[Business Plan] Enesco Group, Inc

1.0 Executive Summary

2.0 Company Description

Enesco Group, Inc. is one of the major players in the global giftware industry. The company is known worldwide as a manufacturer and distributors of giftware as well as garden and home decorative products. Based on Itasca, Illinois, the company operates internationally by distributing its products to various direct mail retails, specialty gift retailers, market chains and home décor boutiques in different parts of the world. With its large market coverage, the company now serves markers in the Pacific, Asia, Australia, Mexico and Europe. The popularity of Enesco’s products is not only brought about by its efficient services and quality products, but also through its recognizable brands. These include Cherished Teddies, Disney, Lilliput Lane, Nickelodeon, Heartwood Creek, and Border Fine Arts. The product lines of the company include wall decorations, accent furniture, ornaments, music boxes, figurines, garden accessories, water balls, candles, desk accessories, porcelain bisque figurines and general home accessories.

The company was established in 1958, initially as an import sector of one of the oldest and largest general merchandise catalog enterprises, N. Shure. When N. Shure was sold to the Butler Brothers, the company was reorganized and named Enesco Corporation. In 1983, the import division was again sold to Stanhome, Inc., a company in Massachusetts. The name of the group was renamed to Enesco Group in 1998. Its present headquarters is stationed at Illinois; the manufacturer’s showroom, distribution facility and warehouse are located near Elk Grove Village.

• Capabilities

Being one of the major manufacturers and distributors in the giftware industry, Enesco Group has a number of essential capabilities. One of which is its ability to produce unique and marketable products. Through its product development initiatives, the company is capable of making its original products stand out from the rest and meet the needs of its customers. Another important capability is its global reach and connections. By establishing a number of offices abroad, Enesco is able to learn more about its foreign markets and distribute its products more easily. Finally, the company is also capable of supporting multiple marketing means. In particular, it employs various means of promotion and communication strategies in order to market its product and establish stronger relations with its customers.

• Core Competency

Core competencies of the company also represent its competitive advantages; these include features of the company that enable it to overcome business competition and other relevant challenges. In Enesco’s case, one of these core competencies is its workforce or people. Talent and skills are among the most important factors a giftware business must look for in its employees. Through these, the company will be able to design products that meet the customers’ standards. This is considered a core competency as it is challenging to employ talented and highly-skilled staff members. Another important core competency of Enesco is its distribution channels. By means of utilizing foreign retailers and giftware distributors, the company is able to enter foreign markets and establish greater global coverage. This is a core competency as the company was able to overcome the risks of international business operations; in turn, this competency factor adds to the profitability of the company. Lastly, the product brands the company carries are also essential core competencies. Through the popularity of the brands names of Enesco products, the company is able to use brand identity to attract more customers as well as build regular buyers.

3.0 Strategic Focus and Plan

• Vision

It is the vision of the company to use its resources and skills to produce products and provide services that will bring about customer delight. The operations of the company is supported by its dream of producing gift, home and garden items that will suit the interest and standards of the consumers.

• Mission

It is the mission of the company to become the lead manufacturer and distributor of giftware as well as home and garden décor. The company aims to fulfill this mission through the provision of unmatched brand support, distinct and quality products, enhanced customer profitability and high standard customer service.

4.0 SWOT Analysis

Based on the framework developed by Kotler (1984), a marketing plan must contain five basic elements. These include situation analysis, marketing objectives and goals, marketing strategy, marketing action plan and marketing controls. In the situation analysis, the aim is to analyze the environment of the business internally and externally. Specifically, the SWOT analysis is the tool used for identifying a company’s strengths, weaknesses, opportunities and threats. It is an analytical process that requires the search for a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses (Hunger & Wheelen, 1996).

To put it simply, situational analysis is the process of reviewing the present situation of the company, which includes the review of relevant matters such as the history of the firm, analysis of its market environment, competitors and consumers. There are actually two types of situational analysis, both are equally significant. One is the external analysis and the other focuses on the internal environment. When conducting an external situational analysis, the business’ customers, market and competitors are analyzed. Relevant information regarding the company’s market segments, their competitor’s relative weaknesses and strengths as well as the industry as a whole. An analysis of the external environment requires more than just a summary of what the competition is doing. The external environment is comprised of two elements -- the societal environment and the industry. The societal environment includes a review of major trends in society affecting organizations across all industries. These trends include political, economic, social and legal. While not necessarily having a direct, immediate impact on the business, these trends are important to the long-run health and direction of the business. An analysis of the industry takes a look at factors that have a more direct bearing on the business. Hence, in addition to analyzing the competition other groups must be similarly evaluated to ascertain that no opportunities or threats within the environment are overlooked (Buhler, 1994).

