Today in the IT and Markets class we are doing a case on SEJ - 7Eleven Japan.
A very interesting company. Amazing to level of idealistic in many ways! 7Eleven is a convenience store chain that started in Dallas, USA sometime in the early 1900s. In the 1970s the chain expanded into Japan under a partnership with a local Japanese supermarket chain (The biggest at that point), forming 7Eleven Japan aka SEJ. Over the years the trademark Japanese efficiency transformed this company into one of the most innovative trend setting convenience store chain in the world! Eventually when 7Eleven USA was close to bankruptcy, SEJ bailed out the parent company and soon transferred their expertise of logistics, store handling, distribution and planning to the US chain to help them recuperate quickly. However, there is an element of discipline and dedication in Japan, among the Japanese people, that I dont think can be ever replicated by any other populace. 7Eleven USA thus I dont think will ever over take its Japanese offshoot.
I have read so many articles on the retail industry in India. Only 2% of Indian retail is organized, the rest of the 98% is constituted by corner-grocers, mom n pop shops, 'dabba angadi's - a whole array of unorganized retailers. Thus it is being fast projected to the rest of the world that India is the next big retail destination for the Walmarts, Targets, all marts, of the world. This to me first was a scary thought. Maybe the socialist in me (if it does exist). Maybe it was just a protectionist feeling towards my local grocers with whom I have shopped for years. Whatever it was, my first reaction was..No! Walmart and teh likes should nto be allowed to enter the Indian market. They will destroy the local grocers. Put them out of business. What should these people then do for a livelihood. They will be forced to lead a life notches below where they are now. All kinds of these thoughts.
After the initial outburst, my mind seemed to settle down and then call the Capitalist in me if you want, or the capitalists may say - the rationalism in me :) - seemed to kick in. How much would a protectionist attitude help progress, development and growth? Even when bring up kids, parents are adviced to keep an eye on their children, but not be over protective. Let them fall then only they learn to get up and be careful the next time. Isnt this in a way what capitalism preaches. I do not know for sure, as I havent really read much on these theories. But what I do know is that capitalism drives the market towards efficiency. I am reminded of Darvin's theory - "Survival of the Fittest". Why should'nt the same theory apply to economics of a country or a region. Infact many economic theories, ones that have won Nobel prizes over the years seem to be an economic extension of Darwin's throry of evolution. Just like nature, financial and economic markets have an inherent tendency to balance out and settle down. Thye do through peaks and crashes but eventually settle down. Infact everything in this world works towards an equilibrium. Do we ever achieve it, I dont know. Maybe the day we do will be the last day of the universe's existance.
Another instance that comes to my mind now is the 'Brain Drain'. Even until about 5 years back this used to be one of the hottest debate topics in schools and colleges. Civil Service exam essays were based around this topic. Media made a huge hype on the amount spent over each IITian who was leaving India. But 30 to 40 years into that trend all of a sudden the market has evolved in such a way as to cause 'Reverse Brain Drain'. Emigration levels are still higher than Immigration, but nevertheless the trends have set in. If not for external uncontrollable forces such as Govt. policies, regulations, terrorism, et all, my guess would be that the world would soon become a seamless market with hubs of activities being created wherever they are most efficient at that point in time. A fluid, ever moving and changing - a flux.
Coming back to where I started. After all these thoughts went through my mind, I came to the conclusion that my initial stance was not right. It was not in the line of natural evolution. The fittest will survive, and that is how nature works. And it is amazing how the ways of nature apply even to man-made things such as financial and economic markets!!
Well..what do I say..Nature Rocks!! :)
A very interesting company. Amazing to level of idealistic in many ways! 7Eleven is a convenience store chain that started in Dallas, USA sometime in the early 1900s. In the 1970s the chain expanded into Japan under a partnership with a local Japanese supermarket chain (The biggest at that point), forming 7Eleven Japan aka SEJ. Over the years the trademark Japanese efficiency transformed this company into one of the most innovative trend setting convenience store chain in the world! Eventually when 7Eleven USA was close to bankruptcy, SEJ bailed out the parent company and soon transferred their expertise of logistics, store handling, distribution and planning to the US chain to help them recuperate quickly. However, there is an element of discipline and dedication in Japan, among the Japanese people, that I dont think can be ever replicated by any other populace. 7Eleven USA thus I dont think will ever over take its Japanese offshoot.
I have read so many articles on the retail industry in India. Only 2% of Indian retail is organized, the rest of the 98% is constituted by corner-grocers, mom n pop shops, 'dabba angadi's - a whole array of unorganized retailers. Thus it is being fast projected to the rest of the world that India is the next big retail destination for the Walmarts, Targets, all marts, of the world. This to me first was a scary thought. Maybe the socialist in me (if it does exist). Maybe it was just a protectionist feeling towards my local grocers with whom I have shopped for years. Whatever it was, my first reaction was..No! Walmart and teh likes should nto be allowed to enter the Indian market. They will destroy the local grocers. Put them out of business. What should these people then do for a livelihood. They will be forced to lead a life notches below where they are now. All kinds of these thoughts.
After the initial outburst, my mind seemed to settle down and then call the Capitalist in me if you want, or the capitalists may say - the rationalism in me :) - seemed to kick in. How much would a protectionist attitude help progress, development and growth? Even when bring up kids, parents are adviced to keep an eye on their children, but not be over protective. Let them fall then only they learn to get up and be careful the next time. Isnt this in a way what capitalism preaches. I do not know for sure, as I havent really read much on these theories. But what I do know is that capitalism drives the market towards efficiency. I am reminded of Darvin's theory - "Survival of the Fittest". Why should'nt the same theory apply to economics of a country or a region. Infact many economic theories, ones that have won Nobel prizes over the years seem to be an economic extension of Darwin's throry of evolution. Just like nature, financial and economic markets have an inherent tendency to balance out and settle down. Thye do through peaks and crashes but eventually settle down. Infact everything in this world works towards an equilibrium. Do we ever achieve it, I dont know. Maybe the day we do will be the last day of the universe's existance.
Another instance that comes to my mind now is the 'Brain Drain'. Even until about 5 years back this used to be one of the hottest debate topics in schools and colleges. Civil Service exam essays were based around this topic. Media made a huge hype on the amount spent over each IITian who was leaving India. But 30 to 40 years into that trend all of a sudden the market has evolved in such a way as to cause 'Reverse Brain Drain'. Emigration levels are still higher than Immigration, but nevertheless the trends have set in. If not for external uncontrollable forces such as Govt. policies, regulations, terrorism, et all, my guess would be that the world would soon become a seamless market with hubs of activities being created wherever they are most efficient at that point in time. A fluid, ever moving and changing - a flux.
Coming back to where I started. After all these thoughts went through my mind, I came to the conclusion that my initial stance was not right. It was not in the line of natural evolution. The fittest will survive, and that is how nature works. And it is amazing how the ways of nature apply even to man-made things such as financial and economic markets!!
Well..what do I say..Nature Rocks!! :)
posted by Chaitra Chidanand at 1:56 PM
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