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Introduction
Chain store creation has debilitated markets, eroded public character, and disadvantaged communities and traditional life. Furthermore, consolidation has minimized competition and could hurt customers in the long run. In contrast to the conservative wisdom, the decline of Small and Medium Enterprises (SMEs) is not inevitable, nor is it simply the outcome of free marketplace powers. Rather, public policy has played a significant role, specifically through tax incentives and other development subsidies that give national chains a significant advantage. Meanwhile, several communities are taking a changed approach (Boone et al.). They are implementing land usage regulation that obstructs chain stores and actively boost local proprietorship. This proposal aims to elaborate on how SMEs can be sustained to avert them from being damaged by huge chains.
Consumers
The debate over chain stores is often characterized as a struggle between the consumers hearts and wallets. Over the long-standing, customers are best served when there are several competitors in the marketplace. Large sales companies, such as Home Depot, and Best Buy, are known in the industry as category killers (Boone et al.). These businesses do not intend to compete with domestic stores; they target to be the only players in the market. Typically, a chain store will enter a new economy sporting a deep discounts. Numerous chains utilize loss leaders to interest buyers. For instance, Wal-Mart is commonly known to retail gallons of milk for 25 cents or to value entire divisions below its purchase cost (Boone et al.). The approach results in competitive environments that significantly impact the local merchants. If the domestic retailers do not match the chains prices, they tend to risk losing clients and profit on every sale. While a chain cannot afford to function in a new outlet at a loss, the local businesses will be compelled to close.
The elimination of the local business will influence a fluctuation in prices by up to 25 percent. For instance, in Virginia, research on Wal-Mart concluded that various Wal-Mart stores statewide found prices varied by as much as 25 percent (Boone et al.). The inflation was instigated by insignificant competition in the marketplace. Similar conclusions were made in a study of Home Depot. The prices were as much as 10 percent higher in the state of Atlanta, equated to the more competitive economies in Greensboro, North Carolina.
Local Economies
Chain stores contribute marginally to the local economy than independent retailers. For instance, research in Lowa concluded that new Wal-Mart centers derive on average 84 prevent of their profits from the existing industries in the community. There are few of the sales generated by new retail stores represent new retail expenditure. Instead, the chain stores shift economic activity from one area of the city to another. The end is not economic development but economic displacement. Research from Massachusetts determined that the planned Wal-Mart store would make the local retailers lose 35 million dollars in sales (Jeble et al.). The 177 jobs expected to be gained by Wal-Mart would lead to the loss of 148 jobs at other local enterprises.
Swapping locally-owned industries for the chain stores further entails the loss of significant secondary economic benefits. Domestic retailers maintain the circulations of profit within the native economy. They also back various other local companies since they create opportunities for service providers, such as printers and accountants. The organizations usually conduct commerce with the community bank and market through independent media stations. Small and Medium Enterprises (SMEs) also buy commodities from regional and local suppliers (Jeble et al.). Consequently, a dollar spent in a domestic company leads to a flow of economic profits through the community. Furthermore, a community that loses its domestic enterprises to state chains risks losing its economic growth prospects. New technologies have enabled many organizations to function online in every region. When the chain companies deliberate on geographical options, towns with vibrant trade centers and distinct characteristics are usually considered.
Therefore, the national and state governments can support the growth of the local economies by implementing policies that will see the setting aside of support funds, such as grants and loans to support the businesses. Furthermore, the local media stations should offer marketing opportunities to the domestic stores to boost their market advantage over the chain stores. The approach will influence the attraction of new consumers while maintaining loyal customers (Jeble et al.). The local suppliers can further aid in developing the local stores by ensuring they support the businesses through timely delivery of materials. Local administration should implement laws and trade policies such as tax incentives that will see the chain companies taxed higher than the independent industries.
Promoting the adoption of technological innovations amongst the local businesses will further boost their market share, especially by attracting new-age shoppers. The new generation of consumers is often characterized by online shopping. Therefore, investing in e-commerce will significantly boost the increased market presence of chain stores. Similarly, the introduction of trade regulations such as tariffs to block the entry of chain stores into the local economies will also boost the growth of local stores (Jeble et al.). The tariffs should, however, be lifted on chain stores that aim to conduct business with the local stores with the objective that each partner shares the profits family. Finally, the local consumers should be encouraged to support the local businesses by inspiring the culture of communism. The local economy should therefore be sustained by protecting the independent enterprises to boost economic growth through job opportunities.
