Industry and Sector
Wholesale Industry, Multinational Corporation, Tertiary Sector
Main Goals
Sanrio’s main goals are to produce original gift products and services that are from the “means of expressing our heartfelt feelings for others” (Sanrio, 2013). They abide by this philosophy in producing the most unique of gifts, and services, from a Hello Kitty Airline, theme parks, to boutiques, to fashion apparels, to accessories, to school stationeries, and much more. Their mission statement is known as “a small gift, a big smile” (Sanrio, 2013).
How They Started
It began with the founder Shintaro Tsuji, who was the owner, of Yamanashi Silk Company in 1960. He wanted to elaborate his business from silk to developing rubber sandals. At first, there were decorative flowers, but with a cartoonist at hand, a cute character was depicted on the sandal. Finally, in 1973, the company “Sanrio” was officially settled (Sanrio, 2013).
How They Have Grown Over The Years
In growing their business towards implementing unique gifts, Sanrio had opened a line of characters including the famous Hello Kitty:
Bad Badtz-Maru, Bonbonribbon, Charmmy Kitty, Chibamaru, Chococat, Cinnamoroll, Cinamoangels, Cocoa and Vanilla, Corocorokuririn, Dear Daniel, Deery Lou, Hangyodon, Jewelpet, Kappa Rumba, Kerokerokeroppi, Kuromi, Landry, Little Twin Stars, Lloromannic, Masyumaro, Miss Bear’s Dream, Monkichi, My Melody, Nemukko Nyago, Pandapple, Pannapitta, Patapatapeppy, Pekkle, Pippo, Plasmagica, Pochacco, Pompompurin, Spottie Dottie, Sugarbunnies, Sugarminuet, Tenorikuma, Tuxedo Sam, Usahana, Wish Me Mell, and Zashikibuta (Sanrio, 2013).
Sanrio later established international business first with the US, and then with Europe in the 1980’s. Their social communication has succeeded greatly due to the Hello Kitty craze. In the late 1980’s to 1990’s, Sanrio began to pursue business in Latin America and in Asia. Furthermore, Hello Kitty’s success has prompted them to open Puroland, a theme park, in Japan. Harmonyland later followed and was also opened in Japan. Today, Sanrio is a multinational corporation all across various countries, due to their social communication success with Hello Kitty (Sanrio Company, Ltd., 2013).
Who Runs the Business
The founder was Shintaro Tsuji, but is now owned by:
Sega Sammy Holdings, 13.9%
The Bank of Tokyo-Mitsubishi UFJ, 4.6%
Sumitomo Mitsui Banking Corporation, 4.3%
Japan Trustee Services Bank, 3.4%
The Master Trust Bank of Japan and Nippon Life, 2.4% each
Mizuho Corporate Bank, 2.1%
Shintaro Tsuji, 2%
Grupo Televisa, 5% (Sanrio, 2013)
Chairman, President, and CEO: Shintaro Tsuji
Managing Director and CFO: Tetsuo Uohashi
VP Marketing, Sanrio Inc.: Andrea Sobel (Sanrio Company, Ltd., 2013)
Main Product(s)/Service(s)
Their main products, according to Sanrio (2013), are fashion, entertainment, gifts, and accessories. Furthermore, they have also opened two theme parks (Puroland and Harmonyland) both in Japan, and an airline (Sanrio, 2013). In addition, Hello Kitty is their iconic brand (Sanrio, 2013).
Main Target Market
Their main target market started out with teenage girls and boys. After Sanrio’s expansion to the US, the demographics changed to older consumers, as Hello Kitty became a fashion statement (Sanrio Company, Ltd., 2013).
The Supply and Demand of Hello Kitty
Hello Kitty, Sanrio’s main selling character of their product lines, also became a global brand. Moreover, Hello Kitty accounts for approximately 80-90% of its sales (SR Research Report – Sanrio Co., Ltd. (8136), 2013). Although there were high sales, the product was elastic due to economic downturns in Japan. Because sales depend deeply on Japan’s economic growth, the supply and demand of Hello Kitty is elastic.
The Stages of Production
Sanrio Co. Ltd. begins with manufacturing their products in three factories:
- First-Bright Wintech Co., Ltd.
- Fuzhou Fushi Toys Co., Ltd.
