Explain why online-only retailers have major advantages over bricks and mortar-only shops?(5 marks)
Online retailers are retailers that provide or sell goods and service through internet and this often referred as ecommerce.
One advantage of online retailer is that it reduces overhead costs. This is because unlike bricks and mortar online retailer does not require expensive storefronts or premises; instead, more cost-effective warehouse is used to hold inventory. Also, by not having storefronts it means they are further able to cut their overhead cost as they won’t need to employee large amount of labour. This means online retailer have a major advantage over mortar- brick and it’s evident the success of online retailer with online retailer such as Amazon who’s benefiting from online retailer by cutting their costs and becoming one of the biggest retailer over the last 30 years in the world without any forefronts or premises in inner cities.
Sainsbury is considering whether to open its first stores in China or India. To what extent would such a decision be down to intuition compared to scientific management?
Intuitive decision is decision based on experience and gut feeling without having supporting data. Whereas, decision made scientifically are based on data such as financial forecasts, breakeven analysis or investment appraisal. In Sainsbury’s case it’s vital for them to consider the risk, reward, uncertainty and opportunity of opening a store in China and India.
Sainsbury’s decision to enter into the China or Indian market by opening their first store is likely to be a combination of scientific and intuition decision. In particular scientific decision because through scientific decision Sainsbury’s will be able to research the attractiveness of Indian and China, moreover they will able to research the shopping habits and the cultural differences between UK consumers and the Asian consumers. Consequently, decide if Sainsbury are able to adapt to that culture difference and reduce the risk of making expensive mistake. In order to achieve this and prevent from replicating the failure of Tesco entering into the US market; Sainsbury could implement the Bartlett and Ghoshal matrix which takes into account local responsiveness, for example 30% of Indian population is vegetarian therefore Sainsbury’s management department need put a strategy to successfully meet the different consumer...