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ARCHIES Vs.

VINTAGE
Are we in the business of greetings??

Introduction
A case is usually a "description of an actual situation, commonly involving a decision, a challenge, an opportunity, a problem or an issue faced by a person or persons in an organization."1 In learning with case studies, the student must deal with the situation described in the case, in the role of the manager or decision maker facing the situation.

Benefits from the Case Method:


Cases allow students to learn by doing Cases improve the students ability to ask the right questions, in a given problem situation Case studies expose students to a wide range of industries, organizations, functions and responsibility levels. Cases studies strengthen the student's grasp of management theory, by providing real-life examples of the underlying theoretical concepts Cases provide students with an exposure to the actual working of business and other organizations in the real world

Case studies reflect the reality of managerial decision-making in the real world, in that students must make decisions based on insufficient information.

Introduction
Time was when greeting cards could be found tucked away in a corner of a crowded stationery store, where they were generally stored in discreet boxes labeled 'birthdays', 'anniversaries', brothers' or 'sisters'. Then came the greeting card revolution, with entire stores devoted to a single brand of cards, and full fledged companies devoted to the design and manufacture of greeting cards. Two of the leading players in the Indian greeting card business, Archies Greetings and Gifts and Vintage Cards and Creations

Core Competency : Greeting Cards

Complimentary business : Gifts and Perfumes

ARCHIES
Archies Limited (earlier called Archies Greetings and Gifts Ltd.) is an Indian company based in New Delhi. Archies was the brainchild of Delhi-based Anil Moolchandani (Anil), started in 1979 Major Years: 1980- The company's main product, greeting cards, was introduced. 1995 - The company went public.

ARCHIES
2000 - Following the increasing popularity of e-cards, Archies started its online portal archiesonline.com. 2002 - The company expanded its product range to include artificial jewellery, crystal ware, chocolates and perfumes, and accordingly changed its name to Archies Limited. 2005 - Archies had far outgrown the identity for cards and was known as a company with complete gifting solutions.

VINTAGE
Founded by Anil Kapur and Rajesh Vaishnav in the year 1983 Manufactures and markets cards 3000 designs and 26 distributors Agreement with Hallmarks Cards and Walt Disney Agreement with Mattel Inc. for rights for Barbie brand

ARCHIES
Corporate Vision of Anil Mulchandani : To be the world leader in posters and greeting cards. Mission Statement of Archies : We are in the business of emotions and emotions never die . We have been churning out a thousand reasons to smile . We have rendered voices to many a feelings and crafted words for many an emotion. Words that have built many a new relationships and voices that have strengthened many a bondings.

ARCHIES
The key to Archies' success is the fact that the company has consistently focussed on emotions

feelings, which is summed up in its marketing


strapline: 'The most special way to say you care'. Archies' product portfolio contains: All-occasion greeting cards, Gift items such as curios, Photo albums, Photo frames, Soft toys, mugs, quotations, Key chains and a wide range of stationery. Emotions are at the heart of the Archies collections.

VINTAGE
Corporate Mission statement(1983-92):

To create and promote greeting cards that are unmatched in the field of quality, design and service.
Mission Statement (1992 onwards): To provide our customers with products keeping high benchmarks in the field of quality service and design

SWOT ANALYSIS Archies Vs Vintage


Strengths
-First mover advantage. -Tie ups with corporates. -cards in various regional languages. -Occasion cards launched (Raksha Bhandan, Holi , Eid , Karvachauth ).

S
O

W T

Weaknesses
- Margins in gifts were low as they were outsourced. - Expensive promotional activities

Opportunities
-Changing Mindset of Indians. Providing an opportunity for more occasion cards and gifts. - Increasing disposable income of India providing and opportunity to expand the markets , and Expand the Product lines in order to become a company that offers complete gifting solutions

Threats -SMS & MMS culture.


- Political environment. (many shiv sena and Bajrang Dal activists vandalized many Archies store on the occasions like that of Valentines Day )

SWOT ANALYSIS Primary factors


S
Strengths
Advantages Experience, knowledge Unique caracteristics Resources Geographical advantage, location Competence, capabilities Quality, reputation

Weaknesses
Disadvantages Gap in experience, knowledge Financial aspects Reliability and trust Loss of key staff Geographical factors

Opportunities
Strategic alliances, partnerships Product development Import, export Innovation an technology development

Threats
Loss af alliances and partners Price infaltion/deflation Strong competition Competitors new products and innovation

SWOT ANALYSIS Strengths

S
Strength Strength
cards in various regional languages

Strength

First mover advantage.

Tie ups with corporates.

