Posted: April 13th, 2023

Revision Task essay

Business Consulting Project
1. Business Background Information
Q1.1. What is the business name?
The name of the business is BoxLunch. It is a retailing web-based civic-minded brick-and-mortar business that offers a curated collection of non-licensed and licensed merchandise. The company specializes in products such as accessories, apparel, gifts, home goods, collectibles, and novelty goods based on the theme of pop culture (“BoxLunch Gifts | Get Some, Give Back,” 2021). With every 10$ that a customer spends on buying BoxLunch products, a free meal is provided to the needy person as the company has partnered with Feeding America.
Q1.2. What is the business website address? Copy and paste below.
https://www.boxlunch.com/
Q1.3. What is the business social media (Instagram, Yelp, etc.) handle (if any)?
Sabrina Torres is a social media specialist, and Samantha Pelayo is a Social Media Coordinator at BoxLunch. They are responsible for facilitating strategic programs across all handles that increase the number of followers and engagement of customers. They manage the company’s relationships with influencers and maintain a record of changing climate of digital media and forecast a reaction plan. BoxLunch often develops and implements highly measurable and creative social media campaigns and programs, including planning copywriting, briefs, editorial calendars, and creative strategy. The company has many social media handles that are supervised and operated by these two these include;
YouTube: https://youtu.be/d1H-dHYaoSE
Instagram: https://www.instagram.com/boxlunchgifts/?hl=en
Facebook: https://upload.facebook.com/boxlunchgifts/posts/are-you-a-pop-culture-superfan-with-an-avid-social-media-following-the-boxlunch-/1448858311933522/
LinkedIn: https://www.linkedin.com/company/boxlunch/
Q1.4. What is the business address?
The company is situated in Southern California, at 18305 E San Jose Ave, CS 91748, in the city of Industry.
Q1.5. Who is (are) the business founder(s)/managers (names, tenure in the business, etc.)?
The company was founded and launched by Hot Topics, which is a retailing company in America. Steve Varanes is the CEO of the Hot Topic BoxLunch and Her Universe companies. Justin Ross is a district manager at BoxLunch. The company is in retailing business for seven years.
Q1.6. Any other information about the business (when it was founded, if there has been any change of ownership, etc.)
On 14 October 2015, an American retailing company named Hot Topic launched BoxLunch. The first store of BoxLunch was opened in California, Brea. The company is planning to expand in other cities across the United States. Over five hundred employees are working in BoxLunch. The main competitors of BoxLunch are Sunrise Record, Jerk Subs, Newbury Comics, and the paper Store. Different technologies that are used within the company are Smarter HQ, Google Global Site Tag, SkimLinks, and Curalate API. It specializes in Flower, Gifts, accessories, apparel, novelty goods, and collectibles (“BoxLunch Gifts | Get Some, Give Back,” 2021). The net revenue of BoxLunch Company is about $91 Million.
The company provides several benefits, including dental, medical, vision, discounts for employees, tuition reimbursement, and retirement benefits. The company is committed to giving back to its community in a meaningful way through sustainable business practices. The company donates a free meal to needy people with every 10$ spent on stores. The company has fed more than 30 million people around the world.
Q1.7. How do you (any team members) know this business?
BoxLunch is a small business company in Southern California. We are not familiar with anyone over there, but we have been at BoxLunch several times to buy goods and accessories. The novel retailing industry is full of challenges, but it is focused upon receiving retail consultations, changes in fashions and trends, and it is heavily focused on pop culture themes in its goods and services.

2. Macro Environment Analyses
Q2. Use the PESTEL framework, to discuss and analyze how three of the forces in the macro-environment (e.g., macroeconomic, technological, demographics, etc.) have significantly impacted this business, its operations, processes, target market reach, survival, and profitability during the last year.
Political
Political forces have been felt greatly in all industries the past year, especially the Small Specialty Retail Stores industry because of the pandemic. The government has shut down all non essential businesses for a period of time last year trying to control Covid. While businesses are reopening they have guidelines of store capacity limits, face mask requirements and social distancing that affect business operations. The CARES Act was passed by the federal government in response to the negative effects of Covid pandemic has had on business and many individuals. “Part of the $2.0 trillion stimulus package is the Paycheck Protection Program (PPP), which provides funding for eligible businesses that employ fewer than 500 individuals to receive funding to pay for rent and utilities, in addition to keeping employees on the payroll” (O’Connor, 2020). The government is trying to help small businesses stay aloft and keep their employees on payroll. Another part of the CARES Act is having stimulus checks being paid to taxpayers so they have some disposable income so they can help the economy.
Economic
The Small Specialty Retail Store industry has been having a weak performance the last five years as shown by its annual growth revenue and profit statistics. Annual growth revenue profit from 2015 to 2020 was -0.7% according to the IBISWorld report written by Claire O’Connor (2020). One of the reasons is falling demand and the increase of online sales to discount department stores and online retailers. The pandemic has lowered disposable income, consumer confidence and consumer spending in addition to temporary store closures which all have contributed to an “industry revenue decline of 11.9%” for 2020 (O’Connor, 2020). According to track the recovery (website) in the United States as of March 12, 2021 total small business revenue decreased by 30.2% compared to January 2020. We can see with these statistics and knowing the industry is in the decline life cycle it will be hard for the business to survive.

