Week 4 Checkpoint

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Various advantages and disadvantages underlie the practice of doing business either as a chain business or single /independent holdings Chain restaurants involve a system of restaurants that are connected to one another . They usually share a similar brand name with the provision of the same or even similar products and services . However , they could have offices located at different places . However , independent restaurants are holdings established under sole business regulatory environment without sharing the same business composite aspects

neither affiliated to one another . Broadly , operation of chain restaurants rather than independent holdings in perhaps the greatest business management tool for attracting productive efficiency (http /www .articleworld .org /index .php /Business_chain

Firstly , chain restaurants have a strong network of technological system , which is established to exchange and discharge information across their units . Unlike the independent holdings that lack capital economies of scale to establish such information systems , chain restaurants have an active transfer of information which involve marketing . Information systems could be both centralized and decentralized

Due to their huge framework , chain restaurants have a greater capacity in bargain for capital sourcing and deficit financing . One business can use the other as guarantors to source capital . Elsewhere , their big and close relationship (like the McDonald 's ) provides capital sourcing security from the banks and other financiers . However , independent restaurants may be disadvantaged in making capital sourcing due to their small-scale capacities . They make be inadequate over some basic requirements towards sourcing huge funds for asset purchase and business expansion (Anderson , Neale , 1996

Site selection by chain restaurants involves an intense network of business research in terms of market and other business vulnerability factors . However , independent restaurants may be inadequate of the adequate tools of analyzing their site selection which would ensure high sales turn . Due to their capacity , chain restaurants have economies of scale in their inventory purchases . Huge purchases are accompanied by lower purchase costs . However , independent restaurants may lack this opportunity and make their purchases in small scale . Chain restaurants have standardized system in their personal training . This ensures highly efficient human capital . However , independent chains may not posses such a privilege (Anderson , Neale , 1996

Reference

Anderson C Neale , R (1996 ) Business Management . New York International Labor Organization

Business Chain . Retrieved on 10th May 2008 from http /www .articleworld .org /index .php /Business_chain PAGE

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