Case Code: BSTR533
Case Length: 7 Pages
Pub Date: 2018
Teaching Note: Available
Organization: Birchbox Inc.
Industry: Beauty and Personal care, E-commerce
Abstract Case Intro 1 Case Intro 2 Excerpts
The case continues from the second round of lay-offs followed by a round of funding which gave breathing room for the cash-strapped start-up. Beauchamp tweaked the loyalty program but the move was not well received by its subscribers. Birchbox also launched a new service called Birchbox Select which gave the subscribers more choices and control to customize their Birchbox for an extra fee of $5. In April 2017 Birchbox announced it had turned profitable because of all the cost-cutting measures it had adopted and maintained that profitability had also come with growth. Birchbox went on to sign strategic partnerships with beauty brands and Vogue, a lifestyle magazine. Case (B) concludes with challenges that Birchbox could face with the entry of well-established e-commerce platforms with a high degree of vertical integration, into the beauty subscription space.
The case is structured to achieve the following teaching objectives:
- Examine Birchbox’s business model and identify the key challenges pertaining to its model which limit the growth of the company
- Evaluate the competitive environment of the industry in which Birchbox is operating
- Inspect and critically evaluate the measures taken my Birchbox in the wake of the challenges it is facing
- Estimate the threats Birchbox might face in the immediate future. Analyze and devise a plan for counter measures
Birchbox, Beauty and personal care, Subscription model, Discovery retailing, Business model, Startup, Copycat businesses, Mass customization, Loyalty programs, Competition, Low entry barriers
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