rao industries intends to open retail stores in every locality but is not sure of profitability due to tough competition. Do you think the business opportunity is feasible? Give reason.
Dear Student
Yes the business opportunity to open retail stores in every locality is feasible due to following advantages of identical retail multile stores:
Yes the business opportunity to open retail stores in every locality is feasible due to following advantages of identical retail multile stores:
- economies of scale - Different types of costs can be saved
- standardised products - It helps to increase the sale
- public confidence - Due to multiple shops in dfferent areas public confidence about the stores will build.
- division of risk - Risk of loss can be divided among different stores.
- No, Bad debts - Availability of stores in different areas will increase Regular and small buying habbit of customers, it will help to reduce the risk of bad debts.