1.

0
Reference Framework

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1.1 About Flair

v A family-owned Indian Pen Manufacturer created in 1967 con5nuously grown into a

corporate group specializing in pen manufacture with $93 million turnover in 2015 and
an ac5vity in 75 countries, thanks to strategic brand acquirements.

v Sales expected to reach $100 million in 2016 with major local expansions, notably in
France with the acquirement of Hauser and a partnership with PCL SA, a local
representa5ve.

v Pioneer in Wri5ng Instruments: First to introduce Gel Pens, Roller Pens, and Hi-Lighters
to Domes5c Markets.

v Operates OEM Business with produc5on facili5es located in India and Africa.

v Varied porbolio with quality product, including 1000 to 10000 meters wri5ng length
pens, at an entry price.

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1.2 Mission
Scope of Mission
v Flair wishes to penetrate the French Market in order to expand and grow.

v The Export Management Team expects advice with regards to which strategy to follow.

v The plan should convince the Financial Manager to invest and follow the strategy.

Consultancy Mission
v Design convincing, fact-based strategic scenarios and implementa5on plans for Flairs
Export Management Team to decide which market penetra5on strategy to follow in
France.

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 2.0
Flair: 50 Years of WriNng History

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2.1 WriEen Values
Vision Core Competencies
People: Be a great workplace where people Commitment to Quality
are inspired to be the best they can. Innova5on: Dedicated R&D Team
PorWolio: Bring to the world a porbolio of
quality products that an5cipate and sa5sfy Core Advantages
peoples daily needs. Product Quality
Partners: Nurture a winning network of Product Capacity
customers and suppliers, together we Product Diversity
create mutual, enduring value.
ProducNvity: Be a highly eec5ve, lean and
fast moving organiza5on.
A double certified, multi award-winning
Mission government-recognized Star Export
Refresh the market with new age House, catering the complete range of
designs. writing instruments to more than 75
Create value and make a dierence. countries.

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2.2 Products
With the con5nuous acquisi5on of brands,
Flair has managed to interrelate various
technologies, making it a naNonal power
house with internaNonal capabiliNes that
is always ahead of the market .

On top of being the rst to introduce Gel Pens, Roller

Pens, and Hi-Lighters to Domes5c Markets, Flair has
successfully diversied its range of products, notably
with the addi5on of calculators, correc5on and gliEer
pens, all while revolu5onizing its own products.

The only company that allows you to write

stories that are 10000 meters long.

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2.3 ProducNon

In India
v Total of 600000 sq.j. of automated produc5on facili5es in 4 strategic loca5ons in India:
Surat: Special Economic Zone +20% export growth
Duman: +30% overall produc5on capacity
v Capacity of 5 million pens per day

In Africa
v Total of 40000 sq.j. of interna5onal produc5on facili5es in Egypt and Kenya:
3 produc5on lines for most in-demand products
v Capacity of 1 million pens per day

4500 225 40%

skilled employees trained dierent molds of sales are
with state of the art technology interna5onal

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2.4 A Company Ready To Grow
A Market Full of OpportuniNes
v A rising literacy rate in emerging countries
15.5 billion
v More students and corpora5ons than ever before global market in 2020
v The pencil: a product sourced from habits
A huge and growing industry that faces little slow down in terms of volume.

375 million Times CerNed

market in France

260 million B2B2C

2 ISO 9001:2008
SA 8000:2008
Big Capabilities.
Immense Potential.

120 million B2B

Times Stronger

440 million
market in India

Cello Pens acquired by BIC3

8
Literacy rates up by 12% in
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 3.0
Flair: A JusNed Industry Icon

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 3.1 Market Trends
Current Trends in France
v Digital devices are not a threat. Boom in Luxury Instruments
v Digital devices push the wri5ng instrument industry
New Types of Crajing
to create products that oer a fun and unique
Market
wri5ng experience. Demand from Organiza5ons
v Peak Season: June September (Back to School) Growth
Product Innova5on
v The French Market is slowly growing.
v Green-Pen market is facing dicul5es. Increase in Home Oces
v E-commerce is seen as a cheapest way to consume.
From writing to adult coloring, a number of
exciting trends emerged and reemerged in
The French Market 2015 which helped grow dollar sales for key
The French B2B is a stable 120 million market. players in the office supplies industry. These
Main distributors are JM Bruneau, JPG, Viking Direct. trends continue to have a positive impact on
sales. There is a lot of creativity and innovation
Limited but growing budgets have led the customers
in both pens and complementary products.
to focus on discounts. Whether its taking notes in an office meeting,
Most customers are familiar and loyal to BIC. journal keeping, coloring, or finding that special
Environmental causes have become mainstream. lifestyle or luxury pen, many consumers are still
Internet shopping is gaining popularity. handwriting. L. Nsouli, Office Supplies
Industry Analyst.

