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.

Learning Objectives

The case is structured to achieve the following Learning 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.

Keywords

Birchbox,Beauty and personal care,Subscription model,Discovery retailing,Business model,Startup,Copycat businesses,Mass customization,Loyalty programs,Competition,Low entry barriers