Archies: The Way Indians Greet|Business Strategy|Case Study|Case Studies

Archies: The Way Indians Greet

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Case Details:

Case Code : BSTR036
Case Length : 14 Pages
Period : 1979 - 2002
Organization : Archies Greetings & Gifts Ltd
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Gifts and Greetings

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Story Behind the Success

According to analysts, Archies' franchisee model contributed a great deal to its success. Bharat Shah, Chief Investment Officer, Birla Capital the mutual fund company, said, "The key to understanding Archies is to realize that it is not in the business of cards or gifts, but in franchisee management."

Anil agreed, "We made our own model suitable for Indian conditions. We created a branded franchise. Now the scenario has changed in India and everybody talks about franchising. But we were the first to do that kind of stuff. We then went in for tie-ups so as to get a greater range to support these stores because these were exclusive stores." Commenting on the decision to opt for the franchising route from the very beginning, Anil said, "You don't have malls in India so we have to manage in limited area." By franchising, Archies was not only able to save on real estate costs, but share the advertising and promotion expenditures with franchisees. Archies franchisees made their own investment in the business and paid royalty to Archies for the turnover generated from the sale of Archies products...

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Tackling the E-Greetings Threat had three major sections - meet, greet and gift. Under 'meet,' Archies offered services such as free e-mail, chat, reminder services, and a greetings scheduler. The 'greet' section was a consumer interaction area where registered customers could send and receive a variety of animated e-cards/greetings online for free.

Over 700 programmed e-cards available, which were quite different from the usual cards available on the Internet - these cards had an average eight second long storyline with animation and sound effects incorporated into them. In the 'gift' section, consumers could purchase gifts and get them delivered at their doorstep.

While residents of Delhi got free delivery of their purchases, customers in other parts of the country had to pay Rs 25 as delivery charges. The minimum value of each purchase was Rs 250. Archies tied up with courier companies - Elbee and Blue Dart to deliver the gifts and cards purchased by customers. The company tied up with Easy Net Com for the payment gateway...

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