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Birchbox (B)

Birchbox (B)
Case Code: BSTR533
Case Length: 7 Pages
Period: 2010-2017
Pub Date: 2018
Teaching Note: Available
Price: Rs.200
Organization: Birchbox Inc.
Industry: Beauty and Personal care, E-commerce
Countries: USA
Themes: -
Turnaround of Indian Railways: A Tough Road Ahead?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

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.

Issues

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

Contents

Keywords

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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