Scale Business Case

Question 2
An example of a business model that combines product and service rather than
focusing on either product or service only is Product-as-a-Service (PaaS), also known as
Product-Service Systems (PSS). Examples of brands that subscribe to the PaaS business
model are American Xerox and HP, and the Dutch Philips (Quijano, 2020). Both Xerox and
HP are copy and print giants that have been implementing PaaS through their managed print
services where, instead of paying for printers and supplies upfront in order to own them,
companies pay for service contracts that encompass both physical products (printers and
supplies, including printer replacement) and services like printer maintenance and repairs.
While both companies share the same business model, they are significantly different in
terms of the main sources of competitive advantage. The companies’ sources of competitive
advantage can be best understood by looking at their respective SWOT analyses. Before the
arrival of its competitors in the 1970s, Xerox ruled the document imaging industry and
market (Habib & Yazdanifard, 2017). Besides lack of competition, its dominance was
facilitated by its strengths which included being a pioneer brand in document imaging (so
much so that in many parts of the world, “Xerox” became synonymous with “photocopy”), a
global presence in more 160 countries, and high investment in research and development
(informed by a strong belief in innovation). However, the company’s main weakness was its
strategic management failure, especially as demonstrated by its failure to grasp the
importance of personal computing and printing in the 1970s. Because of this failure, the
company’s main threat remains fierce competition from the likes of HP. HP’s main source of
competitive advantage, on the other hand, is its diverse product line: besides having a highly
diversified printer range, the company is also a dominant player in consumer electronics,

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including PCs and laptops. On its part, Philips implemented PaaS by allowing airports like
the Schiphol Airport to rent its lamps on a yearly basis. Philips’ main source of competitive
advantage is its strengths which include strong R&D, market leadership in different
categories, and strong financial performance and liquidity (Onyusheva & Leenhouts, 2021).
The key elements of SCALE’s successful business strategy are the company’s ability to use
its proprietary eCommerce and digital marketing platforms to transform consumers’ end-to-
end online shopping experience while enhancing their brand loyalty and retention.
Question 3
Essentially, SCALE’s business model is PaaS, even though its implementation may
be different from that of Xerox, HP, and Philips. By building and deploying next-generation
CPG brands in the beauty, health, and wellness industries, the company is focusing on the
physical product aspects of the consumer experience. On the other hand, by using its
proprietary eCommerce and digital marketing platforms to transform consumers’ end-to-end
online shopping experience while enhancing their brand loyalty and retention, the company is
addressing the service aspects of consumer experience. In terms of implementation, the three
companies discussed in Question 2 implement PaaS by allowing their customers to subscribe
to or rent their products rather than paying upfront to own them. On its part, SCALE
implements PaaS by affording its customers a seamless experience not just in the physical
product itself but also in the ways the product is encountered and accessed. In my view,
SCALE is a sustainable business model because, increasingly, consumers are looking for
superior experiences in all aspects of the consumer journey (Quijano, 2020). In other words, a
great product is of little value if the consumer must jump through hoops to access it. On the
other hand, ensuring that the consumer can shop for the product from the convenience of their
home or office and have it delivered to them greatly enhances the consumer experience. One
of the ways in which the PaaS model relates to the circular economy is that, compared to

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traditional linear models, the PaaS model makes it easier for products to be recycled or
reused. With a linear model, once a customer does not need a product anymore, it ends up in
the trash. With SCALE’s model, on the other hand, it may be possible, for instance, for
customers to take their bottles of perfumes to a refill center for them to be refilled. Besides
contributing to a circular economy, other possible advantages of the PaaS model to SCALE
include the greater opportunities to put customers and their needs first and to build longer-
term relationships with them, relationships that ultimately make it possible to earn more from
each customer through a subscription model (Quijano, 2020).
Question 4
Companies that have adopted a 360-degree model similar to that of SCALE – in
which they not only create brands that offer high-quality products but also provide cutting-
edge health and wellness content and tools meant to empower people to make the right health
decisions – include niche companies involved in the manufacture of organic skincare
products. Examples include the French-based Archiman, BALADE En Provence, and
Lodaites (Bologna Fiere, 2019). These companies share several similarities, including a
business model that is markedly different from that of large corporations that specialize in the
manufacture of synthetic cosmetics, including France’s L’Oreal Group, the UK’s Avon,
Germany’s Beiersdorf AG, America’s Estée Lauder Cos Inc., and Japan’s Shiseido Co. Ltd
and Kao Corp (Maria, Constantin, Radu, & Alina, 2011). While these large cosmetics
manufacturers have extensive and differentiated product ranges targeted at different segments
of the mass market, the niche players specialize in the manufacture of natural cosmetics that
are mostly targeted at the premium and luxury markets. In other words, their target market is
the health-conscious consumer who is willing to pay premium prices for healthier and
environmentally friendlier skincare products. Another similarity these niche players have in
common is that most of them are small and fragmented, with none of them controlling an

