Abstract

US-based The Dollar Shave Club (DSC) with its unique low cost business model of leveraging technology, ecommerce and online marketing sold subscription based men’s razor shaving blades, shaving accessories and men’s personal care products. Backed by efficient founders, within two years of its founding DSC had more than 200,000 online subscriptions. Its share in the online men’s shaving and personal grooming was seen growing causing a threat to even Gillette and Schick the established retail brands that dominated the market. In mid-2016, Unilever the company that owned over 400 brands was intending to fill the void in personal care and men's grooming segment and shift its focus from the slow growing food brands. Unilever struck the acquisition deal of DSC for $1 billion the cost of acquisition surprised the analysts, as it was five times DSC’s annual expected sales for 2016. The case discusses if Unilever paid far more than DSC's most recent valuation, whether Unilever with the acquisition of DSC, would be able to beat the long established players. Was the acquisition going to be mutually beneficial for both DSC and Unilever? The case also throws questions on whether DSC had secured its plan for future survival and growth.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Apply how companies can create low cost business model by combining technology, sales and branding and disrupt the market.
• Understand the importance acquiring a start-up that is showing huge promise.
• Evaluate how companies can align their brand portfolio.

Keywords

Low-cost manufacturer , Online subscription based business, Social media, Acquisition as a growth strategy, Low cost business model, Online order-taking, Disruptive business model, Entertaining advertisement, Customer experience, Acquisition, Buyout, Unilever, Procter & Gamble