Threadless: The Business of Community Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Business Model

The business model of the company is community driven, which works best for the company. Threadless is using a different business model as compared to the traditional retailers in the T-shirt designing market. Despite being different from the traditional business models, the community driven business model of Threadless is not just unique, but also inspiring. This business model has some key aspects that are quite impressive and attractive, which can be viewed as the source of attraction in the coming eras.

There are no in-house designers such as the competitors and designing is done through crowdsourcing, which is very cost effective. The only cost that is endured by the company is the manufacturing of the product. Competition provides an opportunity to the owners of the company to initiate this entrepreneurial venture by leveraging the community for design. The designs are done by the community and processed by Threadless, which works effectively for the company so far.

Although the question is there about the future of the company however, through this business model the company has witnessed significant growth since its inception. As it operates as an e-commerce channel, the company does not have a physical retail outlet, which is a major point of parity for the industry that is missing.

However, there are certain drawbacks, which are in the business model of the company, but it also offers multiple benefits that have allowed the company to witness tremendous growth in all these years.Therefore the discussion needs to comprise the costs and benefits associated with the business model.

Advantages and Disadvantages

As stated above, there are certain advantages and disadvantages, which are associated with the business model of Threadless that are important to address in order to gain strong rationale about the business model. The business model is vastly dependent on crowd sourcing that offers multiple benefits, but is also a threat and a disadvantage as well. This is the reason why this point is somewhat the main strength of the business model as well as a major weakness.

However, by analyzing the advantages of the business model, it is presumed or assessed that benefit, which the company is gaining by perusing such a unique business model is the cost benefit. The normal retailers have in-house designers that are assigned with the task to developed the designs and are employed, which increases the fixed cost as the in-house designers are ought to be paid.

On the contrary, Threadless is leveraging the community for the designs and is crowd sourcing the designs,which is the reason the need of in-house designers is eliminated, which also eliminates the unnecessary cost associated with the business. This allows the company to price the products appropriately by keeping a competitive price and also allowing the company and the owners a handsome margin per unit.

However, this is a point of parity in the industry that should be catered, but the uniqueness of the business model is not allowing the company to do so. Therefore, the company gains benefit despite missing a major point of parity and till date, this approach is working effectively for the company.

However, the company also has some major benefits that are also occurring through the business model of the company. The company is focusing on outsourcing and does not rely on manufacturing, printing, screening etc. All these activities are outsourced and the company only buys plain T-shirts in bulk, which are sent to different printers and are received at the warehouse. This approach is cost effective for the company and is highly differentiated from what being followed by traditional retailers and manufacturers.

Aside from the above stated cost benefit, the company is also gaining such benefit by operating online and following e-retailing. The company does not have any physical presence in the form of an outlet or a retail outlet. This allows the company to pay no wages to the sales associates and do not have to worry for the sold and unsold merchandise. Thus, the company saves a huge amount of cost in this regard and avoids the mess of handling operations on daily basis and adding additional cost between the customer and the company.Threadless The Business of Community Case Solution

Although all the above stated benefits are the point of parties in the business however, the company is neither the sole manufacturer nor the designer but is serving as the distributor. The risks associated with the business are minimized by the company by following such approach, which is the reason why the company is quite successful as far as the growth and financial stability are concerned..................

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