strategy is a means to implement and deliver the objectives of the
company or the organization. An integrated strategy should cover the five core elements of arenas,
vehicles, differentiators, staging, and economic logic, addressing the following questions to eliminate the
confusion, uncertainty, and complexity of the fragmented strategy.
• Arenas: Where will we be active?
• Vehicles: How will we get there?
• Differentiators: How will we win in the marketplace?
• Staging: What will be our speed and sequence of moves? And finally,
• Economic Logic: How will we obtain our return?
 The strategy diamond, developed by Donald Hambrick and James Fredrickson, represents a
collection of five elements that form a coherent business strategy. It provides a framework for covering all
of the important elements of a strategic plan by clearly identifying the arenas, vehicles, differentiators,
staging, and economic logic.
Therefore, most challenges, ambiguity and fragmentation of the business strategy and the
framework, providing insights into the five elements to gain strategic clarity are discussed in the article
along with the examples, showcasing the comparison of having and lacking the strategic clarity.

2. How does the chosen organization align with or deviate from the principles of strategic
clarity outlined in the article?

7-Eleven is a global convenience chain store known for its round-the-clock accessibility, diverse
product offerings, and strategic locations catering to urban and suburban consumers’ everyday needs. The
overall strategy of 7-Eleven can be observed both alignment and deviations from the principles of strategic
clarity outlined in the article, in terms of the five elements of arenas, vehicles, differentiators, staging and
economic logic. The analysis of the clarified strategy integration of 7-Eleven under the Strategy Diamond
framework is as follows:

7-Eleven clearly defines its arenas by focusing on convenient locations in urban areas and targeting
students, busy individuals, and travelers, who require quick and readily available products. 7-Eleven has its
strong global presence across more than 20 countries, retailing a wide range of convenience goods at
cheap and reasonable prices. It utilizes franchising as a vehicle for rapid expansion and it also adopts
convenience store format, mobile application and delivery, and vending machine model for quick service,
aligning with its chosen arenas and target markets. It establishes clear differentiators through 24/7
operations, a diverse localized product offering, and its franchise model, all of which offer convenience and
accessibility to customers. However, despite its global presence, it does not offer the same and consistent
loyalty program for all the franchises. As for staging, 7-Eleven utilizes a franchise model to expand rapidly.
Once it initiates expansion in one country, multiple stores quickly follow suit, driven by its unique focus on
accessibility. Lastly, the franchise of 7-Eleven has a clear economic logic, practicing high-volume sales with
relatively low margins. However, in order to meet its economic logic of high-volume sales with relatively
low margins, its franchise has different partners for staging in different countries, to localize the customers’
need and save transportation costs.
Therefore, 7-Eleven exhibits an alignment with the diamond framework and has an overall strategic
clarity under the framework of Strategy Diamond developed by Donald C. Hambrick and James W. However,
there may be variations or potential deviations in how franchisees operate in different countries, owing to
cultural differences, regulatory requirements, or variations in franchise agreements.