Social
In today’s society, consumers find social responsibility efforts important and want their preferred brands to participate. According to a survey conducted by Markstein in August 2019 “70% consumers say they want to know what the brands they support are doing to address social and environmental issues.” BoxLunch defines itself as a “civic-minded web plus brick and mortar based specialty retailer offering a curated collection of licensed and non- licensed merchandise”(website). The company has partnered with Feeding America and has a promotion where every $10 spent in-store or online secures one meal on behalf of a local food bank. Since their opening in 2015 BoxLunch has donated 80 million meals. Even in a bad economic year like 2020 BoxLunch has guaranteed a minimum of 5 million meals to Feeding America.This shows BoxLunch continued dedication to social responsibility efforts.
3. Industry Analysis
Q3.1. In what industry does the business fall?
According to the Boxlunch official website, the company classifies itself to be in the specialty retail industry. IBISWorld does have it fall in the “45399 – Small Specialty Retail Stores in the US”(O’Connor, 2020).
Q3.2. According to the IBISWorld, is this a “fragmented” (low concentration) or “consolidated” (high consolidation) industry in the U.S.?
According to IBISWorld, the small specialty retail industry is fragmented, which means that there is a lack of scale economies, very low barriers of entry, and their brand loyalty is predicated on their set differences. Boxluch really sets itself apart from other specialty stores by offering products, such as clothes and collectables, that are focused to a certain group of people.
Q3.3. If the industry is “consolidated”, what companies are major players (list them) in this industry in the U.S., and how much market share do they each have (put their market share next to them in the list)? If it is a “fragmented” industry, in one paragraph, mention “there are no major players AND justify how the industry has become fragmented”
The specialty retail industry is fragmented so there isn’t a limited number of companies making most of the revenue. The industry is so fragmented that the top four largest businesses in the industry “account for an estimated less than 10.0% of revenue in 2020”(O’Connor, 2020). Some of the reasons that the industry has become fragmented is due to lack of scale economies, local branding, and low entry barriers. Due to having small to medium size businesses in the industry, it does not come to a surprise that these businesses focus their products on a specific range, so it is rather difficult to meet the demands of a wider audience. Plenty of businesses can enter the industry since there a low capital investment in opening a business as “Capital investment is mainly in fixtures and fittings, cash registers, point-of-sale systems and storage units”(O’Connor, 2020), meaning that it isn’t too expensive to open and compete in this industry.
Q3.4. What is the industry stage in its lifecycle (embryonic, growth, etc.) and how do you justify your answer.
The industry life cycle for the specialty retail industry would be considered in decline. While the industry is making money, the rate at which it is making profits is not keeping up with the rate of the U.S economy. The GDP of this particular industry would actually “increase at an annual rate of 0.4%,” but the US overall GDP is projected to “grow at an annualized rate of 1.9%”(O’Connor, 2020). Due to the presence of covid, the decline was really accelerated. Specialty retailers really suffered a huge loss as “the corona cut the U.S. apparel and accessories specialty store businesses in half last month”(Clark, 2020) for March in 2020.
Q3.5. Now that you know this industry’s structure and lifecycle stage, what are the implication of the industry structure for the business you are investigating?
For this particular industry it is imperative, due to the nature of the industry, it is important to offer distinctive and different services and products to its customers, leading to a high level of competition, low entry, and local branding. The level of competition between businesses of the same industry are not too high due to the fact that the merchandise that they sell are often very different between one another, but the competition among other industries, especially among department stores and online retailers, is much higher. Departments stores and online stores are able to use the economies of scale to “maximize cost saving by purchasing large volumes of inventory at once”, and “online shipping”(O’Connor, 2020). Companies must be able to counter the department stores by offering different products because settling with a product or services that can be are replicated by other industries can create problems which can lead to stores closing such as “Aeropostale, J.Jill, Tailored Brands, Lucky Jeans, and J.Crew” (Petro, 2020). With the rise of covid, online businesses such as Amazon increased as it was reported in the “U.S. e-commerce sales grew more than 30% between the first and second quarter of 2020”. As more people look for online shopping, businesses in the specialty retail industry must be able to adapt to that change either by selling their merch online or by making “their in-store experiences even more extraordinary for those who visit in person”(Yohn, 2020).
4. Business-Level Strategy
Q4.1. What are the market segments that this business serves?
The business targets children, teenagers, and adults who are big fans of the pop-cultural theme. The company mainly manufactures accessories, collectibles gifts, and toys related to the entertainment industry, such as music, films, television, and video games (“BoxLunch Gifts | Get Some, Give Back”, 2021). The company is committed to serving its customers in the best possible way by making innovative use of technological equipment.
Q4.2. What customer needs and desires does the company satisfy with what products/services?
The BoxLunch Company provides its customers with an amazing shopping experience through its competent workforce that impresses its customers through the knowledge of product and their use of skills in customer expertise. The customers are encouraged to spend their money on buying goods from BoxLunch due to its partnership with Feeding America. Customers are likely to buy products due to the company’s commitment to a good cause.
Q4.3. To develop your answer for Q4.4. about the “Business-Level Strategy”, fill out Table 3 with relevant information from the company’s website, social media, Yelp reviews, etc.

