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Archies VS Vintage

Case Study
Submitted to Prof.
Fakih

Group 8

Ajinkya Jog- 04
Gokulnath Ravishankar- 1
Krishna Saurabh- 25
Venugopal Nair- 55

Scope Of Presentation
1. Introduction
2. Archies - A Brief
3. Situation Analysis for Archies
4. SWOT Analysis for Archies
5. Vintage- A Brief
6. Situation Analysis for Vintage
7. Possible Reasons
8. SWOT Analysis for Vintage
9. Graphical representation
10. Recommendation
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Introduction
Case talks about two companies Archies

and Vintage who are mainly in the card


segments; they started in 1980 and 1983
respectively.
There has been steep decline of sales of
both the companies and especially in the
cards segment and infact doing well in the
gifts segment. This change of high and low
is an concern for its Entrepreneurs

Archies A brief
Archies is one of the biggest retailers in India for

cards, gifts, music CDs, stationery items etc. It is


also Indias largest manufacturer of the same.
The founder and Chairman of the company Mr.
Anil Moolchandani felt the need of a segment that
is in cards and started first of its kind showroom in
Delhi University Campus in the year 1987 which
was a huge success
The company started with cards and eventually
grew up with other products such as gifts etc in
the segment
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Situation analysis of Archies


(1/2)
Archies

mission is being in the Business of


emotions and their vision is to see An Archies card
in every hand
They have diversified and made strategical tie-up's
with other organization and expansion of flagship,
premium stores and adopting the Franchise model.
Some of the distributors were converted into C&F
agents because margins were higher, and also since
the consumers and retailers directly chose the
products, Archies had a better grip on demand
forecasting
They have expanded in new horizon of business such
as gifts, perfume, women fashion jewellery, toys and
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designer cards, etc.,
They have also supported

Situation analysis of
Archies (2/2)
Regional language Cards were launched along

with Occasion Cards


Archies made their cards available online by
strategically making a tie up with Yahoo! E-tail
However when they found that there is a drop
in sales in cards category because of customer
sending online greetings which is free of cost,
they made a strategical move by making
Archies online greeting subsidiary business
into a subscription model by providing various
discounts at online space and also discount
card that allowed discount shopping at Archies
and Planet M
The quick response and strategical move by

Archies - Segment Wise Break-up of Sales (%)

90
80
70
60
50
40
30
20
10
0
2000

2001

2002

Greetings

2003

Gifts

2004

2005

2006

Stationery

As the graph show there is a slump in greeting


market after 2000 and Archies made a right
decision to strategically diversify its product line
which prevented them from further fall in the

SWOT Analysis of
Archies

Strengths
Few Competitors in
organized sector
Good Brand Image
Developed
Stronger Corporate
Image Due to its
Initiatives with
different NGOs

Weaknesses
Cheaper
alternatives
available
Lower margins in
case of gifts due to
outsourcing

Opportunities
New Product
category
( Mobile
Phones/Cakes/Dres
ses)
Marketing via
Social media (eg.
Orkut)

Threats
Fluctuating
demand
Unorganised
sector
Very low
margins(in some
cases) will make it
difficult in the long
run

Vintage- A Brief
A Partnership firm started in 1983 by Anil

Kapur
and
Rajesh
Vaishnav
for
manufacturing and supplying Greeting Cards
Vintage had a huge collection of 3000
design, 26 distributors across India and
massive 3000 outlets by the year 1992 and
grew at a rapid scale of having 221 franchise
outlets in 94 cites by end of 1999
To increase its sales it tied up with Hallmark
Greetings the largest greeting manufacturer
to meet its demand of cards
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Situation Analysis (1/2)


Vintage tied up with Hallmark Cards to

distribute cards in India


Focused only on Local nearby customers
Agreement with Walt Disney to use their
products Like Mickey, Minnie, Donald Duck for
use in Greetings
Tied up with Barbie Brand
Affiliated with Cancer Patients Association

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Situation Analysis (2/2)


Problems:1. Company had Consolidated losses to the
tune of Rs. 9.5 crores
2. The greeting card industry was dying and
being replaced by SMS, MMS and egreetings
3. They had Inventory to the tune of 1.5
years of sale which was finally sold to M/S
Sahil Distributors at 12.5% of MRP

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Possible Reasons
From 96 to 99, the no. of

franchise stores increased from


67 to 221, almost quadruple
Cost of Goods sold was also
high in this phase due to
unwanted expansion
The company expanded its
production but there was no
demand for the same and they
gathered huge inventories
This situation raises as a result
of no proper forecasting of
market demand as the market
is
moving
towards
other
modes of greeting people such
as e-greetings, MMS and SMS
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Recommendations (2/2)
Vintage should not focus on only greeting

cards and diversify into other industries


(Gifts, Toys etc) too
They should not tie up only with Hallmark,
because if Hallmark fails, it will directly
have a negative impact on them
They should evolve with changing times
and introduce e-greetings and other
services over the internet

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SWOT Analysis of
Vintage

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Strength
Tie Up with
Hallmark
Huge sales
Driven by after
tie up with Walt
Disney

Weakness
Over
Dependency on
Hallmark
Excess
Inventory
Huge Operating
Loss

Opportunities
Adopt new
technology to
drive sales
Target
customers
across the world
by online sales

Threats
Huge threat
from Archies
Change in
trends made it
difficult for the
company to
drive sales.

Graphical
Representation
Archies

90

Vintage

30

80

25

70

20

60

15

50
40

10

30

20

0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
-5

10
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Sales

PAT

Till 2000 the PAT margin


was good for Archies
It reduced drastically after
2000 because of royalty
payment and different
new alternative
technological advances
in greeting people such

-10
Sales

PAT

Vintage had good PAT


margin till 1999, but it
reduced much more
comparative to Archies, but
unwarranted expansion
without any demand to
supplement it brought its
PAT to negative values.

PAT Comparison

Sales comparison
15

90
80

10

70
60

50
40

0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

30

-5

20
10
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Archies

-10
Archies

Vintage

Vintage

By the year 2000, since


Archies had diversified
and also introduced CnF
Agents and e-greeting
services, their sales are
not much affected
whereas Vintage didnt
diversify and stayed in
markets of slow growth,

We observe that the


markets slumped after
2000, but Archies
managed to stay afloat
due to its diversification
and expansion of various
medium of selling.
Vintage followed a similar
slump but had losses

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