- Jiangmen Fujitoy Ltd. (TFK Sky Limited Company Profile, 2011)
This stage is known as the Secondary Stage where raw materials are manufactured into products. After the Secondary Stage, Sanrio Co. Ltd. goes through the Tertiary Stage where their final products are sold through retail, wholesale, and licenses (Sanrio, 2013).
An Overview of Their Productivity
According to TFK Sky Limited (2011), their productivity overview can be analyzed by the following figure:
Figure 1: Production Overview (TFK Sky Limited, 2011)
The Pricing For Main Products and Services
Bags & Wallets: $9.50 – $90.00
Electronic Accessories: $3.15 – $129.00
Home Accessories: $4.45 – $199.00
School & Office Stationery: $1.75 – $75.00
Designer Collections: $5.00 – $300.00
Jewellery: $5.95 – $275.00
Plush & Toys: $6.95 – $200.00
Phone Case Accessories: $24.95 – $39.95 (Sanrio, 2013)
Puroland:
Welcome Ticket
Good for entrance and all free shows.
Same-day Purchase:
| Adult(18 years and over) | 3,000 yen |
| Youth(12-17 years) | 2,700 yen |
| Junior(4-11 years) | 2,000 yen |
Figure 2: Puroland Ticket Source: http://www.puroland.co.jp/english/ticket.html
Harmonyland: Passport Ticket 2,800 yen – applicable to adults and children (Harmonyland, 2013)
Significant Fixed and Variable Costs
At Sanrio Co. Ltd., their variable costs, for 2013, would be as follows (in million Yen):
- Provision for Bad Debt
- Miscellaneous Wages
- Employee Bonuses
- Provision for Employee Bonuses
- Provision for Director Retirement
- Depreciation
At Sanrio Co. Ltd., their fixed costs would be:
- Advertising
- Rent
- Land
- Salaries
- Shipping & Handling
- Director Bonuses & Salaries
Company Profits and Profit Margins
Sanrio Co. Ltd. Company Profits are 49,435 (million Yen), and their Profit Margin is at 16.8%. Please note that this is the statistical report for 2013 (SR Research Report – Sanrio Co., Ltd. (8136), 2013).
Their Strongest Competitors
Their strongest competitors would be: 4Kids Entertainment, Inc.; Andrews McMeel Universal; Applause Enterprises, Inc.; Bandai Co., Ltd.; Hasbro, Inc.; Arvel Enterprises Inc.; Mattel, Inc.; Nintendo Co., Ltd.; Russ Berrie and Company, Inc.; The Walt Disney Company (Sanrio Company, Ltd., 2013).
Strengths
- Strong Hello Kitty Brand – The character is still popular after 40 years, and remains a global fashion statement now.
- Strong financial record – They are debt free for recent years, as their equity has increased.
- Proven track record of successful license business – Their successful licensing operation with Europe, and because of this, they can apply to other markets worldwide (SR Research Report – Sanrio Co., Ltd. (8136), 2013).
Weaknesses
- High dependence on one character – If demand (consumer preferences) for Hello Kitty decreases, there will be significant impact on the company.
- Singular corporate direction – Their business licensing and business sales do not have an evident strategy; therefore, without a strong corporate direction, it can be detrimental to their operations (SR Research Report – Sanrio Co., Ltd. (8136), 2013).
Summary
In short, Shintaro Tsuji’s main purpose of Sanrio Co. Ltd. was not for profit, but instead, stemmed from his childhood experiences. He wanted everyone to be happy, harmonious, and most importantly, to have social communication. That is where Sanrio derives its mission statement “a small gift, a big smile” (Sanrio, 2013).
Bibliography
(2011). TFK Sky Limited Company Profile. Hong Kong.
Harmonyland. (2013). Retrieved from Harmonyland: http://www.harmonyland.jp/english/harmony/harmony.html
Sanrio. (2013). Retrieved from Sanrio: http://www.sanrio.com/about-sanrio/
Sanrio. (2013, August 19). Retrieved from Wikipedia: http://en.wikipedia.org/wiki/Sanrio
Sanrio Company, Ltd. (2013). Retrieved from Answers: http://www.answers.com/topic/sanrio-company-ltd
(2013). SR Research Report – Sanrio Co., Ltd. (8136). Tokyo: Shared Research Incorporate.
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