Dollar Shave Club’s retail disruption. As noted in theweek.com (August 2016), “in a deal that has shaken the stodgy consumer products industry, Unilever announced (2016) it will pay $1 billion to acquire Dollar Shave Club – a five-year-old firm that delivers no-frills disposable blades to subscribers for as little as $3 a month. Since launching in 2011, the Venice CA-based startup has grown to 3.2 million subscribers – earning $152 million in 2015 and becoming a case study in how a disruptive innovator can “break into a highly profitable and overserved industry”. DSC contracts with a South Korean razor manufacturer and then sells the blades directly to consumers over the web. The global razor business has long been built on convincing people they need more and more blinged-out blades at higher and higher prices (Terlep, Wall Street Journal). Dollar Shave Club now claims 5% of the US men’s shaving market long dominated by Gillette (Proctor & Gamble). Since 2010, Gillette’s market share has fallen from 71 to 59 percent.”

1. Which type of Cost Advantage applies to Dollar Shave Club?
2. What sources of Differentiation Advantage does Dollar Shave Club leverage?