Never selling the products which customers can find in chain supermarkets
759 Store differentiates itself from other competitors by providing uncommon products in the market. 759 Store cannot race their cost to the bottom when compare with ParknShop and Welcome, the two well established cost leaders. In order to survive under the oligopolistic market, the company differentiates itself by avoid selling the same products that the two major supermarkets are already selling. 759 Store would rather search for new products instead of competing directly with those supermarket chains.
By selling different brands and types of snacks, customers cannot use the retail price to directly compare the products in 759 Store and supermarkets.…show more content… in 2011 ,one of the local biggest distributor, Swire Group, refused to supply Coca-Cola to the store, claiming its retail price was too low which would harm supermarkets‘ profit . After the incident, packaged-snacks imported directly from Japan accounted for over 60% of the main sales of 759 Store.Therefore, Coils Lam Wai-Chun, the CEO of 759 Store, have handled business connections with Japanese suppliers with great care. He has connected the first Japan snacks supplier in HKTDC Food Expo in 2011 by himself. Thus, 759 Store provides exclusive products which cannot be found in its competitors‘stores.
Higher autonomy on goods selection through bypassing local distributors
Today, more than 95% of products sold at 759 Store are imported directly bypassing distributors in Hong Kong.
Therefore, 759 Store enjoys greater autonomy on deciding the variety of products they sell. 759 Store successfully develops a new market segment providing new and popular Japanese snacks to Hong Kong people. The self-reliance nature of 759 Store in terms of product purchasing enables the company to maintain its unique…show more content… By becoming companies‘ own supplier, business can control its inputs and help them to provide more secure transaction.
Due to the exclusive culture of the Japanese snack production industry, Japanese companies only supply their goods to local companies. To address this problem, 759 Store has to set up their shadowing companies in Japan to take up the functions of distributors. As 759 stores purchase the goods directly from the snack manufacturers without passing through any distributors and wholesalers, they could enjoy a lower import price and maintain a steady input supply by themselves. This in turn reduces the overall cost of production by integrating different business stages of business functions
Effective inventory management
The storage and management of inventories could be a huge source of expenditures for retailers. Packaged snacks are perishable and thus requires accurate inventory management In order to reduce inventory cost while diversifying its products, for each new product, 759 Store would first import 2400-3000 pieces of them to Hong Kong. The company then experiments the market reaction to the product and decides whether to import the product in bulk or