Amazon in Fashion

John R. Wells; Benjamin  Weinstock; Gabriel  Ellsworth

Case | HBS Case Collection | February 2019 (Revised September 2019)

Amazon in Fashion

by John R. Wells, Benjamin Weinstock and Gabriel Ellsworth

Abstract

According to many analysts and industry observers, in 2018 Amazon became the largest retailer of apparel in the United States and the second largest in the world, behind Alibaba. Much of Amazon’s apparel was made by third-party retailers on its platform, but Amazon had been working to build its own fashion retail skills for more than 15 years and had made a number of acquisitions to this end. Having failed to convince leading brands to sell on Amazon, the company had also launched several private-label lines to boost its presence in fashion apparel. However, in 2017, it had finally convinced leading brand Nike to sell direct on its platform. Christine M. Beauchamp (Harvard Business School MBA, 1997), the President of Amazon Fashion since June 2017, was contemplating next steps.
Meanwhile, leading online and fast-fashion specialists such as ASOS in the UK and Inditex in Spain did not appear to have much to be concerned about. However, many traditional fashion retailers, struggling to build effective multi-channel strategies, were facing slow growth and pressure on margins. Would 2018 mark the beginning of the demise of traditional fashion retailing? What role would the bricks-and-mortar channel in fashion retailing play in the future? What might the future look like for the fashion industry? And what role might Amazon play in it?

Keywords: Amazon; Amazon.com; fashion; fashion accessories; retail; Retailing Industry; retailing; ASOS; Inditex; Multi-channel retailers; online retail; online retailing; positioning; private label; delivery; Spending; Online Technology; Competitive Strategy; Fashion Industry; Retail Industry; Apparel and Accessories Industry;

Language: English

Format: Print

19 pages

Educators

Citation:

Wells, John R., Benjamin Weinstock, and Gabriel Ellsworth. "Amazon in Fashion." Harvard Business School Case 719-481, February 2019. (Revised September 2019.)

In October 2019, Dan Macklin, the newly-appointed chief executive of Salary Finance Inc., was weighing his options for the future of the business. The company’s value proposition was quite simple: partner with employers to offer employees affordable loans that were repaid through automatic payroll deductions. Taking repayments directly from salary, and collecting those repayments in one transaction from the employer, dramatically reduced costs, saving employees large amounts of interest when compared to market alternatives like credit cards or payday lenders.
Salary Finance Inc. was a subsidiary of Salary Finance Limited which was launched in the UK in 2015. By September 2018, Salary Finance Limited had partnered with over 100 UK employers and offered loans to around one million employees. It was at this point that the company decided to try and replicate this success in the United States, and opened an office in Boston, Massachusetts. By October 2019, the US business had partnered with 15 employers, offering loans to around 50,000 employees.
In October 2019, Macklin was contemplating the best way to accelerate the growth of Salary Finance Inc. to hit his 10 million employee target. He was also wrestling with whether he should stick with the core product or add new products to drive sales. This had worked well in the UK where pay advances and savings accounts had proven popular in addition to their core loan product. Salary Finance Inc. was off to a good start, but it remained uncertain how quickly Macklin could grow the business and help more Americans get out of debt.

Case | HBS Case Collection | January 2020

Celata Bioinnovations

John R. Wells, Benjamin Weinstock, John R. Wells and Benjamin Weinstock

In December 2019, Jon Hu (Harvard Business School MBA, 2019) and Dr. Samantha Dale Strasser, co-founders of Celata Bioinnovations, were raising $1 million to launch their company. They had founded Celata less than six months earlier with the aim of redefining the drug discovery process. Celata’s platform used novel data types and a unique data integration process to generate hypotheses about proteins that were involved in the formation and progression of disease. They believed the platform was better and faster at identifying actionable biological targets, increasing the speed of discovery and reducing the chances of failure, promising to lower costs and bring drugs to market more quickly. Their platform had achieved proof of concept during Strasser’s PhD research at Massachusetts Institute of Technology (MIT), when it helped identify and validate a target related to Inflammatory Bowel Disease (IBD) in mouse models. However, full validation wouldn’t come until their platform was used to develop a drug that successfully treated a disease in humans, a process that could take several years.
In the first instance, Celata’s platform was best suited to identify targets for cancers, inflammatory diseases, and neurodegenerative diseases, which collectively presented a global market opportunity of over $200 billion. However, Hu and Strasser were debating which opportunities to pursue. Should they try to improve the efficacy of current drugs, or go for brand new opportunities, indications for which there were no solutions on the market? And if they focused on the latter, should they just look for large market opportunities, or include “orphan” diseases, for which there was a relatively small market? Should they look for small molecule drug candidates, or include large molecule biologics in their search? And where should they operate in the drug development pipeline? At one extreme, they could sell potential drug candidates to established pharmaceutical companies; at the other, they could “go full pharma” and build a new pharmaceutical company themselves.

Keywords: drug development; drug discovery; Drug Trials; Pharmaceutical Companies; Pharmaceutical Company; Pharmaceuticals; therapeutics; Biologics; biotech; biotechnology; biopharmacy company; biochemistry; technology commercialization; technology companies; Drug Testing; Startup; start-up; Startups; start-ups; Startup financing; strategic decision making; strategic decisions; strategic evolution; FDA; Food and Drug Administration; clinical trials; disease management; market attractiveness; Market entry; market opportunities; Health Disorders; Technological Innovation; Technology; Commercialization; Business Startups; Finance; Decision Making; Strategy; Market Entry and Exit; Opportunities; Pharmaceutical Industry; Biotechnology Industry;