Advantage and Disadvantages of Different Retail Business

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Retail Management 3rd assignment
Rahul Nakarmi
Silver Mountain Graduate Business School
Retail Management, Semester 5
Sachin Karanjit
Feb 11, 2013

Advantages and disadvantages of different retail business
There are various forms of retail and among them classification based on ownership seems quite popular. There types based on this are independent, chain and franchise retailer. Personally the example of independent retailer (small retail outlet) is one near my house which owned by a Gurung couple and is a small store that sells variety of food products from vegetables to small candies such as coffee bite and so on. The major advantages of them in view are that they can control over whole management of the store such as planning, organizing and so on making decisions very easy to perform. Furthermore, they are usually at the front desk so they have an usual interaction so there would most certainly be high customer relationship mad sometime may result in loyal customer followings. Also I think that the profit they receive goes to themselves only and to no one else, so less sharing and initial I also think that they had easily opened up their shop which less hassle. In addition I also believe that they can change their layout at will and also can develop themselves, further i.e. character wise such as in leadership. On the flip side, being such a small retail outlet means the couple who own cannot bargain with powerful suppliers such as Coke, Wai wai and others. Also all the shifting of goods and all the menial labor has to be conducted by themselves and if labor is hire extra cost is there. And also when either of the couple is sick or unhealthy or is busy with family the chop closes so which means valuable business time and customers may get lost this is I think is the most harming disadvantage business wise. In terms of chain retailer (many outlets)the example that comes to mind is big mart which has outlets in Lazimpat, Baneshwor and inside City centre. And is a store that provides wide variety of products from food to clothing and other miscellaneous stuffs as well. And there various advantages of having such retail outlet the major being the range of customers are widened. Another advantage of it is that many sophisticated technologies such as bar code scanner, software are used in maintaining the inventory thus, ensuring efficiency in providing products in required time frame. Also if the ownership is of single nature then certainly the profits or gains will be received by that single owner. Furthermore, such establishment may have been created with a look to the future or in plain words done for a long term goal in mind. Moreover, with a single ownership mean the decision conducted can be simple as only one makes important decisions. Finally it also means that this store has a greater bargaining power over supplier if it is a big store which I think is. But the downside of having such a outlet is threat there is less chance to make good decision for instance if Big mart recently bought a land and established a store in that land, but if was later found that the land next to is cheaper . This forms some sort of dilemma in decision making. Another disadvantage or in my view the major one is that the investment cost or the capital required is extremely high as many outlets need to be opened. Also for these many outlets many staffs are needed meaning more control so it is always tough for a single person to look after all efficiently. Lastly, the most common of franchise (different ownership, parent’s company’s brand image, product is used.) in Nepal, is Pizza hut. Its major advantage is of its famous brand name as people flock to it due to its reputation of serving great pizzas. Also the franchisee (individual that runs parent business), needs low amount of capital to start but has to abide by the condition of the franchisor (parent business). Furthermore, the franchisee also learns about new operations of...
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