1 The Shop (TS) Thomas worked for 30 years as a manager of a factory. Although he was very good at his job he was recently made redundant. Thomas always wanted to open a shop. He thinks he has the qualities an entrepreneur is likely to need for success. He has undertaken some primary market research to identify possible opportunities in city X where he lives (see Fig. 1.1). [Figure 1.1] This figure shows the following percentages for each shop type: sandwich shop 25%, electronics shop 10%, butcher shop 10%, bakery shop 20%, grocery shop 15%, clothes shop 5%, coffee shop 15%. Question: What type of shop do you think would be most successful on Main Street? Percentage of respondents for each type of shop, based on a sample of 160 shoppers on Main Street in city X between 12:00 and 14:00 on Friday 20 December 2019. Thomas now needs to make a decision about which type of shop to open. He has used the data in Fig. 1.1 and some secondary market research to identify two options. Option 1: Coffee shop The coffee shop would provide hot drinks that customers could take away and drink elsewhere. It would also sell some bakery items, such as biscuits and doughnuts. There are four other shops selling takeaway hot drinks and bakery items in the city, as well as five cafés. Thomas thinks that the profit margin would be 6% to 8%. Option 2: Sandwich shop The sandwich shop would make sandwiches using job production. Customers can choose from a range of sandwich fillings, as well as cold drinks and snacks. There is only one competitor in the city. It is a well-known international franchise that spends a lot of money on promotion. Thomas thinks that the profit margin would be 10% to 15%.