Global Business and Strategy Report: Birchbox Competitive Advantage

This report provides a comprehensive analysis of Birchbox, a subscription service for beauty products. It begins with an overview of the company and its business model, followed by an internal and external analysis using SWOT and PESTLE frameworks. The report identifies Birchbox's sustainable competitive advantages based on Porter's generic strategies, focusing on cost leadership and differentiation. Strategic recommendations are provided to enhance the company's online services and brand image, including improvements in product presentation, timely delivery, and effective advertising. The analysis highlights the importance of adapting to market trends and consumer preferences within the competitive landscape of the beauty industry. The report concludes with a discussion on the implementation of these strategies to achieve the company's strategic goals.

Global Business And
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of case study...............................................................................................................1
Internal and external analysis......................................................................................................1
Identification of company's sustainable competitive advantage.................................................4
Strategic Recommendation based on analysis and discussion of implement issue....................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
A global strategy is defined as the business strategy which occupied by the businesses,
organisations or firms conducting in a global business environment and serving consumer
throughout the world. Global business & strategies are mainly linked with the development and
implement by organisations to meet with the short term as well as long term objectives (Adekola
and Sergi, 2016). There are short term goals mainly related with the daily routine activities and
operations of the business and for long term objectives are mainly targeted for increment of
revenues, sales and earnings to run business for long time. To better understand of the report
selected organisation, Birchbox, which is situated in New York city US. It is subscription service
provider company which is sending a box to subscribers and selected sample like four, five and
other connected with beauty related products. In this report consist of overview of the business
and analysis internal and external activities to know about business performance. Along with
apply porters generic model for competitive advantages and provide appropriate
recommendations.
MAIN BODY
Overview of case study
Birchbox is a cosmetic based company which is provided subscription services to
customer and send same of products which is according to their taste & preferences. The
company has been dealing online and products of the company such as perfumes, skin care
items, organic based products and different other cosmetics. The company was established in
September, 2010 by Katia Beauchamp and Hayley Barna. The headquarter of the business
situated in New York City, U.S. If once a time customer subscribe the site after that they take
survey which is known as beauty profile and aims to customise the products as per the future
selection that based on the taste & preference.
Internal and external analysis
Internal Analysis: A analysis is an consideration of organization competency, cost
position and competitive practicality at the market place. In this analysis collect all the relevant
information and according to that measure useful information which is categorised as strength,
weakness, opportunities and threat – a SWOT analysis. In the context of Birchbox apply SWOT
analysis to know inner activities of the business.
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Strength
 Easy to navigate website
 Provide easy subscription facility where categorise people as per the requirement.
 They are offering products step by step at own website where customer easily know
specification about the products (Aithal, 2016).
Weakness
 To enhance the business activities into other countries like Spain, UK and many others.
 The company make assure about the beauty products which can norm to any people
where consist of green beauty brands and invest in organisation where believe in doing
good to the business environment.
 The company require some celebrity top present their products to engage with more
customers know through a celebrity beauty products.
Opportunity:
 Consumers wants high expectation regarding to products but did not receive as a sample
product.
 Customer try samples after that use products as beauty products and make the purchase as
an actual.
 Sustainability of customers are more inclined regarding the betterment of the organisation
as per the business atmosphere that might be high amount of packaging and covert for the
utilisation.
Threat:
 High level competition in online market with same ideas.
 The demand of customer change and wants latest trend based products which is easily not
provided by the company due to slow manufacturing procedure.
External analysis: It is analysis by the organisation to identify all the external factors
that impact in positive and negative manner on the business activities as well as performance. To
analysis these factors conduct PESTLE analysis of Brichbox activities in detailed manner such
as:
Political: This factor is all about how much government and their activities interfere in
the organization or impact the business operations. It includes government rules, regulations,
policies etc. which organizations has to follow in order to maximise the overall revenue. In
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context of Birchbox, consumers are more conscious about the value as well as political
association of brand. Import & export duties also impact the overall revenue or growth of the
company. So managers need to formulate strategies after analysing all the political factors
(Barnett, Darnall and Husted, 2015).
Economic: It includes that how organizations perform their operational activities in order
to become profitable firm. Economic factor include the interest rate, inflation, disposable
income, economic growth etc. In context of Birchbox, due to decline in the cosmetic market will
impact the revenue of the company as well as disposable income also impact the operations.
