Strategy Choices of Convenience Store Chains in China, with Particular Reference to Seven-Eleven and FamilyMart

Two large Japanese convenience store chain (CVS) companies, namely Seven-Eleven Japan and FamilyMart, began to set up businesses in China in 2004, both companies following entirely different strategies. FamilyMart chose a team management strategy which has two outstanding characteristics. First, it has been fully utilizing the resources of FamilyMart’s Taiwan subsidiary and second, FamilyMart invited the Ting Hsin International Group (of Taiwan) to act as its partner in the subsidiary company. By contrast, Seven-Eleven Japan built up its China subsidiary almost wholly by itself, a policy that can be described as a managing-alone strategy. The paper argues that the differences in strategy stem fundamentally from differences in the two companies’ experience of international management and from the knowledge derived from that experience. FamilyMart has considerable experience of building up joint ventures in Asian countries and has accumulated resources in its Taiwan subsidiary. Seven-Eleven Japan has strong confidence in its business model because of its remarkable performance in Japan and its success in rehabilitating the chain in the United States. The paper also illustrates that the choices of strategy have been shaped by the companies’ interactions with two Taiwanese business groups, namely the Ting Hsin International Group and the President Group. Furthermore the evidence discovered by the research indicates that FamilyMart’s strategy enabled the company to build up its operations more quickly than the policy adopted by Seven Eleven Japan. Although Seven-Eleven Japan’s strategy is a more time-consuming way of setting up a CVS business, the approach offers a stronger possibility of establishing a more efficient and more transparent business model than do the approaches followed by the other CVS chains.