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American Greetings Harvard
Case Solution & Analysis
AN INDUSTRY IN DECLINE
Greeting card industry was faced massive changes as it had attained maturity and was now in decline.
Overall greeting card sales had been contracting in the U.S. for some years and negative growth was expected in the next five years to 2015 (Exhibit 4).
Hallmark was the largest card company in the U.S. that was privately owned by the Hall family with $4 billion of revenues. The organization had expanded its operations in more than hundred nations and thus it was well-diversified geographically. Overall, the U.S. card industry was contracting with 9% reduction in last six years and the trend was expected to continue with a minimum of 4% decline over next 4 years and 16% in a worst case scenario. Major cause and diver of this decline in demand was changing social interaction norms and advent of alternative forms of communications through social networking and digital imaging.
Increase in use of these alternatives by the populace to express their love and keep in touch with their close ones was reducing the need to send paper based greeting cards.
As a result, greeting card companies were increasingly moving to electronic card distribution through internet websites but the declining trend did not change much. Some companies were diversifying their business away from pure greeting card business to other related product categories. In this regard AG was trying to expand its sales through discount retail stores such as...

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