Strength
Occasion cards launched (Raksha Bhandan, Holi, Eid , Karvachauth)

SWOT ANALYSIS Weaknesses

W
Weaknesses

Weaknesses

Margins in gifts were low as they were outsource d

Expensive promotion al activities

SWOT ANALYSIS Opportunities

O
Opportunities
Increasing disposable income of India providing and opportunity to expand the markets , and Expand the Product lines in order to become a company that offers complete gifting solutions

Opportunities
Changing Mindset of Indians. Providing an opportunity for more occasion cards and gifts.

SWOT ANALYSIS Threats

T
Threats
Political environment. (many shiv sena and Bajrang Dal activists vandalized many Archies store on the occasions like that of Valentines Day )

Threats

SMS & MMS culture.

SWOT ANALYSIS Summary


SWOT summary -It has the advantage of being the First mover and having tie ups with corporates. The cards are in different regional language and are made for various occasions. -But since they were outsourced the Margins in gifts were and the promotional activities were expensive. -Changing Mindset of Indians also provided an opportunity for more occasion cards and gifts and increasing disposable income of India provided an opportunity to expand the markets and expand the Product lines in order to become a company that offers complete gifting solutions -Threats being the SMS & MMS culture and the Political environment.

5 Force Analysis
Threat of new Entrants (Moderate) Threat of Substitutes (High)

Extent of Competitor Rivalry (Moderate)

Power of Supplier (Moderate)

Power of Buyer (Moderate)

5 Force Analysis
Threat of new entrants:

Low capital required Medium brand image to overcome Distribution cost moderate

5 Force Analysis
Threat of substitutes:

SMS ,MMS Threat of free e cards and chocolates

5 Force Analysis
Purchasing power of buyers:

Many Suppliers Alternate Sources

5 Force Analysis
Purchasing power of Suppliers:

Alternate Suppliers available Cost of switching not much!

5 Force Analysis
Extent of competitive rivalry:

Market is large Can soak in many competitors

BALANCED SCORECARD

Corporate Vision of Anil Mulchandani : To be the world leader in posters and greeting cards. Mission Statement of Archies : We are in the business of emotions and emotions never die . We have been churning out a thousand reasons to smile . We have rendered voices to many a feelings and crafted words for many an emotion. Words that have built many a new relationships and voices that have strengthened many a bondings.

FINANCIAL PERSPECTIVE
The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value.
ARCHIES Sales during the financial year march10- m arch 11:- 188.53(Rs. Crore) Net Profit during the financial year march 10-march 11:-10.83 (Rs. Crore) Total number of share holding :33779400 VINTAGE Sales as on 31st March, 2010:- 93.95 (Rs. Lacs) Net Profit as on 31st March, 2010:(159.44) (Rs.Lacs) Loss Total number of shares holdings:37438.5495

CUSTOMER PERSPECTIVE
The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes.
ARCHIES Archies constantly aims at providing a unique mix of products at very affordable and attractive prices. Every month you see new line of products with a concept, a unique theme, which attracts the customer. VINTAGE Vintage cards are also handmade which adds to its emotions and feelings.

Archies top occasion is Valentines day Makes cards for occasions like , followed by Friendship day. Archies Christmas, New Year, wedding cards. has given us a lot of reasons to smile, a lot of occasions to share with the loved ones. With innovative and unique concepts, Archies is rightly the champion in its field.

Today, Archies reaches out to its customers through a network of 400 franchisees and 130 company owned stores. Archies makes sure that the customer gets the same experience irrespective of the ownership of the store.

Today, Vintage reaches out to its customers through a number of stores that satisfies its customers.

Archies has 130 company stores as of The company has plans to open new now with a growth rate of 50 stores per stores in different parts of the country. year at present.

INTERNAL BUSINESS PERSPECTIVE


The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives.
ARCHIES The main concentration is on the core business of Greeting Cards, gifts and retail and every effort of the Company is aimed at maximizing the profitability of the company. The company has plans to open additional 40 stores in various shopping malls across the country in phased manner over a period of next 3 years. VINTAGE Concentrates on developing local artists to create new designs and on appointing distributors and setting up retail outlets for future growth The concept of "client's interest first" is the embodiment of its organizational culture and it is embraced by every member of the Vintage team.

The Management and Audit Committee regularly review reports of the internal auditors, and corrective action initiated to strengthen the controls and enhance the effectiveness of the existing systems.

The annual reports are analysed and actions are taken to improve their actions and strategies.

INNOVATION AND LEARNING


The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture.

ARCHIES Archies has always explored new opportunities and occasions for people to express their feelings.(Valentines Day, Mothers Day, and Fathers Day, Friendship Day) Archies proactively responded to technology changes in form of e-cards, SMS and MMS, which were taking the market away from traditional greeting card by diversifying into gifts as they were another means of expressing emotions.