3. What strategic ambiguities did you identify in the chosen organization, and how might
these impact its performance?

The strategic ambiguities of 7-Eleven lie in its product offering, loyalty programs and promotions
of Differentiators, human resource management, and partnership and collaboration from the staging
aspect and pricing strategy under economic logic.
7 Eleven has a business strategy of localization, catering to the local customers’ needs and wants.
For example, 7 Eleven in Thailand offers its products and offerings by localizing the Thai consumer market
and environment. Since Thailand has hot weather, 7 eleven in Thailand does not offer hot menus, such as
hot udon noodles found in Japanese 7 Eleven. Instead, it mainly promotes and sells ice cubes and cold
drinks to match the taste of Thai customers. Some menu offerings, such as made-to-serve menus, are
selectively available at certain 7-Eleven locations, but not universally offered across all stores in the same
region. Likewise, there are different localized product offerings which vary depending on the store size,
customer base and the country. Although this strategy can differentiate 7-Eleven from its competitors, on
the other hand, it also creates inconsistency and complex product offerings across different franchises
depending on its size and location.
The next differentiator ambiguity of 7 Eleven strategy lies in its loyalty programs and promotions.
Despite its franchise model, it has different loyalty programs for different customer bases. For example, 7
Eleven in Thailand has different points collection and promotion or reward system from 7 Eleven in the
United States. Therefore, it can create confusion among customers, especially for the travelers of targeted
customers since they cannot utilize their loyalty program in every franchise store of 7 Eleven.
The franchises of 7-Eleven may also have various human resources management practices for
staging across different regions or countries due to factors such as local labor laws, cultural norms, and
business strategies, tailored to specific markets. Hence, its HR practices can be diversified in the aspects
of recruitment and hiring processes, employee training, performance management systems, and working
conditions. For instance, performance appraisal is an important tool for providing feedback to employees,
as it identifies improvement areas and helps employees align with organizational objectives. However,
according to the research article, 7 Eleven in Thailand has insufficient quantitative indicators for a
performance appraisal system for employees (YIFANG, 2020). This points out the different HR practices
across different franchises of 7-Eleven stores.
The rapid staging of 7-Eleven’s franchise model has brought up its chain stores in 20 countries and
consequently, it has different partners for suppliers, banking facilities and other operations catering to
customers’ needs and convenience. This has enhanced its performance regarding the transportation of
supply chains based on the nearest or local retailing and more convenient payment facilities for the
customers. However, on the other hand, it also creates different supplies across different countries and
inconsistent payment choices for customers. For example, during the Covid-19, only 7 Eleven stores in
Japan developed and utilized automated cash registers. The remaining stores in other countries did not
adapt to it and they kept using their own specified payment methods.
Regarding the pricing strategy of 7 Eleven, it has developed a pricing model based on the location,
currency, and cost of the supply chain in each country and region. The different pricing of the product can
be found in comparison between 7 Eleven in the United States and Thailand. In addition, the different pricing
strategy by location can be observed in the 7 Eleven stores located in ordinary residential areas compared
to those located at premium places, such as airports. Therefore, this inconsistent pricing strategy, with a
slight pricing difference, can create confusion among the customers.

4. What are the potential consequences of strategic ambiguities on decision-making,

The strategic ambiguities of 7-Eleven can have potential consequences in the aspects of decision-
making, employee engagement, and the organization’s competitive position.
The ambiguities in its differentiators have significant impacts on its competitive position, product
management and decision-making for customer loyalty programs. The tailored product offering can bring
competitive advantage and position to 7-Eleven in its convenience store market for its consumer oriented
approach in offering the products and services through its localized product offerings, specific loyalty
programs and promotions, while convenient premium pricing ensures the affordability of the customers.
However, tailoring products to local preferences can increase the complexity of managing diverse product
lines across regions. Similarly, different loyalty programs and promotions can create complexity in tracking
and managing a diverse set of programs for customers, particularly among travelers, who are also a
targeted customer segment of 7 Eleven.
The ambiguity in human resource management can have a potential impact on employee
management and decision making of the organization. For its franchises across 20 countries, each of its
franchises is required to adapt to its local labor law, and regulation requirements and it results in the
different Human Resource practices and management of the organization. As an example, mentioned
above, the diverse HR procedures, such as weakness in the performance appraisal system of Thailand can
negatively affect the Thailand employee’s experience, engagement, and alignment with organization’s
goals. Therefore, the ambiguity in human resource management enables tailoring practices to local needs
and legal frameworks while it can potentially lead to inconsistencies in employee experience and
management across franchises.
The ambiguities of pricing strategy regarding its economic logic enable the 7-Eleven stores
worldwide to make specific pricing decisions for their products based on factors such as suppliers,
logistics, and economic conditions. This pricing tactics allows for local adaptation and competitiveness,
but it can also impact pricing and value differently across regions. Moreover, it also enables the 7-Eleven
franchises in different countries to have some degree of freedom in decision-making and choosing their
partners and collaborators, which would contribute to their operations at lower costs. This enhances
flexibility and responsiveness to local demands. However, it can also present challenges in ensuring
standardized quality and consistency across the network.
Therefore, the ambiguities in business strategies can bring both positive and negative impacts
towards the decision making for business operations, employee management and engagement, and
organization’s competitive position.

5) Based on your analysis, what specific recommendations would you propose to enhance
strategic clarity within the chosen organization?

