Shinola\u2019s rapid rise to pop culture stardom demonstrates the effective alignment of its business and operating models. In particular, the company\u2019s business model capitalizes on its brand motto \u201cWhere American is made\u201d by using its operating processes to create physical products as well as yield significant returns in brand value.<\/p>\n
Business Model:<\/p>\n
Shinola is an American brand launched in 2012. The brand manufactures and sells watches, journals, leather goods, bicycles, and apparel through retail, online and wholesale channels.<\/p>\n
Operating Model:<\/p>\n
Shinola sources from a daisy chain of American producers (with a scant few international suppliers in the mix) to source inputs and assembles its final products in Detroit. By emphasizing the American-made nature of its goods the company competes at mid-tier luxury price points, and by sourcing its labor and manufacturing from underutilized sources maintains solid, if not luxury level, gross margins. But let’s dig a bit deeper into the assets utilized to create value.<\/p>\n
Asset: Diverse Supplier Network<\/p>\n
On the production side of the business, the company utilizes a diverse supplier network to create product that is all branded under the company\u2019s most important asset, the Shinola brand name. While at first blush it may seem that Shinola exists as a single Detroit based manufacturer, the company\u2019s website and press on the company both make a key point of emphasizing how Shinola sources watch straps from Florida, leather from Chicago, and (gasp) a few watch components from Switzerland. By working with a diverse supplier base, Shinola has been able to scale quickly without significant capital.<\/p>\n
Asset: Skilled Labor Force<\/p>\n
Shinola\u2019s production also hinges on a labor force that was trained and hired after being put out of work in\u00a0the collapse of the Detroit auto industry. The company has discussed how\u00a0it brought Swiss watchmakers over to Shinola\u2019s Detroit factory to train its team; capitalizing on the high potential of a motivated group with limited alternatives.<\/p>\n