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Case Introduction
1) Analyze the circumstances in which Anil Moolchandani stared Archies and highlight the reasons for the companys runaway success. Why do you think Archies could not sustain its profitability growth in 2000-2001?
His family business was selling saris but in 1970 he decided to buy & sell good quality posters
Later when demand increased he started getting posters of film stars, natural sceneries etc printed by local printers.
In 1979, Anil & his brother Jagdish Moolchandani got Archies Gifts & Greetings registered as a patnership firm. On his visit to South East Asia, realized there were exclusive greeting cards shop with good ambience and soft backdrop music. He decided to try out the concept in India and launched Gift Gallery in 1984 in Delhi. Initially launched cards for Valentines Day, Mothers day, Fathers day, Friendship day - to catch the fancy of teenage shoppers.
In 1987, first exclusive Archies Gallery was set up in Kamal Nagar, Delhi University. It became an instant hit with sales touching Rs. 2.2 million in first year itself
In 1995, Archies was incorporated as a public limited company, with IPO of Rs. 74 million
Gift items
contributed 15% of total revenue. Includes items photo albums, frames, clock, stuffed toys, mementoes, sunglasses etc
Stationery products
contributed to 16% of cos revenue. Includes items such as autograph books, diaries, calenders, posters, gift wraps, designer & fancy sationery.
In april 2000, Archies took over the popular 25-store Feelings chain of greeting cards
They were premium Archies Galleries, exclusive Archies showrooms with lot more shelf space than other outlets.
2)Critically comment on the Archies franchising and distribution strategies for expansion. DO you think the companys strategy in the initial years was right in the light of the rationalization exercises? Give reasons to support your stand.
3)Do you think the measures taken by Archies to meet the threat of e-greetings were adequate? Was the companys decision to make its website a aid one, a sound business move? Justify your answer.
4) Discuss if Archies will be able to maintain its market share and leadership in the future with the entry of players such as ITC? Will the companys current strategies help sustain its competitive position?