The Question : ‘In the real life market conditions, there are some retail shops which are owned and operated by same parent organisation and have identical merchandising strategies’. Identify these types of ‘retail shops’. Also, discuss any four advantages of such ‘retail shops’.
Solution for the question :
Multiple –Shops
Advantages of Multiple Shops are:
(a) Economies of Scale: As there is central procurement, the multiple-shops enjoys the economies of scale.
(b) Elimination of middlemen: By selling directly to the consumers, the multipleshop organisation is able to eliminate unnecessary middlemen in the sale of goods and services.
(c) No bad debts: All the sales in theses shops are made on cash basis ,there are no losses on account of bad debts.
(d) Diffusion of Risk: The losses incurred by one shop may be covered by profits in other shops, reducing the total risk of an organisation.
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