FamilyMart: Responses to Competitive Rivalry in the Convenience Store Market in Taiwan

Abstract

At the end of April 2005, the 7-Eleven Corporation, with 6 months preparation, invested around $200 million N.T. dollars (NTD) ($6.35 million USD) to implement an innovative and integrated instore marketing campaign by rewarding customers with an exquisite 3D Hello Kitty magnet and coupons for 118 commodity items when they spent as much as $77 NTD ($2.44 USD). This distinguishing competitive action gained much feedback in the market. In less than 1 month, 7-Eleven had distributed 40 million Hello Kitty magnets to customers. Further, 7-Eleven forecasted that its revenue in May would reach its highest peak in recent years. In contrast, other convenience store chains had faced a 20% decline in estimated returns. Considering these challenges, how can one analyze the competitive environment in convenience store industry faced by the FamilyMart? How should FamilyMart react to 7-Eleven's promotion?