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Retail Store Management

Notes 6. There is a less demand for the retail management professionals to process all merchandise
shipments, to achieve store sales and profitability, administration of stores as well as
communication with the clients to satisfy them.
7. Workers who hold retail and other low-wage service jobs tend to be the least educated in
the labour force and depend on training for career mobility.
8. With increase in organized retail, the potential for job creation also goes up.

14.3 Diversification

Once a firm opts for diversification, it must select one of the options discussed below. There are
two broad ways to implement diversification strategies:

1. Mergers and Acquisitions: A merger is a legal transaction in which two or more
organizations combine operations through an exchange of stock. In a merger only one
organization entity will eventually remain. An acquisition is a purchase of one organization
by another.

2. Strategic Partnering: Strategic partnering occurs when two or more organizations establish
a relationship that combines their resources, capabilities and core competencies to achieve
some business objective. The two major types of strategic partnership: joint ventures and
long-term partnerships are discussed below:
Joint Ventures: In a joint venture, two or more organizations form a separate,
independent organization for strategic purposes. Such partnerships are usually
focused on accomplishing a specific market objective. They may last from a few
months to a few years and often involve a cross border relationship. One firm may
purchase a percentage of the stock in the other partner, but not a controlling share.

The joint ventures among Indian and Foreign companies such Hindustan Motors
and General Motors, Hero Cycles with Honda Motor Company, Wipro and General
Electric etc. are examples of such strategic partnering.
Long Term Contracts: In this arrangement, two or more organizations enter a legal
contract for a specific business purpose. Long-term contracts are common between
a buyer and a supplier. Many strategists consider them more flexible and less
inhibiting than vertical integration. It is usually easier to end an unsatisfactory
long-term contract than to end a join venture.

Self Assessment

Fill in the blanks:
9 . In a .........................., two or more organizations form a separate, independent organization
for strategic purposes.
10. A .......................... is a legal transaction in which two or more organizations combines
operations through an exchange of stock.

11. In a merger .......................... organization entity will eventually remain.
12. An .......................... is a purchase of one organization by another.

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