Social: This factor include the social belief, attitude or buying behaviour of the
consumers regarding products. In the UK, Birchbox have more than one million subscriber as
well as more than 2.5 million active customers. It will indicate that company able to understand
the requirement of their consumers. So it is the opportunity for the Birchbox, so managers need
to formulate their further strategies after analysing the current market trends.
Technology: This factor include the change in the technology which helps in maximising
productivity as well as profitability of the company. Such as change the way of producing goods
& services, way of distributing and way of communicating targeted market. If any organization
implement all these changes then they can get the desired growth or maximise the revenue of
business operations as well. In context of Birchbox, use of technology to promote their beauty
products is the opportunity for the company. They offer subscription service and currently
Birchbox had more than a million subscriber. So before making any strategy management should
identify the different ways which can improve the business performance as well as productivity.
Environmental: It is one the major factor that product is environmental friendly or not
because in the beauty industry, consumers focus on the quality because it can harm the skin. So
before buying cosmetic products they analyse all the factors. So Birchbox has to focus on
material which is used to produce beauty products. They have to ensure that, it will not harm the
skin otherwise organization have to face various complication. Chemical products also impact
the environment so managers of Birchbox need to analyse the market or formulate strategies
accordingly (Bereznoi, 2015).
Legal: This factor include the various laws which protect the consumers rights or make
product more secure such as Federal Food, Drug & Cosmetic Act (FD&C Act) and Fair
Packaging or Labelling Act (FPLA). These are the leading laws which cosmetic companies have
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to follow in order to run their business in this sector. So mangers of Birchbox should ensure that
they follow each and every laws & regulations otherwise government will interfere or oppose the
fine that impact financially as well as affect the brand image of the company.
Identification of company's sustainable competitive advantage
Porters generic strategies defined how a business can occupy the competitive advantages
across its selected market scope. It is helpful model which is adopted by the organisation to
achieve all the competitive advantages and they can sustain their business for long period of
time. This model applied by the Birchbox to interact with scope of activities to achieve targeted
goals and objectives for the business. Cost Leadership: As per the particular strategy the aim of the business to improve
customer engagement so for this require to provide offers and set low cost strategy. It is
mainly utilised by the Brichbox to generate profit as compare of other competitors and
below the average industry price structure use cover large market share. The selected
business usually use this strategy to target markets at a larger market place (Cascio and
Boudreau, 2016). Differentiation: The meaning of this strategy to development of the product as well as
service that provide specific attributes which is depended on the customer requirements.
So there are major focus on the product development to attract customers in
differentiation manner. Through this strategy achieve some benefits that is linked with
strong acknowledgement from end users, good quality of products, betterment of
distribution networks. This strategy applied by Brichbox to increase brand loyalty in
respect of different products and services which are offered by the company. Cost Focus: In this strategy mainly focused on a narrow segment and that attempts to
acquire a cost advantage or differentiation. As per the strategy company offer the
products at lowest possible strategy and select a target with clear niche market by
understanding the dynamics of the market and wishes of consumers to assure about the
cost that keep low. In the context of Brichbox offer its products at low price and mainly
focus on women customer who use beauty products. It is help to become leading online
site and compete with the other rivals who are dealing in same sector (Teh and Corbitt,
2015).
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 Differentiation Focus: The main aim of this strategy to develop differentiate with just
one or small number of target market segment. There are providing offer to special
customer as per the demand and requirement which are categorised into different
segments. There are different alternatives which is clearly provide to competitors and
target a large group of people. It is helpful strategy which is applied by the business to
satisfy their needs and requirement and according to that charging the price from ladies
who love beauty products. Brichbox covers the extra costs and provide clear reason to
prefer the product over and less differentiation (Hartsfield, Johansen and Knight, 2017).
As per the above strategy it is analysed that Brichbox applied the cost leadership strategy
to maintain relation with customer effectively and focus on all the functional areas. To be lowest
cost procedure, a firm is likely to attain and get different benefits such as high levels of
productivity, high capacity usage, Lean production method and effectively use of technology
through manufacturing procedure.
Hybrid strategy is implemented by the Birchbox where they are provide products and
services in adequate price. It is related with a creation of differentiation and according to that
decrease price as compare with the competitors. This strategy take by the business as global
strategy that can supports in targeting in regard of increase market share and continue of loyalty
of customers. It will supports in expansion of the beauty products that offer by the business.