Table 3. Breakdown of Business-Level Strategies
BoxLunch: Entertainment Earth: The Paper Store:
Target market(s):
It is a retailing web-based civic-minded brick and mortar business.
The company targets Children, teenagers, and adults who are fans of the Pop Culture theme.
The company serves a broader market segment with its variety of good and the good cause purpose.

It is a wholesale and retail business.

The company targets toddlers and preteens, and teenagers.

The company serves a focused market (MGA Entertainment, 2021).

It is an American retail company.

The company targets children, teenagers, and adults

The company serves a broad market (“The Paper Store,” 2021)

Prices:

The price of BoxLunch products range from $10 to $50.

The business follows a low-cost pricing strategy

The price of goods ranges from $5 to $150.

The business follows a differentiator pricing strategy.

The price of products ranges from $5 to $150.

A differentiator pricing strategy is followed.

Range of products/services:

BoxLunch offers accessories, apparel, novelty and gifts, home goods, and collectibles for children, teenagers, and adults.

These products are based on Pop culture themes.
The business emphasize differentiated offerings for people of different ages

Licensed collectibles like props replicas, clothing statues, action figures, vinyl figures, games, toys, dolls, gifts.

The business emphasizes basic standardized offerings.

Accessories, apparel, jewelry, stationery, bath and body products, toddler and baby gifts, jigsaw puzzles, kid’s toys, books, greeting cards.

The business emphasizes offering customized, differentiated products.

Products/service features

BoxLunch offers products like bags, shirts, toys that are fun for children, convenient, accessible, and of high quality.

Entertainment Earth sells toys, games, action figures, and action figures that are based on fun and image and of peculiar shapes and designs that fascinate children.
The company offers products and services that are convenient, environmental friendly, and of high-quality such as products related to women demographics and toys based on fun and entertainment themes for children.

