Howru: A Private Card Business And Its Subsidiary Have A 14S ✓ Solved

Howru A Private Card Business And Its Subsidiary Have A 14 Share Of

Howru, a private card business and its subsidiary, have a 14% share of the greeting card market. The card business is subject to seasonal cycles, with sales being highest during the holiday season. For this assignment, please complete the following: · What steps can this company take to diversify its portfolio? · Define diversification and its necessity in risk management. · Discuss at least 5 steps to diversify the card business. · Please give at least 6 suggestions of how and where funds can be allocated for new investments.

Sample Paper For Above instruction

Introduction

The greeting card industry, characterized by seasonal fluctuations and intense competition, necessitates strategic diversification to ensure sustainable growth and risk mitigation. Howru, holding a significant 14% market share through its private card business and subsidiary, faces inherent vulnerabilities tied to its reliance on seasonal sales peaks. This paper explores the concept of diversification, evaluates its importance in risk management, proposes strategic diversification steps specific to Howru’s context, and suggests avenues for new investments to bolster its market position.

Understanding Diversification and Its Importance in Risk Management

Diversification is a strategic approach that involves expanding a company's product lines, markets, or investments to spread risk and reduce dependence on a limited number of revenue streams (Markowitz, 1952). In risk management, diversification is vital because it buffers a business against market volatility, seasonal downturns, or unforeseen disruptions. For Howru, diversification can safeguard against declining sales during off-peak seasons and changing consumer preferences, ultimately providing stability and fostering growth.

Steps to Diversify the Greeting Card Business

1. Expand Product Offerings: Broadening the range of cards to include electronic greeting cards, personalized options, and specialty cards for niche markets such as eco-friendly or multicultural segments can attract diverse customer demographics (Grewal & Levy, 2018).

2. Enter Adjacent Markets: The company can venture into related stationery segments such as invitations, gift wraps, or personalized stationery, leveraging existing brand recognition (Kotler & Keller, 2016).

3. Develop Digital Platforms: Creating a robust online presence with customizable templates and direct-to-consumer sales channels can tap into the growing digital market and reduce reliance on seasonal retail sales (Brynjolfsson et al., 2013).

4. Partnerships and Collaborations: Form strategic alliances with florists, gift shops, and event organizers to cross-promote products and access new customer bases (Hagedoorn, 2002).

5. Geographic Expansion: Exploring international markets with growing demand for greeting cards can diversify revenue streams and mitigate domestic market saturation (Cavusgil et al., 2014).

Suggestions for Investment Allocation

1. Technology Development: Invest in developing AI-enabled customization tools to enhance customer experience.

2. E-Commerce Platform Enhancement: Allocate funds towards upgrading the online shopping infrastructure for improved user interface and logistics.

3. Research and Development: Invest in market research to identify emerging trends and consumer preferences in greetings and related products.

4. Marketing Campaigns: Fund targeted marketing initiatives to expand brand awareness in new markets.

5. Sustainable Materials: Invest in eco-friendly and sustainable materials to cater to environmentally conscious consumers.

6. Staff Training and Capacity Building: Allocate resources for training staff in digital sales channels and customer service excellence (Porter, 1985).

Conclusion

Diversification serves as a critical strategy for Howru to stabilize its revenue and secure its market position amidst seasonal fluctuations and evolving consumer preferences. By expanding product offerings, entering new markets, and embracing digital transformation, Howru can reduce risks associated with market volatility. Furthermore, thoughtfully allocated investments in technology, sustainability, and marketing can open new avenues for growth, ensuring long-term viability and competitiveness.

References

  • Brynjolfsson, E., Hu, Y. J., & Rahman, M. S. (2013). Competing in the Age of Omnichannel Retailing. MIT Sloan Management Review, 54(4), 23-29.
  • Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., & Rose, E. L. (2014). International Business. Pearson Australia.
  • Grewal, D., & Levy, M. (2018). Marketing (6th ed.). McGraw-Hill Education.
  • Hagedoorn, J. (2002). Inter-firm R&D partnerships: An overview of major trends and patterns since 1960. Research Policy, 31(4), 477-492.
  • Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson.
  • Markowitz, H. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77–91.
  • Porter, M. E. (1985). Competitive Advantage. Free Press.
  • Additional references would include recent industry reports, secondary research articles, and market analysis data relevant to greeting card and related segments.

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