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).

c. What would likely be the cultural differences in the two store concepts?

d. How would the control-and-reward systems be different?

Explanation / Answer

c. The major cultural difference is that the first idea of opening a high end antique store selling household items need good market location where people usually come for buying household products. The items must be different and unique to attract the customers. Buyers from different areas, age, races and ethnicity may come to the store and have different choices depending on their culture. While in the second option of starting a retail selling store or a franchisee of groups like ‘I sold it’, the cultural difference do no matter much. People simple put their products on auction and may go. The concept of choice do not exist. Business can easily grow if people used to find good prices for their products and an easy place to sell their used belongings.

d. The control and rewards system will be very different in both the cases. In starting and antique shop, a team of two-three must be there in the shop to handle the customers and operations. They must be hired on a regular salary basis. While, in selling store one person may be enough to control the operations as he will be only taking the products from the customers and giving them their sales amount. Later, he is supposed to upload the product image online on franchisee website, etc.

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