Q4.4. Based on the information that you have gathered in Table 3, what is the business’s “Business-Level Strategy”? Mark one from below.
a. Broad Low Cost
b. Focus Low Cost
c. Broad Differentiation
d. Focus Differentiation
e. Blue Ocean
f. Stuck-in-the-Middle (when the business does not follow any of these strategies clearly and is confused)
Q4.5. In one paragraph (4-5 sentences), use the information that you have provided in Table 3 to justify your answer about what “business-level strategy” the business you are examining is pursuing?
The BoxLunch Company uses the Focus Low-Cost Business-level Strategy that enables BoxLunch to gain a competitive edge in the market and increase profitability. The company has targeted the Pop culture niche and offers products at a low-cost ranging from $5 to $ 50. Moreover, the partnership with Feeding America is based upon spending $10 on BoxLunch and giving a free meal to needy people (Marren, 2007). BoxLunch is committed to growing by targeting customers that are a fan of pop themes and offer fancy goods at low cost.
5. Strategic Diagnosis and Recommendations
Q5.1. Tier 1 Non-Customers: What market segments sit on the edge of this business (use its offerings reluctantly and/or minimally)?
Market segments that sit on the edge of BoxLunch include online shoppers and older generations. Older generations use its offers minimally because the store is mostly marketed towards young adults, teens, etc. who have an interest in pop culture from a variety of generations. BoxLunch is not typically on the radar for older generations unless, among other reasons, they are fluent on social media or have bought gifts for their children/grandchildren. The pop culture references that the store has to offer through its products are movies, games, and references that these generations grew up with and have passed down to their children and grandchildren. Older generations could find a lot of value in the products offered by BoxLunch by reliving their past entertainments and pop culture that they grew up with.
Q5.2. Tier 2 Non-Customers: What market segments could strongly benefit from this business offerings, but do not consider it, because the way it is currently being delivered makes the business seem irrelevant to them or out of their financial reach?
Market Segments that could strongly benefit from BoxLunch’s offerings are online shoppers. Online shoppers have similar purchasing motivations and habits as in-person, retail shoppers (Ganesh et al., 2010). The major and often time only difference is the experience that is achieved by shopping at a store in-person versus shopping online. Shopping at BoxLunch offers an experience as much as it offers products and social consciousness. Most shoppers don’t go to BoxLunch expecting to buy something, so a lot of purchases are made on an impulse. The “experience” portion of shopping in a BoxLunch store is only achievable online by developing an engaging and responsive website that will create an impulsive feeling amongst online shoppers. This market segment could benefit from the pop culture themed products and the socially conscious donations that BoxLunch offers if only the online shopping experience can be optimized.
Blue Ocean Recommendations
Q5.3. Based on your research on this business (environmental impacts & business-level strategy), and the industry (fragmentation vs. consolidation, competitiveness, etc.), in 4-5 sentences propose one factor that should be raised above the industry standards to maintain its current customers and to attract at least few groups of its non-customers.
The current business model that BoxLunch implements has already created an opportunity for the business to implement a blue ocean strategy. The engagement in socially conscious operations has created value for the company that the industry has potentially never seen. However, a blue ocean strategy typically requires 4 major changes to the business strategy. These strategies include eliminating unnecessary costs, reducing required costs, raising high value factors, and creating value (Hill et al., 2020). The social consciousness of donating meals is only one factor that ultimately adds value through a blue ocean strategy. This factor creates value, but does not reduce or eliminate costs that the standards of the industry require.
Proposal: Considering the retail industry is in the declining stage, BoxLunch could create value and reduce costs by investing in the development of an online shopping experience. This would be an opportunity for BoxLunch to access the market segments that are on the edge of becoming major customers. With the existence of Amazon, and the standards that it has set on online shopping, BoxLunch could implement a similar experience for shopping for its products online. Amazon’s business model has “reinvented management theories and approaches…” because it has set an industry standard that “…blurs or redraws traditional marketing boundaries” (Walton, 2012). Creating an ecommerce website that provides a good customer experience and involves exceptional customer service would set BoxLunch above its rivals and other competitors in the declining industry. Certain rewards programs and access to reliable product information could create a similar “impulse buying” experience that some customers have in person in the physical stores.
Q5.4. Using the insights that you have obtained from your search on this business and the industry, in 4-5 sentences propose one product/service (feature) that the industry has never offered, but it can be created by the business that you have investigated?
BoxLunch has established itself as a business that is socially conscious and has a very focused business strategy. This means that the business is involved and engaging with not only its customers, but also the local community and society in general. A product that the business can offer is similar style products that it already sells, but with designs, artwork, and craftsmanship from local artists around the community. This would create an incentive for customers to support local artists by purchasing products through BoxLunch that would support the business, the artists, and food shelters at the same time. This would be a similar business model as Etsy, “an e-commerce website that focuses on handmade or vintage items” (About, 2021), but more streamlined and can maintain the current experience that BoxLunch offers. Not only would BoxLunch create a more engaged community, it has also been suggested that “arts are incorporated into the organization for instrumental purposes… [or] for creating value in the components or products themselves” (Estes et al., 2018, p. 400)

List of References [Insert the list of references below]
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Estes, Z., Brotto, L., & Busacca, B. (2018). The value of art in marketing: An emotion-based model of how artworks in ads improve product evaluations. Journal of Business Research, 85, 396–405. https://doi.org/10.1016/j.jbusres.2017.10.017
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Petro, G. (2020, August 17). Part deux – specialty retailers next to die in retail rebirth. Retrieved March 23, 2021, from https://www.forbes.com/sites/gregpetro/2020/08/14/specialty-retailers-next-to-die-in-retail–rebirth/?sh=2eb6ae9174bb
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