Bumbox: Choosing a Business Model for a Start-Up

In early 2015, the chief executive officer of Bumbox Logistics Private Limited (Bumbox) faced a challenge. The company, launched in Singapore, provided smart lockers for use by delivery companies and consumers to ensure the safe and timely receipt of online purchases. The lockers offered an attractive opportunity, given their ability to resolve last-mile delivery problems that plagued both logistics companies and online consumers. Despite the promising business concept, 18 months after launching, the business had not gained much traction—or revenue. The chief executive officer was fully aware of the company’s multiple challenges: because parcel lockers were a new concept in Singapore, consumers needed to be educated on their use; the company faced competition from other companies, including the nation’s post office; and while increasing the number of smart lockers would help the company succeed, expanding the network could only be justified once the lockers were being widely used. The company had tried to target three segments—online shoppers/consumers, logistics companies, and e-tailers—but because of limited resources, it needed to focus on one segment only. What strategy should the chief executive officer follow to take Bumbox to the next level?

This case is intended for undergraduate-level courses on marketing, entrepreneurship, logistics, and strategy. It provides insights into the last-mile delivery logistics business in Singapore and the potential growth options available to a smart-locker start-up business. After working through the case and assignment questions, students will be able to<ul><li>describe the e-commerce and logistics business environment in Singapore, specifically last-mile deliveries;</li><li>examine the challenges of the introduction phase of a product life cycle;</li><li>explain the importance of resource requirements to a company’s ability to meet market conditions;</li><li>distinguish between primary and selective demand;</li><li>identify the consumer behaviours involved in establishing habits;</li><li>differentiate the demands of business-to-business marketing from those of business-to-consumer marketing; and</li><li>evaluate different business models.

• marketing, strategy, start-ups