To enhance the strategic clarity of 7 Eleven, while maintaining a balance between flexibility and
consistency in its operation, it is recommended to improve the human resource management system,
foster collaboration and information sharing among franchises and initiate centralized loyalty programs,
while maintaining the consumer centric approach, and affordability in pricing strategies.
Loyalty programs and promotions are important to keep the customers and repeat sales. However,
7 Eleven stores have different membership offerings, which hinders the customers from seamless
experience. For example, Grab, a ride-hailing application, operates in multiple countries, including
Singapore, Malaysia, Thailand, and Myanmar. It has its own single official website that covers its market
presence in all the operating countries. According to its official website, it also establishes a consistent
membership loyalty program, and the same system in point collection of its members. For example, it is
clearly stated in its website that for every 10 Thai baht spent on the ride, the customer will receive 1 point,
and similarly, for every 1,000 Myanmar kyats spent on the ride, it will give 1 point. This simple and integrated
membership program and marketing strategy allow customers to access their existing membership
regardless of their geographical location. Whereas, 7 Eleven practices inconsistent and different mobile
applications, which keeps record of the customers’ membership. Hence, to reduce the complexity of loyalty
programs in different operating markets and maintain more loyal customers despite the geography
difference, a centralized loyalty program, which offers consistent benefits and rewards across all 7-Eleven
locations should be implemented to simplify program management and provide a seamless experience for
customers regardless of their location.
Since local adaptation and product tailoring contribute to 7 Eleven's competitive advantage, 7-
Eleven should focus more on ensuring the standardization and quality control of the products to stay
differentiated in the market. However, it is also recommended to offer the innovative and same made-to-
serve menus consistently across every store in the same region for the equal accessibility of the product
offerings for the customers in the same region.
The convenient pricing strategy basically enables the affordability of the customers in purchasing
7 Eleven products, enables the franchisors to adjust pricing based on the varying factors, however, it is
recommended to consistently charge the same price within the same region, as mentioned in the above
example of pricing difference between 7-Eleven stores in residential areas and premium places. Hence, this
can eliminate the confusion among customers for different pricing of the same products in different
locations within the same region.
Regarding the ambiguity and inconsistency in human resource management practices across 7-
Eleven franchises in different regions, improving the HRM practices through enhanced training and support
from the franchisor is recommended to ensure the ethical, reliable, and systematic HR procedures in all
levels of franchises. Moreover, the communication between headquarters and franchisees should also be
strengthened through regular updates, training sessions, and feedback mechanisms to ensure the
alignment with strategic objectives, consistent HR practices and minimize ambiguity in decision-making.
Finally, it is recommended to invest in technology and tools and develop digital platforms, which
can facilitate communication, collaboration, and data sharing between the franchisor and franchisees, to
enhance communication, improve transparency and enhance decision making processes. Digital tools and
resources should be provided to support franchisees in implementing localized strategies effectively.
In conclusion, the recommendations proposed aim to enhance strategic clarity within 7 Eleven by
addressing key areas of ambiguity and inconsistency identified in its operations. By initiating centralized
loyalty programs, implementing standardized pricing strategies, improving human resource management
practices, and fostering collaboration among franchises, 7 Eleven would achieve a balance between
flexibility and consistency while maintaining its consumer-centric approach. These initiatives will not only
streamline operations but also ensure alignment with strategic objectives, enhance customer experience,
and strengthen the organization's competitive position in the convenience store market. In addition,
investing in technology and digital platforms will facilitate communication, collaboration, and data sharing
between the franchisor and franchisees, further enhancing strategic clarity and decision-making
processes.

References
7eleven. (n.d.). 7REWARDS. Retrieved from [Link] [Link]
[Link]/7rewards

Grab Rewards. (n.d.). Retrieved from Grab: [Link]

Hambrick, Fredrickson, J., & Donald. (2001). Are You Sure You Have a Strategy? Academy of Management
Perspectives, 15. doi:10.5465/AME.2005.19417907

Live Extra with GrabRewards. (n.d.). Retrieved from Grab: [Link]

TheJapanChannelDcom. (2021, February 5). Automated Payment at a Japanese Convenience Store.

YIFANG, L. (2020). RESEARCH ON BUSINESS STRATEGY OF 7-ELEVEN IN THAILAND. Independent Study.

พิเศษสำหรั บคุณ. (n.d.). Retrieved from [Link]: [Link]