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Chp 4 : Retail Institution by ownership, a)Ownership, Definition: - Coggle…
Chp 4 : Retail Institution by ownership
Leased Department :
• A leased department is a department in a retail
store that is rented to an outside party
Classification Method
Advantages:
Personal image
Consistency and
independence
Strong entrepreneurial
leadership
Flexibility in formats,
locations, and strategy
Control over investment ,costs and personnel, functions, personal image
Disadvantages
Lack of economies of scale
Over-dependence on owner
Labor intensive operations
Limited long-run planning
Lack of bargaining power
b) Store-based Retail Strategy Mix:
Food-based superstore
Box store
Conventional
supermarket
Warehouse store
Convenience store
c) Non store based
Direct marketing
• Direct selling
• Vending machine
• World Wide Web
Franchising
Definition:
A contractual agreement between a franchisor and a retail franchisee, which allows the franchisee to conduct business under an established name
Franchisee pays an initial fee and a monthly
percentage of gross sales in exchange
Ideal Potential franchise:
Financial resources
A willingness to complete a detailed training program
A willingness to devote full time to day-to-day operations
The ability to manage finances
High personal integrity
A proven ability to motivate and train people
An entrepreneurial spirit and strong desire to succeed
Advantages:
small capital required
acquire well-known names
operating/management skills taught
cooperative marketing possible
exclusive selling rights
less costly per unit
Disadvantages:
oversaturation could occur
franchisors may overstate potential
locked into contracts
agreements may be cancelled or voided
royalties are based on sales, not profit
a)Ownership
Definition: