Case Study Dollar Shave Club PDF

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Case Study 1. What is Dollar Shave Club's business model and how does it differ from its competitors? Dollar Shave Club follow a B2C business model. It differs from its competitors on the following aspects: Dollar Shave Club’s value proposition is fair price and highly customer-centric service. The company reduces the unfairness in razor price from monopoly by setting a cheap subscription, $1 for a month supply of razors and blades. The price is cheaper than the once largest shaving brand, Gillette in the US. Market opportunity: Dollar Shave Club possesses more than 50% market on razor blades. They plan to achieve a market space in Europe. With the acquisition of Unilever, Dollar Shave

Club does not face much financial difficulty in raising capital. The company instead focuses on vertical growth in online marketing and branding. Revenue model: The company follows subscription revenue model. They allow customers to have razors and blades home deliver at a subscription fee of $1 a month. Dollar Shave Club cuts down manufacturing cost by manufacturing products inexpensively in South Korea and cuts out retail outlet cost by having an in-house distribution. Competitive environment: Shaving product is not a competitive segment. Dollar Shave Club’s traditional competitor is Gillette, besides, Harry’s and other subscription-based business are their direct competitor. The company’s market position is the second largest shaving business in the US. Competitive advantage: Dollar Shave Club gains first-mover advantage in shaving product subscription. They leverage the high customer loyalty and retention rate. Market strategy: The company is opposed to automated customer service systems, they have real live people that helps customers out and can even make jokes. This differentiates with other online models and create a positive CX, thus, building a high customer loyalty. Dollar Shave Club builds a high commitment to the brand and its members, their customer base is loyal enough to become an individual ambassador for the company. Organizational development: Dollar Shave Club has 300+ employees. They has been focusing on IT infrastructure, including CRM platform, marketing automation platform that sends out customer e-mails, and other customized applications for order fulfillment, telephone-based customer support, machine learning and data science. The company’s management team is divided into functions and operations, including 2 cofounders, CEO, VP of Operations, VP of Product, Director of Engineering, Platform Services and Director of Mobile&Retail Product. Dollar Shave Club built out its executive team with a Chief Digital Officer, Chief Technology Officer, several other technology-focused executives, and a slew of new engineers 2. What are the key elements of Dollar Shave Club's value proposition for consumers? Their products are inexpensive, which easily gets a high market penetration rate. The company also earns a high customer loyalty and retention rate. 3. What revenue model does Dollar Shave Club use and why does it work for them? The company follows subscription revenue model. It works because their service is inexpensive. They allow customers to have razors and blades home deliver at a subscription fee of $1 a month. Dollar Shave Club cuts down manufacturing cost by manufacturing products inexpensively in South Korea and cuts out retail outlet cost by having an in-house distribution. 4. How would you characterize Dollar Shave Club's online business strategy? It is a very customer-centric business strategy, which follows a common trend of today’s business, focusing on customer relationship. 5. How have Dollar Shave Club's competitors responded? Since Gillette lost their market share to 54%, they started to protect its position by launching Gillette On Demand service, which allows customers to order new razors and blades by text message, as well as receive every fourth order for free after three regular orders. Gillette claimed to offer price points that are competitive with Dollar Shave Club. Gillette also responded to criticisms; and add new features at no extra cost. They also sued Dollar Shave Club on copyright infringement....