Page 153 - Accelerating out of the Great Recession

ACCELERATING OUT OF THE GREAT RECESSION

sive access to Seven-Eleven that resulted in increased sales vol-
ume for them.
One well-known example of Seven-Eleven’s codevelopment
process was ice cream products. In 1994, it worked with five
major food companies, including Morinaga and Yukijirushi.
They held “ice cream workshops” twice a month to discuss new-
product ideas. These sessions resulted in the creation of a range
of cobranded products that replaced half the ice cream products
that had previously lined the shelves at Seven-Eleven. In 2000,
Seven-Eleven partnered with Nissin, the top instant-noodle
manufacturer, to codevelop a line of new products and branded
them with the names of famous noodle restaurants. This product
line, which sold exclusively at Seven-Eleven, was extremely suc-
cessful and achieved five times more sales than national brands.
Beyond the codevelopment of products, cobranding also
improved inventory management. Seven-Eleven provided
daily order and inventory data to manufacturers—an unprece-
dented level of information-sharing at the time. This allowed
the manufacturers to adjust their supply quickly in response to
demand shifts.
Seven-Eleven’s wide reach and ability to negotiate exclusive
deals made codevelopment an attractive choice for Japan’s top
manufacturers. Other retailers such as Lawson and Family Mart
adopted a similar private-label and cobranding strategy, espe-
cially after seeing the success of Seven-Eleven’s private-label ice
cream products. However, being smaller in size, and therefore
less attractive to manufacturers, they were less successful.

The Fight in the United States in the Aftermath of the Oil Shock

McDonald’s took the fight to its competitors, particularly
Burger King, during the U.S. oil crisis and recession of the

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