Question

In: Operations Management

Currently the business strategy is to run one location. What might be the advantages and disadvantages...

Currently the business strategy is to run one location. What might be the advantages and disadvantages of adopting this strategy to multiple sites?

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Expert Solution

Some of the advantages and disadvantages of adopting the strategy of multiple sites are as follows:

Advantages:

  • Companies that create a seamless marketing activity can gain customer loyalty. They are considered to be conscious of consumers' needs, shopping habits, and digital-savvy. With multichannel distribution, brands can differentiate themselves from convenience, but not at more affordable prices.
  • This can protect merchants from relying on a single sales channel. In the event of a supply chain breakdown or suspension of a key account, merchants who diversify their channels may avoid such a hit against your revenue.
  • Multiple sites help businesses to grab more customers at new locations. how? By selling on the online marketplace, opening a new online or physical store, trying out a pop-up experience, or growing into different geographies.
  • With multiple sites strategy, you do not depend on a single platform. Companies are free to optimize their supply chain on their own terms, be creative with their marketing, and have full access to their customer base. How they make a good pre-order strategy.

Disadvantages:

  • More products in more locations mean more suppliers, geographically dispersed warehouses, staff to fulfill orders, and additional shipping costs. This strategy requires more money. It is very important to set a budget for marketing and advertising.
  • Opening an online store can eat up your in-store experience. Once this more convenient option becomes available, a visit to your physical store may decline significantly. This is a challenge that retailers face when they create exclusive online shopping experiences.
  • Companies have to manage thousands of inventories and SKUs, fulfill orders, work with suppliers, provide excellent customer service and guarantee delivery times. Multiply these efforts by the number of additional channels on which you are selling. The management between systems, tools, and your employees can prove time-consuming.

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