On the other hand, internal situational analysis focuses on the identification of the company’s distinctive competencies, expected growth, their assets as well as their liabilities. The internal analysis also illustrates the core values of a company, and in what ways can these values be enhanced or beneficial to the market plan (Cooper, 2002). The evaluation of the internal environment of the company involves the analysis of the company’s structure, culture and resources. When a strategy is selected for implementation, it must be appropriate given the way the organization is structured or the way an organization must be restructured. The strategy must be consistent with the organization's culture. Finally the organizational resources must be available to actually implement the strategy that was formulated. Without the proper people, skills, abilities, finances and physical resources, the strategy cannot be implemented (Buhler, 1994). Below is the SWOT Analysis for Enesco:

• Strengths

Ø One of the important strengths of Enesco is the diversity of its clientele. The first international operation of the company was in 1985 where Enesco International (HK) Ltd. was established. This served as the link for the market sourcing of the company. In 1988, the company developed Enesco Limited which paved the way for its major global giftware operations. Through these developments, the company has now able to distribute its products to over 30 countries worldwide. These include the UK, Canada and Asia. Having diverse customers made Enesco a globally-known brand. Moreover, this supports the company’s profitability.

Ø Enesco’s strength is also rooted to its efficient distribution approach. By means of utilizing the services of independent giftware retailers worldwide, the company is able to distribute its products to foreign markets. Mass merchants, catalogers, department stores like K-Mart, Sears and Wal-Mart as well as other types of distributors are used by the company, allowing it to acquire greater sales and market coverage.

Ø The product lines of Enesco have both variety and strong brand identity. The company produces a number of product brands for the consumers; hence, product variety is made available. This helps in obtaining more consumers and meeting their diverse product interests. Aside from these, the product line of the company carry well-known and established brands such as Nickelodeon, Disney and Bratz. This strength has been a useful marketing instrument for Enesco, resulting to considerable sales generation and customer patronage.

Ø The company has the resources to maintain a large workforce; moreover, it also has the capability to subdivide its people into useful departments where highly talented and skilled experts can be assigned. With this workforce, the company can ensure the speed and quality of its production.

Ø The company has been operating for years; years of successful business operation strengthens its capability to overcome past and even new business challenges with tried and tested strategies. This capability also allows the company to introduce its new products and implement strategies at the right time and place.

• Weaknesses

Ø Although the company has a diverse product line, the target consumers of these items are limited. Specifically, the company major target is women, aged 25 and younger. Despite its global reach, the company is unable to make the most of this accessibility with a limited market segment.

Ø The company has recently gone through major strategic failure. An example of which was in 2004, wherein the company failed to implement an effective supply chain management system in their operations. This in turn had affected their profitability as losses had been incurred (Enseco Annual Report, 2004).

• Opportunities

Ø The customers of the gift industry have been showing signs of increased interest for gift and decorative items. In the UK gift sector for example, the industry is said to be worth more that $21 billion. This interest and increased demand have been connected to the rise of DIY, home, craft and garden programs seen on television.

Ø The ability of the company to acquire pertinent consumer data allows it to develop products that are based on current consumer needs and preferences. This enables Enesco to develop new products as well as establish customer satisfaction and loyalty. With its product development plans and skilled design staff, the company can make the most of the opportunity to produce salable and original products.

• Threats

Ø The giftware business sector is a competitive industry. Compare to other businesses, the level of competition in the giftware industry is divided among several product categories and companies. Due to the number of smaller companies and multiple product types, the competition in the industry is not as strict. Nonetheless, this factor affects the profitability and market coverage of the company. Moreover, competitors in this industry naturally compete with one another through strategic means, which involve factors such as product design originality, customer service quality, price, sourcing and marketing abilities. Enesco should then develop merchandising strategies that could overcome this essential threat. In the United States, these main competitors include Russ Berrie, Hallmark, Cast Art, Department 56, Boyd’s Bears and Lladro.

5.0 Industry Focus

• Buying Behavior

The giftware industry, which includes ceramics, glassware, leather goods, jewelry, silverware, watches and toys, is a business sector that is greatly influenced by a number of factors. These factors in effect influence how the consumers behave towards giftware items. This in turn affects the industry’s profitability and growth. One of the major factors influencing the consumers’ buying behavior within the giftware industry is the price. From gathered statistical findings, the inability of the industry to achieve continuous progress and growth is due to the number of retailers who tend to place heavy discounts on their items as well as offer various promotional deals. The price factor in this case is attributable to the competition of small and large giftware retailers.

