Business Model Innovation at Wildfang

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success with it. Mcilroy would expand this by investing more in a private label. The challenge here is that many other online shops have realized the opportunities of private labels. Thus, it could be difficult to stand out between other labels. The expected gross margin with this model is approx. 50 % (Mathwick, 2017, p. 9).

MSPs are business models creating value by combining various interdependent groups of par- ticipants. Within this approach, the company only distributes via an online shop. It would add a largely third-party assortment to the online shop. The problem with this approach is that the brand could experience a loss of image. The brand presents exclusiveness due to its unique offer and the higher price segment. This could lead to a change of the customer portfolio. It could happen that the company loses ‘Core Loyalists’ or especially ‘Wildfang Exclusives’ which are important customer groups for the company. The expected gross margin with this model is approx. 45 % (Mathwick, 2017, p. 10 f.).

2.3 Justified recommendations

The B&C model seems to be working for the company over the last three years. Wildfang should try to expand this model. Unlike within MSP, the company can keep its exclusiveness. Their offering is unique and the customers appreciate that. If they chose the MSP approach, it would be possible that they would lose some of their loyal customers. Thus, they might have to invest more in marketing and advertising again to address new customers. Furthermore, a pure e-commerce model is not what the investors signed up for (Mathwick, 2017, p. 9).

Wildfang should invest in expanding the private label. Maybe they could also design a collec- tion for the lower price section to target a new customer group. The company should also open more stores maybe also on the east coast like in New York City but also in other big cities such as London, Berlin, Milan etc. Though, it is important to keep the exclusiveness, so the company should not open too many stores.

Even though MSP has better margins with other companies, the model is not appropriate for the company’s customers and its exclusiveness.

3 Final Discussion

Both business models have their pros and cons. The challenge is to choose the approach which is appropriate for the target audience and matches the company’s values. In this case, the B&C model is the most appropriate one because it keeps Wildfang’s exclusiveness and the company can also keep their current customers but might acquire new customers as well. Moreover, the company is successful with this approach and why change a running system? Nonetheless, the investors are familiar with B&C as well and it is the model they decided to invest in. Thus, they might be willing to invest in an expansion of this model.

List of References

Bruhn, Manfred (2003): Relationship Marketing – Management of Customer Relationships.

Harlow, England: Pearson Education Limited.

Collins Dictionary (2017): Definition of Bricks and Clicks. [Online] Available at: https://www.collinsdictionary.com/dictionary/english/bricks-and-clicks [Last access: 23 September 2017].

Kotler, Philip & Armstrong, Gary (2012): Principles of Marketing. Upper Saddle River, New Jersey: Pearson Education Inc.

Mathwick, Charla (2017): Business Model Innovation at Wildfang. Case Research Journal.