How Chain Stores are Managed and Organized? Explained

Chain stores or multiple shops are different from the departmental stores. It is a form of large scale retailing in which retail shops are operated in different localities of a particular city and or in Different cities of the country.

Meaning

All these stores are exactly similar to each other and deal with similar products. All the shops are under single ownership, management, and control. The policies, procedures, and strategies of all these shops are similar and governed by central management.

The main object of multiple shops or chain stores is to expand the market of the products of the manufacturer by making these products available in all parts of the city and or country.

Example of these stores is Xiaomi Store, Samsung Store, Apple Store, Patanjali store, etc.

The number of retail stores operating under common ownership and management constitutes multiple shops or Chain store.

This is a group of stores handling with a similar line of merchandise with single ownership and centralized location.

Related: 21 Advantages and Disadvantages of Chain or Multiple Stores.

How Chain Stores are Managed and Organized?

Chain stores are established generally by a company. Therefore stores are managed and organized according to the organizational structure of the company.

These shops are managed by a board of directors which is headed by a Managing Director. Managing Director appointed as a general manager who is responsible for directing, controlling and coordinating the activities of all the shops.

The whole organization is divided into various departments and each department is managed by departmental management.

The total market of the company is divided into several zones and each one is managed by a zonal Manager.

Related: 13 Main Types of Retailers in Marketing (With Examples).

The organization of chain stores or multiple shops can be explained with the help of the following diagram or chart.

The above organizational chart makes it clear that for the management and control of an individual Store, a branch manager is appointed who is assisted by a team of salesman and other employees.

Goods of these shops are supplied from the head office itself. Some inspectors are appointed for inspecting these shops from time to time.

All the policies and programs of these shops are detected from the head office.

Related: 14 Arguments ‘Against’ and ‘In Favour’ of Elimination of Wholesalers.

Characteristics of Chain Stores or Multiple Shops

Some of the important characteristics of multiple shops or chain stores may be explained as under:

1. All the stores deal in the same type of products.
2. All the shops sell these products at uniform prices, which are determined by central management.
3. All the shops are managed and controlled by the head office. All the policies, programs, and strategies are decided by head office and carried out by these shops.
4. All the purchases are made by head office and the shops are not authorized to make any local purchase.
5. All the stores make cash sales only.
6. Decoration display, and color etc, of all the stores, are the same, and thus, these shops can be recognized very easily.
7. These shops are located in various parts of a city and or in various cities of the country.
8. The main object of these shops is to provide goods and services to the consumers nearest to their home and to eliminate the middleman.

Related: Top 17 Advantages and Disadvantages of Departmental Stores.

On the basis of an analytical study. It can be concluded that chain stores or multiple shops are a large scale retail organization.

Under this organization, identical shops are established in a large number in various parts of a city and or various cities of the country.

All the shops are exactly similar to one another and deal with the same line of products. Pricing policy, display, decoration, etc, of all the stores, are also similar. It is to note that management, ownership, and control of the shops are central. Departmental Store vs Chain Store.

The main object of these shops is to eliminate the middle man and to provide goods and services of a manufacturer to the consumers at most reasonable prices in the country.

Apple Store, Adidas Store, Bata shoe stores, are the best examples of chain stores or multiple shops.

Thus, now you know How Chain Stores are Managed and Organized.