Economic factors also affect the industry’s consumers. In particular, increased disposable household income resulted to good sales and high profitability in the industry. Another influential factor is the season or occasion. In general, Christmas is still considered the gift-buying occasion of the industry. Other important events such as Valentine’s Day, Mother’s Day, birthdays and graduations are also recognized as sales-generating occasions. Enseco itself offer specially made products and offers during these times of the year. It is also said that the nature of the markets’ population play an important role in determining the consumers’ buying behavior. In the case of UK for example, which is one of Enesco’s foreign market, the country is experiencing an aging population; moreover, the minority groups within the region has also been showing signs of growth. The age and the diversity of the UK population are then considered factors that would cause an expected increased demand for giftware.

• Creativity, intellectual properties and trademarked products

As mentioned in the SWOT analysis, the originality of the product design of the giftware manufacturers is one of their most essential competitive advantages. For this reason, the people working on their product designs must be highly-skilled and competent to overcome the competitors. In addition to people, companies of this industry also implement various programs in order to ensure the uniqueness and quality of their products. The creativity of the companies in the giftware industry is also essential as this determines their capability to responding to changing consumer needs. In the case of Enesco, the giftware company also values the industry’s creativity aspect; hence, it employs a continuous product development program so as to be a competitive company. In this program, Enesco sets certain profitability standards which are used to assess newly developed product lines; passing these set criteria will determine if these new items will be mass produced and marketed.

As the industry value the creativity factor, companies exert efforts to protect their intellectual properties and trademarked products. Enesco also applied for this intellectual property protection, particularly on its Cherished Teddies and Precious Moments products lines. These products have a license term through December 31, 2010 and December 31, 2007 respectively. The protection of these product lines is important to Enesco as both lines have been considered major sales resource for the company. The company either pays minimum guarantees or advance royalties in order to avail these license agreements. In general, companies enter into copyright and trademark agreements in order for them to create and market new products that are match their existing product lines.

• Main Elements of Supplier Management and Better Results
• Quality Assurance Control
• Supply Chain Management

The management of supply chains is one of the significant strategic aspects of business organizations. Managing the production of the company’s good and services, monitoring storage inventories, contacting suppliers and ensuring timely distribution of goods are some of the major activities covered by supply chain management (SCM). As a dynamic process, the SCM requires the continuous exchange of information, funds and materials between and within the members of the chain (Chopra & Meindl, 2001). The collaborated concept of the supply chain management makes this business activity challenging.

SCM is an important aspect of the operations within the giftware industry. In order to ensure the availability of the product supplies, companies operating in this industry must employ means to ensure efficient supply chain management practices. The industry does this by utilizing relevant technologies.

6.0 Market Competition

• Creativity
• Quality

Quality, which is primarily a customer-driven aspect of business, is focused on the emphasis of commitment and involvement of each employee within a working organization so as to produce products and services of high standards. Several contributory factors have brought about the introduction and implementation of total quality management among industries, including the giftware sector. At present, customers are more diverse in terms of their needs. Clientele demands have been increasingly sophisticated as well as complicated. Moreover, local and global competitions have significantly increased implying that quality-driven organizations were the only ones to survive. Thus, so as to make in the business world, companies are encouraged to integrate quality towards the satisfaction of the needs, aspirations and expectations of the customers. The quality performance of a business not only benefits the company itself but also its customers. As the companies improve the quality of their services, their images to the customers are enhanced considerably. In addition, the changes help the organizations attend to the different demands and needs of their clients, thereby resulting to customer delight (Lakhe & Mohanty, 1995).

Quality operations indeed help companies overcome various business hurdles through several advantages including enhanced competitiveness, improved productivity, increased market share and superior customer satisfaction. These beneficial outcomes further encourage other businesses to apply the same strategic approach into their operations. However, the implementation of quality systems in a company would require a great deal of planning and company analysis. Time and resource management techniques are then necessary to carry out the different tasks required. In order to manage time effectively, it is important the organization develops a plan that outlines all project activities.

• Delivery
• Service

One of the factors that make each giftware business distinct from other similar companies is the type and quality of services they provide to there customers. In a strictly competitive environment such as the business industry the provision of quality service is an essential determinant of company success and efficiency. For this reason, companies operating within the industry employ various customer-oriented strategies in order to enhance the services they deliver. Enesco conducts a number of service-related programs and procedures so as to remain competitive in the market. One way is the accessibility of the company to the consumers through various communication means. In particular, the company maintains a company website where customers can easily obtain product information; the company also operates toll-free telephone lines to remain connected with their clients. The company also ensures its connection with the customers through different marketing activities such as putting up showroom displays, conducting promotional programs, participating in trade shows as well as distributing annual catalogs. Fro better customer services, Enesco also established the Enesco club for interested customers who would want to subscribe to its newsletters and product offers.