Chapter 2 : Strategic Planing For Competitive Advantage

The goal of strategic planning is long-run profitability and growth. Good strategic plan help protect  and grow the firm's resources and bring competitive advantage.

There are 3 kinds of competitive advantage: cost, product/service differentiation and niche. Sanrio is taking successfully of product/service differentiation competitive advantage.

What made them success? Here are their strategic plans:

Market their products to  certain customer, women and girls. The product line consists of stationary, greeting cards, school supplies, dolls, accessories, candy, utensils, and health and beauty aids. As well as the health, beauty aids such as contact lens, eyeglass case, toothbrushes... The other functional merchandise like coffee maker, microwave... attract older women who have loved Hello Kitty when they were young. Through the research and development, they found what the customer wants.  Older girls may not want candy, they are more likely to want a purse and lip gloss.  Sanrio delivers that.

Hello Kitty Toaster

Participate in co-branding with other major companies. McDonald, Sanyo, Eva Airway, Swarovski... and many others companies and brands. Its's a mutually beneficial relationship  because Sanrio profits and others in turn sells more of their consumer products. This strategy appeals to the slightly older market segment that would probably purchase these items as a gift for themselves who will in turn give the gift of entertaining friends. 

Hello Kitty Airbus

The next strategy is franchising  and subsidiaries. Through their corporate website, a business person can apply to own and operate one of the Sanrio, Sanrio Smiles or Sanrio Gift Gate stores.  Because the branded merchandise is unique, the store manager must order the product in small unit quantities so that there will be high turnover.  Sanrio Company also offers the option of allowing current business owners to carry the Sanrio product line in their stores.  There are even franchised themed restaurants and Hello Kitty cafes in Japan.  The subsidiary of Sanrio Company, Ltd. is Sanrio Inc.  The subsidiaries are located in the Americas and other countries such as Germany for maximum market exposure. 

   

To keep up the competitive advantage, Sanrio continues adding 600 new products every month to their 15,000 or more products. Can't deny how profitable for its kind of company, Sanrio is developing products that creates more smiles in many ways.