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Retail Business Environment

Notes The most successful example is probably the CAP Markets, a steadily growing chain of some 50
neighborhood supermarkets in Germany. Other examples are the St. Mary’s Place Hotel in
Edinburgh and the Hotel Tritone in Trieste.
Event franchising: Event franchising is the duplication of public events in other geographical
areas, while retaining the original brand (logo), mission, concept and format of the event. As in
classic franchising, event franchising is built on precisely copying successful events. Good example
of event franchising is the World Economic Forum, or just Davos forum which has regional
event franchisees in China, Latin America etc.

Acquisition

An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another.
An acquisition may be friendly or hostile. In the former case, the companies cooperate in
negotiations; in the latter case, the takeover target is unwilling to be bought or the target’s
board has no prior knowledge of the offer. Acquisition usually refers to a purchase of a smaller
firm by a larger one. Sometimes, however, a smaller firm will acquire management control of
a larger or longer established company and keep its name for the combined entity. This is
known as a reverse takeover.

Types of Acquisition

The buyer buys the shares, and therefore control, of the target company being purchased.
Ownership control of the company in turn conveys effective control over the assets of the
company, but since the company is acquired intact as a going business, this form of transaction
carries with it all of the liabilities accrued by that business over its past and all of the risks that
company faces in its commercial environment.
The buyer buys the assets of the target company. The cash the target receives from the sell-off is
paid back to its shareholders by dividend or through liquidation. This type of transaction leaves
the target company as an empty shell, if the buyer buys out the entire assets. A buyer often
structures the transaction as an asset purchase to “cherry-pick” the assets that it wants and leave
out the assets and liabilities that it does not. This can be particularly important where foreseeable
liabilities may include future, unquantified damage awards such as those that could arise from
litigation over defective products, employee benefits or terminations, or environmental damage.
A disadvantage of this structure is the tax that many jurisdictions, particularly outside the
United States, impose on transfers of the individual assets, whereas stock transactions can
frequently be structured as like-kind exchanges or other arrangements that are tax-free or tax-
neutral, both to the buyer and to the seller’s shareholders.
The terms “demerger”, “spin-off” and “spin-out” are sometimes used to indicate a situation
where one company splits into two, generating a second company separately listed on a stock
exchange.

3.8 Culture

Notwithstanding the importance of economic variables like income and wealth that affect the
consumption of a person, the anthropologists and marketers have drawn the attention to a
factor which is not deeply explored as a determinant of retail business environment, though it
is increasingly showing its implications and more often scholars and researchers have started
paying attention to it – culture and cultural characteristics that effect the retail business
environment.
Culture may be viewed as the sum total of man's knowledge, beliefs, arts, morals, loves, customs
and any other capabilities and habits acquired by man as a member of society". It is the totality

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