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Pattern description
Pattern description
Instead of opening new branches, a partner is chosen whose branches can profit from integrating the company's offerings in a way that imitates a small shop within another shop (a win-win situation). The hosting store can benefit from more attracted customers and is able to gain constant revenue from the hosted shop in the form of rent. The hosted company gains access to cheaper resources such as space, location, or workforce.
Inventive problems
Inventive problems
The company should have many stores in different places with wide product range to sell lots of different product.
The company should have few stores (should not have the own stores at all) to reduce costs.
The assortment should be narrow to maximize revenue per product unit.
The assortment should be broad to ensure the maximum number of customers.
The company should be large and have a complex structure to perform a large number of diverse operations for the development, production, and delivery of a complex product to the customers.
The company should be small and have a simple structure in order to:
- reduce the variety and complexity of the company activities;
- focus on a small number of core operations;
- have a small stuff;
- minimize the cost of development, production, sale, and delivery of products to customers.
Application examples
Application examples
Besides traditional coffee products for sale in its chain of coffee shops and cafés, Tchibo offers its customers a broad variety of consumer goods and services such as clothing, electronic goods, household items, mobile phone contracts and travel insurance. Many of Tchibo’s outlets present as smaller stores within dedicated areas of supermarkets and other retail businesses. The company negotiates special contracts for these spaces, giving the company key positioning for its brand and widening its reach, all with the benefit of lower costs for smaller branches.
Tim Hortons Inc. is a Canadian restaurant chain that initially specialised in coffee and doughnuts, but now offers other products such as pastries, bagels and cakes. It is Canada’s largest fast food service with thousands of stores nationwide, plus a select number in other countries. As well as operating through its standard premises, Tim Hortons positions its stores in other locations such as airports, hospitals and universities. By operating many smaller branded stores in busy areas, the company provides convenient access and high visibility for its brand. By adopting the Shop in Shop business model and collaborating with other businesses and organisations, Tim Hortons cuts costs by providing smaller outlets without the overheads of a full branch. This enables the company to expand its reach, increase its customer base, and hence receive greater revenue and profits.
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