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appreciable share of the market. This is despite the fact that many of them operate
internationally. By contrast, the top ten large corporations involved in the manufacture of
synthetic cosmetics control about 50% of the global cosmetics market (Maria et al., 2011).
Apart from their ability to create and deliver high-quality educational content on a consistent
basis, a common success factor for these niche players is their ability to source the finest
natural ingredients. For instance, Archiman, a new brand of men’s personal care products,
promises to shake up the rules of natural skincare by availing products with 95% natural
ingredients. BALADE En Provence promotes itself as an ethical brand whose mission is to
consistently deliver moments of happiness through certified organic and vegan plastic-free
solid cosmetics and beauty products. On its part, Lodaites developed out of three sisters’
desire to share their simple yet powerful and proven skincare regime, which the women in
their family had handed down the generations.
Question 5
At SCALE, we create value for our customers by helping them define their business
models, analyze and clarify their competitive advantage, and build great websites that clearly
communicate their unique value propositions. All these services are designed to help our
customers win more business in their respective categories. In the following paragraphs, we
elaborate on each of these services.
Defining your business model
We believe that running a profitable business in the health, beauty, and wellness industries
starts with having a clearly defined business model. A business model is how your company
proposes to create and deliver value to its customers and make money in the process. While
there could be as many business models as there are businesses, from our several years of
experience, we have learned that a combination of two business models works especially well

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for companies in the industries we serve: Product-as-a-Service (PaaS) and consistently
delivering high-quality educational content and tools aimed at empowering your customers to
make informed health decisions. The practical implication of the latter part is that in addition
to a website, ideally, your company should have a blog and social media accounts through
which to share the content and engage with your customers.
Clarifying your company’s competitive advantage
Ideally, every company should have at least one thing that it does exceptionally well
(its core competence) that makes it stand out from its competitors. That thing could be your
ability to source and consistently unique stock products that deliver great value to consumers.
Or it could be the ability to always create high-quality educational, non-sales content (the
kind of information people would be willing to pay for) yet give it away free of charge.
Whatever makes your company tick, we will help you discover it and use it to your
advantage.
Website design and development
Having clarified your business model and the source of your competitive edge, it is time to
weave that information into a website that will wow visitors to it and cause them to want to
hang around (and learn more about your company in the process). We love unique websites
that bring out your company’s personality (yes, we like to believe that, just like people,
companies to have personalities.

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References

Bologna Fiere. (2019). Extra-ordinary gallery: The green selection. Bologna: Bologna Fiere.
Habib, R. M., & Yazdanifard, R. (2017). The Underlying Reasons behind Xerox’s Strategic
Management Failures and Possible Remedies that Could Have Been Implemented.
International Journal of Management, Accounting and Economics, 4(8), 796-810.
Maria, G. A., Constantin, B., Radu, C., & Alina, C. (2011). Competitiveness and performance
on the cosmetics market. Annals of Faculty of Economics, 1(2), 681-686.
Onyusheva, I. V., & Leenhouts, F. A. (2021). The strategic overview: Can Philips survive
with its recent substantial strategy changes? The EUrASEANs: journal on global
socio-economic dynamics, 1(26), 33-42.
Quijano, C. (2020, June 17). What is Product-as-a-Service (PaaS)? Retrieved from Firm
House: https://www.firmhouse.com/blog/what-is-product-as-a-service-paas