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Internal Trade — Business Studies STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceBusiness StudiesInternal Trade6 Marks
Question
What are the differences between departmental stores and multiple shops?
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Answer

The differences between departmental stores and multiple shops are summarized below:
  1. Location: A departmental store is centrally located and attracts customers towards it. On the other hand, multiple shops are situated in different localities and attempt to reach near the customers.
  2. Variety of goods: A departmental store deals in a wide variety of products and serves as a universal supplier. On the other hand, a multiple shop specialises in one line of goods.
  3. Type of customers: A departmental store caters mainly to rich people, whereas multiple shops cater to the general public.
  4. Nature of dealings: A departmental store sells goods both on cash and credit basis. But multiple shops sell goods on cash and carry basis.
  5. Services: A departmental store offers banking, post office, restaurant and other facilities to customers. Multiple shops do not offer such services.
  6. Pricing: Different departments of a departmental store may sell goods at different prices. But all the multiple shops sell goods at the same prices.
  7. Decoration and display: Every department of a departmental store may have different decoration and display. But all the multiple shops of an owner have uniform shop decoration and window display. A departmental store advertises at local level, whereas multiple shops advertise at national level.
  8. Object: A departmental store aims at providing everything at one place. Multiple shop system, on the other hand, is an attempt to eliminate middlemen and establish direct contact between the manufacturer and consumers.
  9. Flexibility: In a departmental store quick adjustment can be made according to local changes. One line of goods can be substituted by others. Multiple shop system lacks such flexibility.
  10. Control: In a departmental store, heads of departments have considerable discretion in the management of operations. Branch managers in a multiple shop system have to follow the policies and procedures laid down by the head office.
  11. Ownership: A departmental store is generally owned and established by a retail trader. On the other hand, multiple shop system usually operates under the ownership and management of a manufacturer or a wholesaler.
  12. Risk: Risk involved in a departmental store is relatively greater because success depends on the prosperity of a single location. In multiple shops system risks are spread over different shops located in different areas.

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