Rational Organizational Structure:For Brick-and-Mortar Lifestyle Retailers in India to Overcome Diseconomies of Scale and Protect Firm’s Sustainability(ROLS-b)

Abstract

A majority of organized brick-and-mortar lifestyle retailers in India believe that the brick-and-mortar retailing model ensures economies of scale as they keep opening new stores. Having more stores might help retailers to gain product sourcing advantages in addition to generating additional revenue to the firm but at the same time, it fails to provide any other benefits towards economies of scale as every new store comes with new one-time capital expenditures and recurring fixed expenses. Another misconception is that lifestyle retailing must follow an organizational structure (OS) that is adopted by their parent company and hence a majority of OS adopted by lifestyle retailers in India is dependent on organizational form. This study was not limited to just recommending a rational OS based on exploratory research and existing theories in the OS domain. Once the ROLS-b was designed, we have experimented with the proposed rational OS on one of the ten lifestyle retailers in the study to test the validity and reliability. Experimentation results empirically and qualitatively demonstrate that the existing belief of brick-and-mortar lifestyle retailers in India which assumes economies of scale and long-term firm’s sustainability as the retailer increases the store count is just a misconception and does not hold. On the other hand, when we experimented the ROLS-b for over twelve months at over 25 percent stores of a select retailer, results demonstrate that these stores which have gone through the treatment have shown 5.34 times improvement in the store-level profit and 1.97 times in the firm-level profit in addition to eliminating a majority of gaps found in the existing OS that was leading to diseconomies of scale and deteriorating firm’s performance.

The Applied Strategic Model of Organic Profit for Brick-and-Mortar Retailing in India (SOPR-b)

“…In an experimental research study, we attempted to design an organizational structure for B&M retailers in India with a higher level of sales and store operations orientation (ROLS-b). When the ROLS-b was tested with a few select B&M retailers in India over twelve months it was found that the stores which have gone through the treatment have shown an average 5.34 times improvement in the store-level profit and an average of 1.97 times in the firm-level profit [87]. Interestingly, in-depth interviews with the leadership team of the experimented B&M retailers have indicated that a majority of this growth was delivered by an exponential increase in the rate of repeat visits/purchases of both new and existing customers.…”

Tech-Business Analytics – a New Proposal to Improve Features and Quality of Products and Services in Various Industry Sectors – An Explorative Study

“…These ICCT-based technologies are regarded as emerging technologies of the 21st century and are anticipated to transform the existing human generation into a tech-generation by altering the current approaches to a variety of issues in industries and society[16][17][18][19][20][21][22][23][24]. Several techniques for resolving environmental issues can be implemented with the help of technology.…”

“…These technological advancements hold the promise of managing the earth's ecological and natural environment in order to support resilient living things. To preserve sustainable living systems on Earth, we undertook a thorough investigation of the role of the ICCT's underlying technologies in this chapter's discussion of environmental and ecological management[16][17][18][19][20][21][22][23][24].Sciences (IJMTS), ISSN: 2581-6012, Vol. 8, No.…”