It is helpful strategy for Birchbox in order to dealing with the competition and face
different types of competitors who are working in the same industry. To make business strong, it
is required to apply changes in the procedure and offer products through online mode. Birchbox
is also having their business activities through online sites and wants to expand activities on
other online sites to engage with the customers. This strategy help to conduct business activities
for long time in the market (Lasserre, 2017).
Strategic Recommendation based on analysis and discussion of implement issue
As per the internal and external analysis provide recommendations to business to run
different business activities and help them to execute and apply different strategies. These
strategies can help a business to reach their strategic goals and apply changes as per the
requirement of the company. It is recommended that company focus on the structure and
according to that prepare different strategy which is suitable on business effectively. To engage
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with customer online and supply products required to set effective brand image so for this follow
these instructions such as:
 The online services of Birchbox require to improve and apply effective advertisement
services that influence to customer to purchase their products and once a time must visit
on the company site. All the product presentation should be effective that attract to
consumer.
 To improve services required to deliver product in right time and have not any type of
damage in the product other wise it impact on the goodwill of business.
 By occupying the material in bulk can deduct cost of the business and meet with the
requirements of the business. Along with improve customer awareness regarding to
cosmetic products and services by promotional campaign and define their values and
benefits (Motohashi, 2015).
The company have clear aim to attain all the long term property at the competitive market
where management make effort to set structure through strategy and relate with different
problems that carry out them backward from is competitors involve in the same industry. There
are discussed different difficulties which is related to particular aspects such as:
Lack of resources: Due to fulfil the demand of customer require to finish products but for
this require different resources to manufacturing product. It relates with the cost utilised selection
that based on the digital technologies, charging fees for reseller and training cost to people. Due
to lack of resources impact on the brand image and reseller wants to product to offer end users
and present them as a sample. So it impact on the decision of management of Brichbox and apply
effective strategies at the work place.
Lack of communication: In any transaction require to proper communication with the
customers that helps to increase profit of the business. The company conduct all the activities
online so many time do not provide answer of all problems on time. Brichbox required to set
effective communication channel and sort out the problem on time that helps to remain good
goodwill at the market place.
No physical evidence: The company is dealing online not offline because company have
not any offline store where people visit and select products as per the requirement
(Mourdoukoutas, 2015).
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CONCLUSION
As per the above report it has been analysis that to run any business require to apply
effective global business strategy. These strategies can update as per the requirement and face of
the competition effectively. To prepare effective global strategies require to conduct internal as
well as external analysis that supports to business to carry out those factors that impact on the
good will ad brand image in direct manner. Along with apply porters generic strategy to acquire
competitive advantage and selected cost leadership strategy because of target women for beauty
products. After the analysis company evaluate sustainability through porters generic strategy. At
the end provide recommendations to business and companies effectively analysis all the goals
and objectives in appropriate manner.
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REFERENCES
Books and Journal
Adekola, A. and Sergi, B. S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Aithal, P. S., 2016. The concept of Ideal Strategy and its realization using White Ocean Mixed
Strategy. International Journal of Management Sciences and Business Research. 5(4).
pp.171-179.
Barnett, M. L., Darnall, N. and Husted, B. W., 2015. Sustainability strategy in constrained
economic times. Long Range Planning. 48(2). pp.63-68.
Bereznoi, A., 2015. Business model innovation in corporate competitive strategy. Problems of
Economic Transition. 57(8). pp.14-33.
Cascio, W. F. and Boudreau, J. W., 2016. The search for global competence: From international
HR to talent management. Journal of World Business. 51(1). pp.103-114.
Hartsfield, S., Johansen, D. and Knight, G., 2017. Entrepreneurial orientation, strategy, and
marketing capabilities in the performance of born global firms. International Business:
Research, Teaching, and Practice. 2(1). pp.12-38.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Motohashi, K., 2015. Global business strategy: Multinational corporations venturing into
emerging markets. Tokyo: Springer Open.
Mourdoukoutas, P., 2015. Business strategy in a semiglobal economy. Routledge.
Teh, D. and Corbitt, B., 2015. Building sustainability strategy in business. Journal of Business
Strategy. 36(6). pp.39-46.
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