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Unformatted text preview: Roxanne Quimby
“A story of Success” Presented by
Rami C. Dirani To
Professor Sharon Ann Wulf PhD
Professor Cambridge College
The Road to the peak A Story of Success - 2 Burt’s Bees Company was launched in 1987 in a one room schoolhouse by Roxane
Quimby and Burt Shavitz with a $400 initial investment which was pooled from their savings.
Today the Clorox Company has acquired Burt’s Bees for $295 million. What was the true story
behind this company’s success?
Burt’s Bees started by selling candles made from beeswax which was created as a byproduct of Burt's honey business. The concept behind this product was the simple way of
manufacturing the products with minimal use of processing such as distillation/condensation,
extraction/steamed distillation/pressure cooking and hydrolysis to maintain the purity of those
ingredients. (Natural processes vs. Non-natural processes).
At the time of the case, Roxane Quimby was the head of the company. With all the
vision and passion she had for the company she was able to handle the business and maintain it
on a successful level, yet she still needed help in the management of the company. The company
was growing so fast because the product provided to customers was top quality. The product was
especially attractive to customers living in urban areas who were looking for a natural product so
they could feel more connected to the freshness and simplicity of nature.
The product was manufactured in a simple way using only natural and high quality
ingredients. “Roxanne noticed that women always turned a candle over to look at the bottom
before purchasing it. Roxanne knew that ensuring that each candle was cut to a fine finish,
especially on the bottom of the candle, would signal to consumers that the candles were of the
ultimate quality.” (burtbees.com/Our history).
To maintain the company’s growth and its high profit margins, Roxanne had search for
solutions to the high taxes being imposed on the company as well as the high transportation
costs. She made a brave move and decided to shift the company’s operations from northern
costs. A Story of Success - 3
Maine (usually the last top on most truckers’ routes) to North Carolina. She also worked out a
deal with the Department of Commerce to lower the company’s taxes by 10% and good deals on
many facilities. Their new place was a maximum12 hour drive from any large population area of
the country. This solved the problem of high transportation costs. Moreover, in Maine the
company was lacking experienced laborers, while in North Carolina there was a large population
of skilled laborers as well as people who could help in operations and management. And with
the introduction of machine power to the business Burt’s Bees was able to profit from its
economy of scale:
“We set up shop in an 18,000 square-foot former garment factory in Creedmoor in 1994,
and opened our first retail store the following year in nearby Chapel Hill. By this time, we had
50 products, some of which were even being distributed as far away as Japan. And we were
embracing automation, one piece of machinery at a time ensuring all the while that it maintained
that homemade quality and feel. In the spirit of recycling, we acquired a giant second-hand
mixer from the cafeteria at nearby Duke University.” (burtsbees.com/ Our History)
With the high quality of their product and the low taxes offered by the North Carolina
department of commerce as well as expert laborers and the introduction of machineries to the
manufacturing process, Burt’s Bees maintained a high level of profitability and expansion.
manufacturing A Strategic Winning Decision A Story of Success - 4
The decision taken by Roxanne in 1993 to move to North Carolina turned out to be a
wise decision. Proof of this is the sale of the company to the Clorox Company for $295 million.
That is a great return on an initial investment of only $400.
However, there were other choices Roxanne and Burt could have made to expand the
company, keep the business in their hands and invest in other businesses, including Roxanne’s
dream to work with Indian rural women on product design.
Roxanne could have taken more time in negotiating with the Maine department of
commerce. She barely followed up with them and in their turn, at the department of commerce,
they did not take the company’s relocation plan in serious either. Instead, they assumed that
Roxanne was using the push strategy in order to get some benefits or facilities, which explains
that she could have implied a different approach and smarter kind of pressure on the department
to make them realize her sincere will in moving the whole business to North Carolina. That
could have helped in a negotiating for a better agreement. In that case, the Maine department of
commerce could have responded to her request in lowering the taxes and offering some more
facilities. She could have presented the argument that if the company moved out of Maine, the
city would lose 40 jobs and an important investor. Maybe her entrepreneurial intentions toward
relocating to North Carolina were stronger then getting her into a one way negotiation process,
where Roxanne obviously denied herself choices because she had in mind a better alternative,
and that affected the whole negotiation pattern. Facing that truth, only the experience itself,
would tell whether or not staying in Maine could create better opportunities in term of growing
the business. However, Roxanne was holding a strong card in the negotiations simply by being
the second largest investor in town.
If such scenario, she could have stayed in Maine, got lower taxes and more facilitation.
As a result, that could have enlarged the profit margin, enhanced the chances to expand and
As A Story of Success - 5
grow, provided more local jobs and helped training more skilled laborers. Expansion would have
meant building special compounds with all the required facilities for the company and Roxanne
could have focused on her dream about working with the Indian women.
could Burt’s Bees Today
Burt’s Bees today is owned by the Clorox Company, a manufacturer of various food and
chemical products. In 2007 the company launched a sun care line and expanded into body wash,
with sales topping $250 million. They became a household name—selling in nearly 30,000 retail
outlets, including Target, Kroger and Rite-Aid, with satellite offices across the United States,
UK, Ireland, Canada, Hong Kong, and Taiwan. They also created a public service announcement
to raise awareness on Colony Collapse Disorder.
In 2008 the Naturally Ageless line was introduced and the product line was enhanced to
include a line of lip glosses. They also expanded their market into UK, Australia and Japan.
Today, the company is celebrating its 25th anniversary,
“We never thought 25 years would go by so quickly! We celebrated our 25th Burt Day
with our loyal fans by giving them the gift of well-being. For 25 days, we gave away great Burt
Day gifts, including 25,000 Beeswax Lip Balms!” (burtsbees.com/ our history).
They expanded their market in 2009 to Korea, and they were named the second greenest brand
in the US. You can find the company on facebook using the power of that engine to keep up
with its fans.
Today, Burt’s Bees is known for its social commitments and responsibilities, and offers a
lot of facilities to the community by providing helpful business models on its website. It also
helps preserve the environment through many programs and practices such as The ECOBEES
(Environmentally Conscious Organization Bringing Environmentally Empowered Solutions),
(Environmentally A Story of Success - 6
which aims to “pioneer and champion environmentally friendly business practices and to share
that knowledge both within the company and with our key business constituents”, because there
is a certain belief at the Burt’s Bees
“that in order to make the world a nicer place to live, we need to start at home. That's
why we support, and are actively involved in, several community initiatives right here in our
hometown of Durham, North Carolina. This range from social responsibility to sustainability to
overall well-being and the list is growing.” (burtsbees.com/community).
overall References • http://www.burtsbees.com/, November 2009.
November • Jeffry A. Timmons, 1997, (Boston college) ...
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- Spring '10