Question 11.1
This essay serves to look at three aspects in the retail space. We will firstly look at forms of ownership as well as their functions within the retail industry. Secondly we will look at food retailers found in most neighborhoods, our neighborhoods. Finally, we will analyse the different shopper segments and their characteristics upon conclusion of this essay. There are various forms of ownership for retail outlets some of these ownerships include the following:
Sole proprietorship- this being a business that is solely owned by one individual. This owner being the one who bears all losses as well as profits single handily. This is a basic form of ownership for a business. The advantages to this type of ownership is that the owner gets to choose their own business hours, profits belong to the owner only no need to share among partners etc. The disadvantages being that there is limited capital within the business due to the lack of third party finance, may be hard to run etc. These sole proprietorships often take the structure of independent stores.
Partnership- in this business the business is made up with two or more individuals who agree to be a part of the business and all have a financial interest towards the business. The profits as well as losses incurred during the businesses practices are shared among all the individuals according to agreements. This type of ownership does have advantages as well as disadvantages. The advantages being that there is an increase in funding for the businesses practices, more intellectual property among the different partners. The disadvantages being that the profits have to be shared and that there may be conflict amongst the members.
Limited liability company- in this type of ownership the business is formulated according to the companies act in South Africa. Companies formed through this way are then either private or public limited companies. Both types of companies having rules, laws and regulations that are to be abided by regarding the liability of directors within the organizations. There are advantages and disadvantages of having a limited liability company. The advantages being that there is limited liability amongst the owners and great flexibility with regards to running the business. The disadvantages being those of additional taxes as well as less credibility for the business.
