“Retail structures refer to the state of play in the competitive struggle between retail companies and businesses each of which is seeking to not only survive but also grow”. The struggle for dominance of markets in the modern economy is unending. This calls for retail companies to strategize on the means of achieving and maintaining competitive advantage within their respective industries. Consequently, retail companies adopt various structures in varying locations informed by extensive research and aimed at understanding diverse consumer needs and requirements. Retail structures adopted by retail companies seeking to internationalize their operations may take the form of centralized structures, decentralized structures, or combinative structures.
Centralized retail structures are convenient for both the customers and retail companies due to ease inaccessibility which is aided by efficient transportation and communication. The centralized structure is associated with increased sales revenue and subsequent profitability of the company. However, this structure limits the retail company’s market share since it is limited within a confined region. Further, the structure is associated with heightened competition which if not properly regulated may result in massive losses due to unhealthy competition.
As the market continues to expand in size, the competition in the retail industry continues to heighten which prompts the companies to establish new outlets to serve the markets emerging at the periphery. Redevelopment of downtown retail functions takes place in different processes; continued investment in and replacement of the existing retail fabric to retain the unique atmosphere of the downtown, a gradual expansion of arterial strip retailing into upscale neighborhoods, redevelopment of older industrial and commercial sites for specialized retail purposes, and the consortium of new high rise office and apartment buildings. Even though decentralization increases a firm’s market share, the process of decentralization is associated with increased operating costs which if not properly managed may result in losses. On the other hand, combinative retail structures incorporate both centralized and decentralized retail structures and it is associated with market congestion and heightened competition.