Licensing proved to be a gigantic success, and total sales went from ~$6 million in 1992 to $100 million in 2005. Business Problem/Opportunity Licensing representation by Earthworks and its first success with Sony Plaza in Japan spread the characters of Suzy’s Zoo and create a broad base of awareness. Additionally, the production of children’s books and animations can fill out the product line to boost recognition and following. However, a rapidly developing environment and the introduction of high-tech greeting cards have not affected Suzy’s focus.
The company is not highly involved in the making of new age digital cards. At the same time, the companies main creative force, Suzy Spafford, is nearing retirement. Key Resources Resources that support Suzy’s Zoo’s competitive advantage are believed to be:· Unique characters (Intellectual/Human) The characters created by Suzy are the companies most important resource. There will be demand as long as the characters remain as popular and appealing as they are. · Licensing agreement with Earthworks Brand Management (Organizational) This agreement provides a significant advantage to the company, essentially utsourcing responsibilities of managing licensing agreements and adding a powerful network of opportunities. The licensing contract with Sony Plaza is an excellent example of how this agreement benefits the company and spreads its unique characters. Options 1. Start developing modern greeting cards along with books and animations. To develop the greeting card business by offering these cards. A broader set of consumers are attracted to these cards. Books and animations will have a circular effect on demand – boosting licensing sales 2. Focus on producing books and animations while keeping the existing product line growing slowly.
Create a book and video division, unless the problem of succession is not resolved. Instead of producing modern greeting cards, the company should focus more on the production of books and animations. The benefits of increased recognition in these fields are massive and would give the company further potential for growth. Recommendations While it is important to develop the greeting card market, it is recommended to follow option 2, for the following reasons: · Awareness and recognition for Suzy’s characters are high both nationally and internationally, especially with the appearance in the Japanese market.
Every extra effort spent to produce books or animations will pay off. · Producing modern greeting cards would mean increased direct competition with Hallmark and American Greeting. While Suzy’s Zoo has a significant focus on greeting cards, it is not necessary to follow the trends that the two industry giants are setting. · Creating a book and video division will allow full creative control over the projects. The company should focus on continually ensuring creative content can be produced before contracting agencies.