Case Study - American Greetings Essay

8875 Words Oct 2nd, 2013 36 Pages
yale case 08-010

American Greetings
An Automation versus Outsourcing Dilemma
Andrea R. Nagy1 Gene Lee 2 Arthur Swersey3

As part of an industry with generous profit margins and high barriers to entry, American th Greetings had spent decades in a comfortable position. Beginning at the turn of the 20 century, it had helped to create a mass market for the greeting card and had presided over its growth into a multi-billion-dollar industry. Because the manufacturing of cards—especially those with special designs or attachments—could be complex, and because customers were used to choosing from a large selection of cards, it was difficult for new players to offer the big, established card companies any serious competition. By the end of
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In 1952 American Greetings made its initial public offering of stock, and in 1989 it was officially added to the S&P 500 list of companies. Over the years American Greetings bought out a number of smaller companies. In 1956 it expanded its business beyond the United States by acquiring Carlton Cards, a Canadian company. In subsequent years it bought card businesses in Mexico, England, Australia, and South Africa. It also purchased companies specializing in wrapping paper, party goods, and accessories. In a major purchase in 2000, American Greetings bought out Gibson Greetings, America’s third-largest card company. Throughout this era of expansion, the company was led by Sapirstein’s son, Irving Stone. As the company grew, it adapted its products to changing societal moods. During the 1950s it began designing “studio cards,” tall, narrow cards that featured cartoon-style artwork and irreverent humor. During the 1960s and beyond, it expanded its content to include cards featuring ethnic diversity, environmentalism, and new-age spirituality. It created cards for new holidays, from Groundhog Day to National Teacher Appreciation Week to Maidyozarem Gahanbar, the Zoroastrian spring festival. During the 1990s the company branched out into customized electronic cards, building the industry’s largest online card website. And following the September 11 terrorist attacks, it created

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