archies case gaurav

8/6/2019 Archies Case Gaurav

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Relationship b/wStrategical

performance and Financial analysis:Such analysis has two components:

It provides important evidence of total organizational

effectivness.

The efficiency and effectivness of the finance function

can be assessed in terms of the management of

financial resources.


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Profitability1.Return on capital employed (ROCE):

2. RETURN ON INVESTMENT OR RETURN ON ASSETS

MAR05 MAR06 MAR07 MAR08 MAR09Return On

Capital

Employed(%

)

17.22 17.19 15.99 13.74 10.19

Archies

Return On

Capital

Employed(%)

-6.09 -36.97 -- -44.3 -80.06

Vintage

MAR05 MAR06 MAR07 MAR08 MAR09

Return onAssets 6.96 6.63 6.79 6.14 -- Archies

Return on

Assets-5.77 -19.66 -48.61 -29.38 -34.6

Vintage


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TRADING POSITION

OPERATING PROFIT MARGIN

MAR 05 MAR 06 MAR 07 MAR 08 MAR 09

Operating

Profit

Margin(%)

15.77 15.29 13.95 13.64 8.61

Archies

Operating

Profit

Margin(%)

-27.35 -86.13 -- -59.02 -123.68

Vintage


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LIQUIDITY POSITION

CURRENT RATIO

QUICK RATIO


Current

Ratio1.81 2.05 1.77 1.78 2.47

Archies

Current

Ratio0.91 1.05 2.67 1.95 1.35

Vintage


Quick

Ratio1.15 0.92 1.03 1.05 1.12

Archies

Quick

Ratio1.48 1.58 1.25 0.84 0.54

Vintage


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Shareholders ratiosEarning per share

Mar 05 Mar 06 Mar 07 Mar 08 Mar 09

Earnings

PerShare 9.28 10.32 12.03 12.14 -1.61

Archies

Earnings

PerShare-2.34 -6.03 -10.67 -6.64 -9.79

Vintage


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Conclusions and Recommendations

Vintage

Survival of the company is at stake.

High inventory level

Reconsider its unique selling ability and proposition ofselling greeting card

Archies

Company going through a rough patch.

Facing a financial crunch.

Reconsider moving into new business avenues (ThemeandAmusement park, Cakes and confectionaries, Playschools and crech for Children)


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SWOTAnalysis

STRENGTHS:

First mover advantage & Few competitors

Tie ups with corporates.

Cards in various regional languages.(Diversified)

Occasion cards launched(Wedding , Festivals , Birthadys)

Emotional & Self Expressive benefit

(People ofIndia associate well with brand image of

ARCHIES)


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WEAKNESS:

Better supplements available .(E-CARDS)

Excess inventory

Continuous need for variety

Margins in gifts were low as they were outsourced.

Expensive promotional activities


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OPPORTUNITY:

New product category

Variety in merchandise industry

Changing Mindset ofIndians. (Providing an opportunity for more

occasion cards and gifts.)

Increasing disposable income ofIndia, providing and opportunity

to expand the markets , and Expand the Product lines in order to become a

company that offers complete gifting solutions.


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THREATS:

Growth in Digital media(SMS & MMS culture).

Increase in Social networking websites

Rapid change in demand.

Increase in non branded items.

Low margins in merchandise industry

Political environment. (many shiv sena and Bajrang Dal activists

vandalized manyArchies store on the occasions like that of Valentines Day )

archies case gaurav

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