Community
From an economic viewpoint, it is evident that the chain stores are not the communitys best value. However, they are more substantial than most of the economic deliberations, which are the qualitative benefits of domestic ownership. Independent businesses create strong communities since they offer a foundation for the channel of connections and trust that scholars like Jane Jacobs believed were vital for the growth of a healthy neighborhood (Akkermans and Van Wassenhove). There are numerous reasons for the conclusion on the contribution of the local companies to the community. First, independent enterprises tend to be situated in humanly-scaled, pedestrian-leaning trade districts, contrasting to the expansive, isolated incidences of the national chain parking area. Second, domestic stores develop a sense of residence and community individuality. They give localities their uniqueness and are often an origin of the neighborhoods pride and an attraction to tourists.
On the contrary, the chain stores are sapping the neighborhood of their uniqueness and individuality. Even the most iconic American cities such as Manhattan are losing their distinctive characteristics due to the construction of national chains. Home Depot and Costco are some of the chain retailers that are currently operating in the market (Akkermans and Van Wassenhove). The entrance of the national companies will further entail the destruction of important domestic marketplaces. For instance, the Friends Meetinghouse in Richmond, Indiana, was demolished for a CVS medicine store. Similarly, in Nashville, the Jacksonian Apartments, which were eligible for the State Register of Historic Locations, were also demolished to accommodate a Walgreen drugstore.
Third, independent companies reinforce communities through their contributions to civic and cultural life. The local retailers are more than sellers of commodities and services since they regularly rise to leadership roles in community activities. Most of them chair neighborhood firms, and organize cultural occasions and festivals. According to the American Small Businesses Management, SMEs offer more time and funds to charity organizations than chain stores (Akkermans and Van Wassenhove). The initiative is instigated by the traders living in the localities where they conduct business. Thus they tend to become committed to the neighborhoods welfare and long-lasting sustainability. The commitment is often evident in various ways. For instance, in St. Paul, Minnesota, the domestic food company had been non-operational for a significant period (Akkermans and Van Wassenhove). However, numerous independent stores comprising book-selling merchants offered sizable and required loans to rekindle the business.
Finally, the shift from independent to absentee-owned stores means that trade decisions are no longer made by the local members of the community. The chain stores usually decide the fate of closing a store in a distressed neighborhood, stock a controversial book, selling products from the domestic farms, and paying a living salary (Akkermans and Van Wassenhove). Such loss of decision-making and the growing number of large companies has influenced the lack of democracy in such markets. However, the absence of decision-making privileges can be mitigated by encouraging the establishment of unions. The unions will enable the Small and Medium Enterprises to voice their opinions on the market prices, tax incentives, and employee wages. The approach will boost the presence of independent businesses by presenting a fair environment for competition. Moreover, the implementation of community business support groups with the aim to offer financial support to local communities and entrepreneurs will develop a communal business culture in the neighborhoods (Akkermans and Van Wassenhove). The community, therefore, plays a vital role in the success of independent enterprises. The support of such institutions will present opportunities for the growth of communities and the general economy of a nation.
Conclusion
Small and medium enterprises play a significant role in the growth of the local and national economies. However, the growth of chain stores has significantly impacted their operations, leading to the loss of customers, and adverse impacts on local economies and communities. The national and local administrations should support independent businesses by offering financial support through loans, restructured tax policies, and tariffs. They can also encourage regional business competition by ensuring local stores in towns compete regionally with other stores. Consequently, there will be a fair environment for the businesses to operate. Therefore, independent businesses are a significant part of the business industry and the economy and should be supported to boost their growth and development of, a competitive edge over the chain stores.
References
Akkermans, Henk, and Luk N. Van Wassenhove. Supply Chain Tsunamis: Research on Low-Probability, High-Impact Disruptions. Journal of Supply Chain Management, vol. 54, no. 1, Wiley Online Library, 2018, pp. 6476.
Boone, Tonya, et al. Forecasting Sales in the Supply Chain: Consumer Analytics in the Big Data Era. International Journal of Forecasting, vol. 35, no. 1, Elsevier, 2019, pp. 170180. Web.
Jeble, Shirish, et al. Impact of Big Data and Predictive Analytics Capability on Supply Chain Sustainability. The International Journal of Logistics Management, Emerald Publishing Limited, 2018, 29(2), 513-538.
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