VINTAGE Vintage Cards and Creations was the brainchild of Anil Kapur and Vaishnav when a few cards made by them were appreciated by the customers for quality and design. Vintage did not respond to the change and found itself burdened with huge inventory of card with no markets for them.

PEST Analysis :

P E

olitical:

Ban on Valentines Day Cards by the Shiv Sena conomic:

1)Macroeconomic factors like a downturn in the economy, unforeseen political and social upheavals, natural calamities are likely to affect the business of your company as also the industry at large. 2)Change in Government's fiscal policy also has a bearing on the Company's performance. 3)Lack of organized players, as well as organized market is another area of concern. 4)Retailers' needs and expectations are as different as the customers they serve, which also challenge to growth

Socio-Cultural:
1) Demand for posters 2) Increasing consumer awareness and taste f music: a) song books with lyrics.Abba n den other classics n lyrics b) yearbook containing hits f each year..10000 copies sold annually 3) Importance f display their fore Archies galleries came about 4) Card buying became an enjoyable experience for the university students n youngsters 5) Innovative products were constantly introduced 6) There was a time when greeting cards brought to mind Archies.because of its hold on the market 7)2005- perceived as Company offering complete gifting solutions 8) They tied up with Helpage India, a global network of non profit organizations which work for the cause and care of the disadvantaged older persons. 9) Archies was considered by stakeholders, employees, suppliers, business associates, franchisees and customers as a peoples company 10) Using well known media personalities like Zohra Sehgal and Shooter Jaspal Rana to unveil the Helpage India collection of cards! 11) 9th September was initiated as Grandparents Day 12)Growing no of corporate such as Sony Corp, Shell Gas, ICICI, Honda Motors and Reliance Industries were resorting to Helpage India products to wish their employees, associates and clients 13)Valentines day cards contributed to 7% of the revenue

They created occasions so that people found reason to greet each other and keep in touch: Raksha Bandhan, Holi, Eid, Mothers Day, Fathers day, Husbands day, Karva Chauth gained momentum n contributed 25% of total sales. 30% was generated from seasons greetings an 45% from everyday cards Cards in regional languages were launched 1993- Simple licensing agreement with American Greetings ensued and were sold as Paper Rose cards in India. This also gave them access to Gibson Hanson Graphics, Expression Gifts and Carlton Cards printed and distributed CRY Greeting cards and Stationery products. In 2001 they tied up with CRY(Child Relief and You): They printed and distributed CRY greeting cards and stationery products. AGGL entered alliances with Cadbury India and Taneja Mines.archied greetings used their outlets to retail the chocolates and other products of Cadbury India and the Divinity Range of products of Taneja Mines. Their product portfolio started to include perfumes in 2002

In April 2002 they entered into a marketing and branding tie-up with Normak Fashions, manufacturers of womens fashion jewellery to push Normaks Estelle line of jewellery through Archie's 150 outlets under the Archie's brand. The outlets would later be expanded to 400 outlets to retail the Splendour range of affordable and classy jewellery from Normak. In 2004 the company tied up with the worlds best stuffed toys and gift company RUSS of England and also with Florence of Italy for limited editions of their porcelain figurines. They also tied up with Walt Disney In the merchandise and gifts space. Also with Kathleen Francour (an international Photographer) to introduce a new range of innovative designer cards. Also collaborated with Simon Elvin, greeting cards player from new York. In most cases a royalty of 5% was paid! To promote sales Archie's used props and promotional items in feature films starting with Maine Pyaar Kiya. Archies was planning to launch a new chain of retail stores named as Stupid Cupid dealing in fashion accessories and premium gifts to give another choice to the companies prospective customers.

VINTAGE:
To meet future growth requirements the company entered into an agreement with Hallmark Cards in 1992 to use its brands, trademarks and intellectual property. It got exclusive rights to use copyrights in the manufacture and sale of products in India. And non-exclusive rights in Sri Lanka, Bangladesh and Nepal. Entered into an agreement with Walt Disney Consumer Products to use materials like Mickey, Minnie,etc in its greeting cards, posters, autograph books, telephone books, address books and gift wraps. Also entered into a licensing agreement with Verkerke to use Verkerke designs and Brownsword, Gordon Fraser gallery and Forever Friends trademarks. Brand licensing agreement with Mattel Inc USA gave them the rights for the Barbie brands Also tied up with Cancer Patience Aid Association to establish its presencei n the corporate segment. By 2001 the company had introduced cards in Hindi and Marathi
..

