Page 66 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 4: Store Opening and Closing

items within the category. The inventory manager is also called “material cognizant” Notes
within the supply system. All items in the supply system have an assigned two-position
cognizance symbol code. This code identifies the inventory manager and the stores account
in which the material is carried. Cognizance symbols are two-character, alphanumeric
codes prefixed to national stock numbers. The first character of the cognizance symbol
identifies the stores account.

Self Assessment

State whether the following statements are true or false:
4. Material identification is the process of identifying the requisite retail store material.
5. The term material cognizance refers to the inventory manager and technical advisor of
each category of material in the supply system.
6. Cognizance symbols are three-character, alphanumeric codes suffixed to national stock
numbers.

Caselet Starbucks Corporation: The Store Expansion Strategy

n 1992 and 1993 Starbucks developed a three-year geographic expansion strategy that
targeted areas which not only had favourable demographic profiles but which also
Icould be serviced and supported by the company’s operations infrastructure. For each
targeted region, Starbucks selected a large city to serve as a “hub”; teams of professionals
were located in hub cities to support the goal of opening 20 or more stores in the hub in the
first two years. Once stores blanketed the hub, then additional stores were opened in
smaller, surrounding “spoke” areas in the region. To oversee the expansion process,
Starbucks created zone vice presidents to direct the development of each region and to
implant the Starbucks culture in the newly opened stores. All of the new zone vice presidents
Starbucks recruited came with extensive operating and marketing experience in chain-
store retailing.

Starbucks’ store launches grew steadily more successful. In 1995, new stores generated an
average of $700,000 in revenue in their first year, far more than the average of $427,000 in
1990. This was partly due to the growing reputation of the Starbucks brand. In more and
more instances, Starbucks’ reputation reached new markets even before stores opened.
Moreover, existing stores continued to post year-to-year gains in sales.
Starbucks had notable success in identifying top retailing sites for its stores. The company
had the best real estate team in the coffee-bar industry and a sophisticated system that
enabled it to identify not only the most attractive individual city blocks but also the exact
store location that was best. The company’s site location track record was so good that as
of 1997 it had closed only 2 of the 1,500 sites it had opened.

Source: http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html
4.3 Receiving and Inspection

Receiving is an act of taking possession of goods in order to stage them for inspection or place
them into inventory.

LOVELY PROFESSIONAL UNIVERSITY 61