Post-It pen
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 3.2 Market Volume

A Market Thats Not Ready To Slow Down

EvoluNon of the market in value and volume
from 2010 to 2012
v Ball point s5ll star product, with
18.6% Market Share, followed EvoluNon in Value EvoluNon in Value % of sales in the
(2010-2011) (2011-2012) market in Value
closely by markers and rollers.
Ball Pen 6% 1% 18,6%
Pencils -5% -13% -
v Low varia5on in volume but Rollers -3% 1% 16,6%
considerable increase in value. Felts Pen 11% 3% -
Markers 4% -4% 17,5%
Highlighters 5% -2% -
v Back to School campaigns are Erasers 3% 2% 15,1%
responsible for 40% of annual sales.
EvoluNon in Volume EvoluNon in Volume % of sales in the
(2010-2011) (2011-2012) market in Volume
v 1.2bn in sta5onery sales in 2015 in Ball Pen 5% -1% 33,0%
France. Pencils -12% -2% -
Rollers -9% -3% -
Felts Pen 0% 3% -
v 60% of French Market Share owned
Markers 7% -3% 13,7%
by BIC. Highlighters 7% -3% -
Erasers 5% 9% -

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3.3 Market Segments & Customer Needs
The market segmenta5on was done by analyzing airs exis5ng Strategic Business Ac5vi5es:

Manufactures Sta5onery

B2B B2B2C

Oce Suppliers Corpora5ons Collec5vi5es Small & Medium

Specialized Shops Megastores Stores

v Price Conscious
v Price Conscious v Quality Conscious
v Quality Conscious v Durability Conscious
v Durability Conscious
v Comfort Conscious
v Comfort Conscious v Durability of Ink
v Innova5on and Novelty
v Brand Name & Image

By analyzing the customers needs by business model, it can clearly be seen that the B2B2C model requires heavier
investments in order to keep up with the trends and temporary demands.
 3.4 CompeNNon in France
v Headquartered in France Best Seller
v 800m turnover in 2015 in France
v 17000+ employees
Main domina5ng player v 54% of sales from B2B2C
Original BIC
to watch out for v 40% of sales comes from Back to School season

v Headquartered in Japan
v 147m in 2012 in France
Global player with signicant v 17438 employees
presence on the French market v 44 million pens in France Pilot V5 Hi-TecPoint

v Headquartered in Japan
v 12m turnover in 2015 in France
v 2300 employees
Minor player in the market v 15 million products distributed in France Ball Pentel R50
with a common product

v Headquartered in Germany
v 601m turnover globally
v 4680 employees
Main player in highlighters
v 55% of Stabilo Boss are sold in France Stabilo Boss Original
v 11 million products distributed in France
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3.5 CompeNNon Benchmark

Date of crea5on 1945 1918 1946 1875 1931

Na5onality French Japanese Japanese German Indian
Corpora5on BIC Group Pilot Corpora5on Pentel Group Schwan-Stabilo Group Flair Group
Global Turnover 2.34 Billion (2015) 793 Million (2008) - 601 Million (2012) 93 Million (2015)
European Turnover 608 Million (2015) 220 Million (2008) - - -
IdenNty

French Turnover - - 12 Million (2015) 27 Million (2012) -

Turnover's Growth 13,3% growth (2014) 56% growth over 5 years - 16% growth (2011) -
Headquarter Clicly (France) Tokyo (Japan) Tokyo (Japan) Heroldsberg (Germany) Mumbai (India)
Number of employees 17 438 1 082 2 300 4 680 4 500
Presence 160 countries 100 countries 120 countries 130 countries 75
Number of Retailers in the world 3.2 million - 21 sales oces - -
Number of Retailers in France - - - 64 stakeholders 0
Classic Cristal Roller Pen V5 HighTechpoint Gel Pen Energel Stabilo Boss Original Hauser Quick
Best Seller
Pen, lighters, Cell Pens, Cosme5cs, Outdoor
Segments Pens Pens, Cosme5cs, Medical Pens, Pops
phones. ar5cles
Type of Products
Ball Pens
Gel Pens
Markers
Oer

Erasers - -
Pencils -
Rollers -
Highlighters
Felt Pens -
French Manufacture Marne la Valle Annecy Brie Sur Marne Eckbolsheim Mumbai
BtoB
BtoBtoC
E-commerce Website - - - - -
Marke5ng/Sales Strong Medium Medium Strong -
Strategy

R&D many new products many new products many new products many new products Acu Flow
Produc5on and SupplyChain Cost Leadership Cost Leadership Cost Leadership Cost Leardership Cost Leadership

Price, Quality, Diversity, Price, Quality, Diversity, Price, Quality, Diversity, Price, Quality, Diversity,
KSF SBA 1 Quality, Price, Diversity
Comfort, Design Comfort, Design Comfort, Design Comfort, Design
KSF

Fast Delivery, Quality, Fast Delivery, Quality, Price, Fast Delivery, Quality, Price, Fast Delivery, Quality,
KSF SBA 2 Quality, Price, Diversity
Price, Diversity Diversity Diversity Price, Diversity
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 4.0
Why Flair?
Because it is a recognized company with a local partnership and a strategic acquisi7on
that is innova7on driven, cost oriented, and that responds to compe77ve prices.

