Chain stores are those retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses have come to dominate the market in many parts of the world. A franchise retail establishment is one form of chain store.
The displacement of independent businesses by chains has generated controversy and sparked increased collaboration among independent businesses and communities to prevent chain proliferation.
Types of Chain Stores:
There are different types of chain stores depending on the kind of products the company creates – Business chains (encompass many industries, including music, clothing, and electronics stores) and Restaurant chains ( which create a different kind of consumer product than traditional business chains, and therefore operate under different guidelines).
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A business chain is a network of physical business locations, which all provide similar services or products, and share the same brand. They inevitably also share some degree of central management, supply chains, training programs, personnel, and so forth. They may be part of a single company or franchises, in which individual store owners license the use of the shared brand, training, and expertise.
Chains of both types tend to make purchases and licensing agreements as a single entity. Even two stores or restaurants or businesses owned by the same person or group can constitute a local chain. Several large chains are among the largest retail businesses in the world.
A restaurant chain is a set of related restaurants, usually with the same name in many different locations either under shared corporate ownership or franchising agreements. Typically, the restaurants within a chain are built to a standard format and offer a standard menu. Fast food restaurants are the most common, but there are also midscale upscale establishments. Restaurant chains are often found near shopping malls and tourist areas.
Advantages of Chain Stores:
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Since the decor is the same and carry the same merchandise, it is easier to recognise and depend on them for convenience of quality. Large chain stores deal in many items in one place, thus performing the service of a primary store for the necessary products.
Chain stores successfully provide innovative products as there is high degree of footfalls and in-store advertising.
Chain stores are representatives of new consumer driven society. In these stores the commodities sold are defined as social status goods. They sell goods what customers want, these stores also tell the customers as to what they need and want and what they should buy.
Large chain stores carry more general merchandise than a small independent store; instead of specializing in one area, they have multiple brands for a variety of items. This can be seen as an efficient way to attract customers to a store by offering a lower price and a variety of brands in one place.
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Chain stores create new jobs for people who were not employed by the small stores. Sometimes they are welcomed by the owners of the small stores because they pay them an inflated price for their store just to eliminate it and its competition.
Chain stores displace small and independent stores being run by members of the community is the biggest disadvantage of chain stores. At these stores no bargaining is done. Third, these stores have no personal relationship with the customers.
