abhishreshthaa
Abhijeet S
1. The forms in retailing industry structure are compared on the following parameters.
Control that the owners exercises over the retail unit
2. Flexibility that an individual retail outlet enjoys in terms of its target market, its location, store hours, product assortment and/or the prices it changes.
3. Economies of scale that the particular type of retailer enjoys, in terms of supply and purchase economies (achieving bargaining powers with suppliers gaining distribution rights for new items as they are introduced, getting service and selling support, getting reorders filled promptly, access to advertising media), operational economies (cost efficiencies), automation, managerial economies and/or risk-bearing economies.
4. Long run planning
5. Competition faced by each type of retailers.
1. Control Direct control of strategy, image and consistency; centralized decision-making *Reduced managerial control because of geographical dispersion.
*A level of centralized or coordinated purchasing & decision making is seen.
* Lack of communication & time delays affect making & implementing decisions
2. Flexibility Enjoy flexibility in location & strategy Limited flexibility as well established norms have to be followed
3. Economies of Scale Few, even if & only if operating on a large scale Efficiency in multiple store operations through shared warehousing facilities, volume purchases, centralized decision-making as regards personnel, purchasing, pricing,
advertising, sales training & financing policies
4. Long Run Planning Owner intimately involved in daily operations, therefore responsiveness to new legislation, products & competitors suffers Considerable time & resources are devoted; even specific personnel are there who assigned this task
5. Competition High because of
* Ease of entry
* Low capital requirements (as compared to CRC)
* Simple licensing provisions •Lower because investment costs are high Individual outlets face competition from players offering similar assortment of goods/services
6. Leading Concerns * Identification of successors
* Roles & dependence on no-family employees
* Management training for family members
In addition to maintaining consistent retail marketing strategies in all branches, adapting to local needs of the target market
1. Control High degree of control exercised by the franchisers, esp. through the contractual agreements High degree of control exercised by the leaser resulting into inflexibilities described further
2. Flexibility Contract provisions limit the franchisees' flexibility, e.g. by enforcing centralized purchases through franchisers or purchases from certain approved vendors Limited in terms of hours for which the department is open and in terms of operating style & offering which are influenced by the parent store
3. Economies of Scale High, due to volume purchases by the overall firms and due to cooperative marketing programs LDs are used by existing store-based retailers to broaden merchandise & service offerings into product categories requiring highly specialized skills or knowledge not possessed by retailers themselves• LDs pay for inventory, personnel, security equipment & outside display window expenses
4. Long run Planning Limited involvement of the franchisees in the strategic planning process Not at all influenced by the interests of the LDs alone
5. Competition None from own firm as they get exclusive selling rights for specific geographical territories Care is taken that LDs do not live off the traffic generated by other parts of the store
6. Leading Concerns *Termination or non-renewal of franchises
* Franchises cannot be sold or passed on to heirs without approval from the franchiser *Raise in rent
* Renewal once leases expire
* In-store locations may not generate expected sales
7. Leading concerns for each type of retailers.
Control that the owners exercises over the retail unit
2. Flexibility that an individual retail outlet enjoys in terms of its target market, its location, store hours, product assortment and/or the prices it changes.
3. Economies of scale that the particular type of retailer enjoys, in terms of supply and purchase economies (achieving bargaining powers with suppliers gaining distribution rights for new items as they are introduced, getting service and selling support, getting reorders filled promptly, access to advertising media), operational economies (cost efficiencies), automation, managerial economies and/or risk-bearing economies.
4. Long run planning
5. Competition faced by each type of retailers.
1. Control Direct control of strategy, image and consistency; centralized decision-making *Reduced managerial control because of geographical dispersion.
*A level of centralized or coordinated purchasing & decision making is seen.
* Lack of communication & time delays affect making & implementing decisions
2. Flexibility Enjoy flexibility in location & strategy Limited flexibility as well established norms have to be followed
3. Economies of Scale Few, even if & only if operating on a large scale Efficiency in multiple store operations through shared warehousing facilities, volume purchases, centralized decision-making as regards personnel, purchasing, pricing,
advertising, sales training & financing policies
4. Long Run Planning Owner intimately involved in daily operations, therefore responsiveness to new legislation, products & competitors suffers Considerable time & resources are devoted; even specific personnel are there who assigned this task
5. Competition High because of
* Ease of entry
* Low capital requirements (as compared to CRC)
* Simple licensing provisions •Lower because investment costs are high Individual outlets face competition from players offering similar assortment of goods/services
6. Leading Concerns * Identification of successors
* Roles & dependence on no-family employees
* Management training for family members
In addition to maintaining consistent retail marketing strategies in all branches, adapting to local needs of the target market
1. Control High degree of control exercised by the franchisers, esp. through the contractual agreements High degree of control exercised by the leaser resulting into inflexibilities described further
2. Flexibility Contract provisions limit the franchisees' flexibility, e.g. by enforcing centralized purchases through franchisers or purchases from certain approved vendors Limited in terms of hours for which the department is open and in terms of operating style & offering which are influenced by the parent store
3. Economies of Scale High, due to volume purchases by the overall firms and due to cooperative marketing programs LDs are used by existing store-based retailers to broaden merchandise & service offerings into product categories requiring highly specialized skills or knowledge not possessed by retailers themselves• LDs pay for inventory, personnel, security equipment & outside display window expenses
4. Long run Planning Limited involvement of the franchisees in the strategic planning process Not at all influenced by the interests of the LDs alone
5. Competition None from own firm as they get exclusive selling rights for specific geographical territories Care is taken that LDs do not live off the traffic generated by other parts of the store
6. Leading Concerns *Termination or non-renewal of franchises
* Franchises cannot be sold or passed on to heirs without approval from the franchiser *Raise in rent
* Renewal once leases expire
* In-store locations may not generate expected sales
7. Leading concerns for each type of retailers.