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Burt's Bees Case Study

By Edited Nov 13, 2013 0 0

Burt’s Bees manufactures and sells skin care and bath products. Roxanne Quimby started the company in Maine in 1984 selling candles made from beeswax that was the byproduct her business partner’s Burt Shavitz bee farm. In April 1997 Burt’s bees had 20 employees and bringing in revenue of $6-8 million. Their margins were about 35% of sales. Quimby has aspirations to sell the company someday but realizes that offers won’t begin until Burt’s Bees brings in $25 million in sales. The question is how to grow the company from $8 million in sales to $25 million in sales?

Quimby and her team had the right ideas to get to the $8 million dollar mark. She constantly pruned her product line keeping the best sellers at the forefront while innovating and creating new products to keep competitive. The problem is that even though the manufacturing business has been successful for Burt’s Bees, it is very competitive and there are major players in the market that will be tough to overcome. There are a couple approaches that they can take: they can pump more money in research and development and try to grow the already successful manufacturing business, or they can reset their focus on different markets, such as retail. The answer is probably found in a mixture of both, though in order to grow the company to $25 million and beyond, innovative ideas will need to be developed and implemented.

Quimby is interested in getting into the retail side of the business, however, since she likes to control the entire supply chain and be closer to the end-user. The beginning of her experiment didn’t seem too promising since she worked 10 hours in a retail store and sold $400 of merchandise, while her VP of Marketing sold $30,000 of merchandise in 15 minutes on QVC. Though it doesn’t put the nail in the coffin for opening retail stores, this example does give ideas as to where Burt’s Bees should be targeting.

Another good strategy to grow the business is by merging and partnering with other businesses. Burt’s Bees has a big niche market and a unique product with their all natural ingredients. Perhaps they could research small startup companies or small local business throughout the country that also have all-natural ingredients and buy them out or partner with them. This could be a great way to get into new markets and grow the product line without having t develop anything new.

Burt’s Bees Marketing should also expand via the internet. Nothing was said in the case study about the internet, possibly because the study was done in the 1990’s, but if QVC is working so well, the internet would be the next best step. They could reach millions of people directly in their home, and would be less costly then opening up a bunch of retail stores.

My final recommendations would be a combination of all of the above ideas, though I would go small on the brick and mortar retail stores. Perhaps these stores could work well in specific markets or boutique malls, but I would focus on the already successful direct marketing and use innovative ideas to grow that part of the business. Burt’s Bees should also pay close attention to their branding. Most people have heard of the big company products, but Burt’s Bees might not be a household name yet. Focus should be on setting themselves apart and education skim care users about ingredients used in the products. I also think that buying other small companies that have unique products is a good idea as well. Strategically merging or buying out other small companies mixed in with new idea to directly market their products to the end-users should launch Burt’s Bees into the $25 million dollar mark and beyond.



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