Technological:
Initial capital was Rs. 1000 and now they have expanded to 450 + outlets 30% initially came from gifts, posters, stationery items, cassettes and cds and 70% from cards Gifts were outsourced and business grew at 50% against that of cards which grew at 15-20% Archies formed a 100% subsidiary archiesonline.com at a cost of Rs.2 crores, for e-cards and e-commerce and tied up with Yahoo to e-tail its cards and gift items, which was a total replica of an Archies gallery on the net with a USP on third party gifting. Soon when they realized that a huge number of cards were being sent on the net and they were not getting any returns, the site was converted into a paid site. It was Indias first site and worlds first e-greeting site to go paid. A membership fee was introduced at 400 Rs having a perceived value of Rs 700.Under this package the user could send 100 e-cards a year free of charge and get a discount card that allowed discount shopping at Archies and Planet M. Cards were being personalized in association with American Marketing Group .

COMPETITIVE PROFILE MATRIX


OF ARCHIES V/S VINTAGE

CPM :

INTRODUCTION

is an assessment of the strengths and weaknesses of current and potential competitors provides both an offensive and defensive strategic context to identify opportunities and threats

helps management understand their competitive advantages/disadvantages relative to competitors


provides an informed basis to develop strategies to achieve competitive advantage in the future

ARCHIES
Critical Success Factor
Advertising Product Quality Price Competitive ness Managemen t Financial Position Customer

VINTAGE
Rating Weighted Score
0.40 0.45 0.20 0.20 0.45 0.20 0.30 0.10

Weight

Rating

Weighted Score
0.80 0.60 0.20 0.30 0.60 0.30 0.30 0.15

0.20 0.15 0.10 0.10 0.15 0.10 0.15 0.05

4 4 2 3 4 3 2 3

2 3 2 2 3 2 2 2

Total

1.00

3.25

2.30

STRATEGIC MOVES :
A unique programme in the Archies product portfolio is Gift of the Monthmarketing initiative a product is chosen and sold at Rs. 99 (US$ 2.06) well below its normal printed price for an entire month Archies has also produced the MTV Roadies merchandise. This range of products includes boldly designed bags, sippers, caps, mugs, photo frames, wallets and key rings. The latest addition to the Archies greetings cards range is the singing card. This electronic chip embedded collection of greeting cards, when opened, plays an original licensed soundtrack. Its tie up with Help Age and CRY both charitable organisations. "Gifts worth Rs 250 and above will be shipped and delivered free of cost,"

The distribution revamp of ARCHIES


During the financial year 1999-00, Archies decided to revamp its distribution network and replace existing distributors by a C&F agent network. According to the new distribution system, in place of 68 distributors in 21 states, Archies appointed 10 C&F agents in 10 states who catered to distributors who in turn reached out to the retailers.

The retail revamp of ARCHIES


In 2001, Archies began an 'exclusivity drive,' by way of which all existing Archies Gallery franchisees were asked to keep only Archies range of products. If they did not want to be an exclusive outlet, they were given the option of converting into an Archies Paper Rose Shoppe on a 'non-exclusive' basis.

TIE UPS
Strategic tie-up with Paramount Cards in 1988 - introduction of new lines of everyday cards such as Thinking of you, Hello, Miss you and Get well soon, among others. Licensing arrangement with American Greetings since 1993. Has exclusive distribution tie ups with Keel Toys (UK), Paper Island (UK) for Fizzy Moon, Russ Berrie (US).

PROMOTIONS AND ADVERTISEMENTS


PROPS USED IN MOVIES CHANGING FRANCHISE STORES INTO GALLERIES ORGANIZING EVENTS AND HONOURING WINNERS

PROVIDING ONLINE SERVICE

Vintage strategy over time


Concentrated on developing local artists to create new designs and on appointing distributors and setting up retail outlets for future growth Company entered into agreement with one of worlds largest greeting cards company , Hallmark, based in US in 92 Entered into an agreement with Walt Disney Consumer Products to use materials like Mickey, Minnie etc. for use in greeting cards, posters, gift wraps Entered into a licensing agreement with Verkerke to use their designs trademarks Another brand licensing agreement with Mattel Inc. US gave them rights for the Barbie brand. Apart from these, company tied up with Cancer Patients Aid Association to establish its presence in the corporate segment. Vintage tied up with Nestle this year to combine a card-and-gift idea in the form of "choco-cards" for Friendship Day, during the first week of August. For all purposes, these were cards with all the requisite greetings and design, but carried gifts of chocolates inside.

Conclusions and Recommendations


Problems :
The advent of E greetings , sms , mms Outsourcing

Solutions :
Tie- ups with telephone service providers to come up with the likes of Archies images and MMS Look for more economic suppliers (Indian Suppliers) Diversify into theme parks, bakeries etc.

Conclusions and Recommendations


Problems :
Accumulated inventory of cards and posters for over a span of 4 years No cost cutting model Price fall

Solutions :
Make presence felt on the internet Diversify into an area where they have the first move advantage Create an identity and a brand name for themselves