BabbaCo Case Analysis Unit


BabbaCoCase Analysis


JessicaKim went through the hurdles that new businesses with new products inthe market go through. This is evident in the challenges sheencountered in marketing the new product. Most consumers were onlyinterested in trying the product out of curiosity and not out ofcommitment or loyalty to the brand. As a relatively new brand, itcould not command loyalty or brand equity. Attempts to turn thesecurios customers into loyal customers require intensive marketing andincentives. All these amounts to extra costs to the firm meaning thatnew businesses require intensive capital to enable them remainoperational before they break even.

Thesupply chain adapted by a firm is determined by the nature of theproduct and industry. As a new firm with a new product, Kim relied ondemand push supply chain strategy where she anticipated marketreaction to a new product as opposed to the firm reacting to demand.The firm thus resulted to pushing the product to the consumer byadvertising and product placement. Jessica sought out mommy-bloggersto review their products and even offer links to their website.Additionally, the firm sought to link with affiliate firm such asLinkshare and Groupon to increase product exposure to the market.However, the firm has integrated this with a pull strategy throughdirect marketing via emails, word of mouth referrals, customerrelationship management and sales promotions and discounts.

Newbusinesses may face staffing and skill set problems. Jessicaacknowledges that she cannot achieve everything alone. She graduallyadded required skills into the firm. However, the scope of workinvolved keeps changing and hence needed skill set. For instance, shehad not hired an IT guy hence she was forced to outsource.Outsourcing maybe viewed as cheaper option in some cases but it isnot always the case as Jessica realized. Only peripheral aspects thatdo not interfere with the product offering can be outsourced. Onhindsight, outsourcing prolongs the time a firm can respond to marketneeds hence delays in the supply chain.


Bussang,J. &amp Jain, G. (2012). BabbaCo.Harvard Business School.