Etsy: A "B Corp" Start-Up Takes on Amazon

<p style="color: rgb(197, 183, 131);"><strong> AWARD WINNER - John Molson MBA Case Writing Competition</strong></p><br>When Etsy proceeded with an initial public offering on the New York Stock Exchange in April 2015, it was the second U.S. company to go public as a certified B Corporation. Etsy’s status as a B Corporation meant that social responsibility was ingrained in its mission. However, as an online marketplace for artisanal goods, Etsy faced a number of challenges. Principal among them was the launch of the new online store Handmade at Amazon, a direct attack on Etsy. Etsy had a core base of merchants and buyers, but Amazon had significantly more as well as a greater level of financial security than Etsy. Etsy’s fast growth had also put pressure on its merchants’ ability to offer larger quantities of handmade goods. Many merchants were pressing the company to allow sales from large-scale manufacturing, a path the company had eschewed since its start. Could Etsy find a way to successfully confront these challenges while maintaining its B Corporation ethos?

This case is ideal for a strategic management course at the undergraduate or graduate level that deals with positioning and competitive dynamics. After completion of this case, students will be able to:<br><ul><li>Understand what B Corporation status means to a company and how the status ingrains social responsibility in a company’s mission.</li><li>Analyze the challenges that a start-up business faces if it once achieved early success and then goes on to face significant competition from a larger company.</li><li>Discuss what a business model is and what it means for a company’s strategic positioning.</li></ul>

• B corporation, business model, online distribution, online marketplace