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...
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