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4.1 A Recognized Company
Multi Awarded

Multi Certified

Nationally Recognized

50 years of experience

100 million pens in 2016

Internationally Awaited
Flair is making a name for itself through its own
achievements, notably for being the Most Promising
Brand in Asia for sta5onery. The company is growing
quickly by successfully implemen5ng its strategies in
75 countries, spreading its brand image that pleases
local popula5ons, thus showing that it has the
poten5al to be a major player on the French market.

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4.2 Strategic AcquisiNons & Partnerships

Newest Flair Acquisi5on Long Time Partner of Flair

Recognized Company in Europe Local representa5ve
85 years of experience and know-how Experience on the French Market
Key Success Factors: Quality, Diversity, Price Access to the Local Network
Products that respond to the demands of the Direct integra5on in the market
French Market
Highest Quality. Outmost Simplicity.
An Innovation Hungry R&D Team PCL SA has been a partner of the House of
Flair for many years. With a considerable local
Hauser leads a Cost Leadership Strategy with a
product range aErac5ve to French distributors that network and a clear understanding of the local
are diverse, but who compete ercely, whatever industry, PCL SA is an opportunity that Flair will
the SBA. exploit to develop Hausers products as the
Independence
Hauser brand on the French Market through
PCL SA.
Reversability Speed

A Winning Approach For Flair

Control ProtecNon

AcquisiNon MSc. Entrepreneurship & Innova5on

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Entry Mode
4.3 InnovaNon Driven & Cost Oriented
v Children and teenagers are lead users that can be highly inuenced by the uniqueness of the design
of a product. Flair ensures a design that is beau5ful and recognizable to the eye.
v Products range from best seller ball points to premium metal pens for individuals in school or
corpora5ons.
v Dis5nc5ve Gel Pens that respond to current trends, such as adult coloring books.

The designs are simple yet ergonomic, thus suitable for everyday use.

Acu-Flow is the smoothest wri5ng system made 5ll date.

With a technology that ensures both a quite and smooth mechanism,

and also an ultra smooth wri5ng experience amongst the many other
quali5es the House incorporates into its products, Hauser has a clear
chance of success on the French Market.

Writo-Meter 2 in 1
10000 m wri5ng length MSc. Entrepreneurship & Innova5on
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 4.4 CompeNNve Prices
v Lower Prices
With big volume produc5on and sales made in volume, Hauser is able to sell at compe55ve prices.
v Increased Budget
Todays family budget for the childrens school supplies has increased by 2% in 2016.
v Growing Market
The wri5ng instrument market is expected to grow by 2.1% in volume and 4% in value.

Price Competition is at an all time high

With the market price compe55on of pens being at all
5me high, companies have to focus on volume-based
models. Flair, with 600000 sq.m. of facili5es dedicated
to the produc5on of pens, has enough produc5on 0.175
experience for an ecient manufacture of their
per BIC pen
products. They have managed to cut costs with a cost-
ecient labor, and low rela5ve opera5ng costs of
factories.
By exploi5ng these resources now made available by
Flair, Hauser could exploit this opportunity and manage
to drama5cally reduce their costs, thus appealing to a
wider popula5on, successfully penetra5ng the French
0.220
market, and making a signicant impact towards its per BIC pen
compe5tors.

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 6.0
Financials

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6.1 ProjecNons for B2B

Basing our nancial projec5ons on industry standards, the net prot margin per pen is elevated at 11.4%.

B2B Year 1 Year 2 Year 3 Year 4 Year 5

Market share assumpNons % 2% 5% 8% 12% 15%
PotenNal turnover in miliion $ 2.6 6.6 10.6 15.8 19.8
PotenNal margin of sales 1.114 1.114 1.114 1.114 1.114
Total volume of sales 17.92 44.79 71.66 107.49 134.37
Total costs 2.37 5.92 9.48 14.22 17.77
EBIT 0.27 0.68 1.08 1.62 2.03

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6.2 Complete ProjecNon Table

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6.2 Complete ProjecNon Table

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