Overview Of The Prospects Of Consumer Cooperative Societies

This topic is important to me because it reveals the challenges that consumer cooperatives face, which can be a hindrance to growth. I will gain a better understanding of how the prospects for consumer cooperative societies are evaluated. I find the cooperative concept very interesting, which makes it even more fascinating to study.

Cooperatives can also be considered economic associations. It is a corporate institution which aims at providing valuable services to the public at an affordable price. The role of consumer cooperatives is to protect buyers from being manipulated by intermediaries and to provide superior products to customers at reasonable rates and in the best amount. Research has shown that governments have taken many steps to form consumer cooperatives. These include establishing public relations, protecting monopolies, and regulating the price variations in the market. I also found out some of the problems faced by consumer cooperatives depending on their location. The majority of my research has been done in Malaysia. The challenges are now being discussed.

The cooperative stores with moderate purchasing power are typically small or medium-sized. The rate discount that is obtained from bulk purchasing of goods does not benefit consumer cooperative. Consumer cooperatives offer rates that are higher than those advertised by supermarkets and other giant operators. In the past, it has been shown that cooperative failures are due to a lack of financial knowledge and inadequate training. Segregation is essential in building a business network that can compete in the market where cooperatives are located. Marketing creativity and capital strength have shown the positive effects on cooperative associate loyalty. This is due to the uneven flow in transactions between cooperative and corporate sectors. The external party dependency makes it hard to create wealth. It is hard to find skilled and qualified workers when it is becoming more expensive. The turnover is also increased by the fact that employees tend to leave the company after a short time.

Inefficiencies in administration planning, lack of market analysis and inefficiencies in corporate governance are two of the biggest issues. Another issue is the decision to build retail outlets in the right place. The research revealed that many Malaysian consumer cooperatives employed less experienced, skilled and competitive workers in their retail outlets. Diversifying business income can also lead to a loss of business focus, which in turn makes it difficult to fulfill its original purpose. Credit lending was introduced by cooperatives in an effort to increase repeat purchases and improve purchasing behavior. Many customers and members began to trust cooperatives when they shop. This system is proven to be very popular with buyers because they are unable to shop at other stores. Unfortunately, excessive credit lending has led to more taxing by not having a proper management system. Some cooperatives were forced to pay the debt uncollected.

This problem is caused by a lack in education regarding cooperative among members and buyers. This results in ineffectiveness in making decisions and taking on responsibilities that are focused on the cooperative. Cooperative societies are only open to members who want to receive loans and dividends. Azmah and co. Azmah (1993) reported that only 50 percent of respondents were surveyed at the annual general assembly. The meeting was attended by 14.3 percent of those who did not show up. The annual general meeting was attended by rural cooperative members at a higher rate than urban cooperative members. Research revealed that the majority of members had not increased their share of capital during their membership of the cooperative.

Cooperatives are often kept quiet in order not to appear traditional. This can lead to little benefit to members. The cooperative outlets sell goods at lower prices than their competitors. This is affecting their customer satisfaction. The other side is that the cooperatives’ connections with manufacturers have been reduced, which has led to the firms buying directly from them at discounted prices. The coops have less purchasing power, which can also contribute to higher purchase costs and taking advantage of competitive advantages. In this regard, manufacturers no longer offer credit services because they are less close and more confident.

Retail shops should have limited stock and products of low quality. Retail shops in countries such as Malaysia were found to be inefficient and lacking professional practices. Many shops still used manual transactions and did not have cash machines. Also, the accounting system should have been less. Ordering and delivery were also not efficient. Stock counting wasn’t given the attention it deserved.

Consumer cooperatives were also subject to competition from similar businesses with more modern and well-equipped facilities. Stone (1988-1995, 1998) states that small retailers will be more vulnerable to competition if they sell similar products in supermarkets than small businesses.

According to research, most employees and managers are unhappy with their work load in relation to their salary. Cooperatives do not pay as high or as reasonable wages, so employees are less likely than others to work long hours at coop retail shops. There was less chance of employees being offered better career opportunities and benefits.


  • codyyoung

    Cody Young is an educational blogger. Cody is currently a student at the University of Utah pursuing a degree in communications. Cody has a passion for writing and sharing knowledge with others.



Cody Young is an educational blogger. Cody is currently a student at the University of Utah pursuing a degree in communications. Cody has a passion for writing and sharing knowledge with others.

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