4 logisticinfrastructure mobility jit just in time to

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Unformatted text preview: : contagious diffusion, hierarchical expansion – Example: hierarchical: go to big places first, then spread from that place (contagious diffusion) • mergers, acquisitions and take-overs: gain instant market presence Fewer Larger Stores • ↑ store size • ↓ store number • require the mobility of consumers(as they are in suburban, difficult to access by public transportation) Fewer Larger Warehouses • • • • 6.4 logistic/infrastructure mobility, JIT (Just In Time) to serve a large number of stores: efficiency sorting facility — cross warehousing: one truck bring all goods needed to one store (efficiency) Retail Chains/Franchises Associate with shopping center or power nodes c D. Wang & C.Zhao, 2006 13 6 THE GEOGRAPHY OF SUPPLY: RETAIL Advantage of Retail Chains 1. General advantages of scale economic • most activities are cheaper at larger scale • cost per unit is low (more specifically below) 2. Avoid restrictions of single/few markets • reduce risk by spreading risks between countries, cities or neighborhood (trade areas) • need global recessions for all markets store to be in trouble 3. Aspect of overhead can be shared • e.g. administration, accounting, locational analysis, training, technology • can afford to have a department for each, or purchase expertise 4. New technologies • EPOs (Electronic Purchase Order), JIT strategies 5. Leverage and purchasing power is high • negotiate with suppliers and producers • much shelf space • their own brands • producers > wholesalers > retailers – in recent years, gradually miss out wholesalers/warehouser – go directly to the supplier – we want our brand name on the label 6. Experience: success and failure • what works • test products lives in sub-set of stores – test at distant boring stores – if works, work anywhere – otherwise, won’t risk it 7. Maximum of Advertising/Marketing Exposure • high advertising budget • high profile • different media • generative (generate traffic in the mall) • universal application (advertisement not wasted, because people will be attracted to store or brand) 8. Wait-out strategy • system wide decision making • retail chains can go in somewhere don’t...
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