Your classmates are a group of friends who have decided to open a small retail s

Question

Your classmates are a group of friends who have decided to open a small retail shop. The team is torn between two storefront ideas. The first idea is to open a high-end antique store, selling household items used for decorations in upscale homes. Members of the team have found a location in a heavily pedestrian area near a local coffee shop. The store would have many items authenticated by a team member’s uncle, who is a certified appraiser. In discussing the plan, however, two group members suggest shifting to a drop-off store for online auctions such as eBay. In this business model, customers drop off items they want to sell, and the retail store does all the logistics involved – listing and selling the items on eBay, and then shipping them to buyers – for a percentage of the sales price. They suggest that a quick way to get started is to become a franchisee for a group such as “I Sold It” (www. 877isoldit.com).

Questions

a. What is the business strategy for each store concept?

b. How would the organizational structure be different for the concepts?

Explanation / Answer

The business strategy for an offline store will include studying the catchment area, competition in that area and neighbourhood, customer likeliness of making the purchase and having inviting store interiors. The strategy will involve the frequency of supply and the turnaround time of selling the goods at the store. For enaging customers, promotional activities as well as a product range catering to customer choices need to be built over time.

For online store, the platforms on which the online store will function needs to be determined along with the potential customer reach and competition. This is important as based on the customer reach, the products will be sourced and sold and auctioned from the website. Since these are high end antique items there will be customer apprehensions for purchasing the same which needs to be addressed by having clear product images, details and flexibility to accomodate customer demands. The logistics costs will be determined by the amount of business transaction. The business will need to constantly innovate promotional strategies and product line to keep building the customer interest.

The organizational structure for the offline store will include a business management team, a store manager, store staff including cashier and customer service exceutives attending customers in the shop. The store manager will report to the business management team. The store staff will report to the store manager. The business management team with the help of store manager can handle HR activities like staff recruitment and salary distribution. The product sourcing and marketing activities will also be functions handled by business management team. The store manager will also act as a customer service manager addressing the customer problems.

For the online store, the organizational structure will include a business management team involved in hiring, planning and marketing activities. Reporting to the business management team will be an Online merchandiser who will be involved in listing the products across various portals and determining the auction timings and management. The online merchandiser will address the customer concerns as well as determine the look and feel of the website. There needs to be a logistics staff reporting to the online merchandiser for timely shipping and delivering the goods to the customers or sourcing the same from the customers.

Taking a franchisee for a group "I sold it "will give the business a brand name the customers can identify with and will get guidance for managing the business. It will depend on the sales and revenue goals of the business the strategy they want to choose to run the business.

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