Background
Caran d’Ache was founded in 1915, in Geneva. It has been majority owned by the Schweizer family since 1924. The company is now directed by Carole Hubscher, representing the 4th generation of a family involved at the highest level of decision-making since the 1930s. The name, Caran d’Ache, is the be translation of ‘pencil’ in Russian! The company’s business falls into two parts: writing instruments, ranging from classics ball pens such as the 849 or unique luxury pieces and Beaux-arts or colors, which covers coloring-related items for artists, as well as for hobbyists and amateurs. The company employs 300 people in Geneva, representing around 90 different know-hows.
Philosophy
The philosophy of Caran d’Ache is based on a long-term vision. This implies that all manufacturing, except for a small leather good business for making covers for writing instruments, is based in Geneva, i.e. nothing is located in so-called low-cost countries. The company’s wide variety of products are all made in-house. Thus, Caran d’Ache controls all manufacturing know-hows that are critical for the company. Other aspects regarding the firm’s long-term philosophy can be seen when it comes to the company’s choice of only top-quality raw materials, as well as when it comes to its emphasis on sustainability. This is all part of Caran d’Ache’s unwritten contract with the consumers: top quality, sustainability, and superb functionality.
The focus on re-use and recycling is a key feature in Caran d’Ache’s long-term philosophy, as mentioned. This takes many forms. For instance, through a joint venture with Nespresso the company makes use of recycled aluminum from coffee capsules making in its casings of its upper-scale ball-point pens. To use wood waste and dust from its pencil manufacturing operations for heating is another example.
Ms. Carole Hübscher
Caran d’Ache is a stock-based entity, with the President of Caran d’Ache, Carole Hübscher. Her sisters, cousins and another family are amongst the shareholders.
Ms. Hübscher has been President of Caran d’Ache since 2012. She was educated at a Swiss hotel school, and then worked for a while for Caran d’Ache – USA, the distributor of Caran d’Ache in the US, and a corporation independent from its parent. She then took further education at Harvard, for then to return to Switzerland, where she first worked for Mr. Hayek, the Swatch Group, in its join venture with Calvin Klein in its watch business segment. Ms. Hübscher felt that her experience in the watch business was a key for a better understanding of branding. After four years she started her own consulting company, with a focus on branding and retailing. Then she joined Caran d’Ache, first as a board member, and as noted, as President from 2012 onwards.
The Consumer
Ms. Hübscher spends a good part of her time on interacting with consumers. She feels that this helps her to better understand their needs and changing preferences. Four classes of key issues seem to be emerging from this, above all:
Changes in distribution seems to be particularly key. And, while Caran d’Ache started its own online shop already eight years ago, and virtual distribution is going well, this move is perhaps, particularly key these days with the Corona virus threat being such a major issue. It should be noted here that the company’s products in general are well known, (“a pen is a pen”), as well as relatively compact in size, and easy to understand. Thus, there is, for instance, no need for the consumer to try the products out at home, for then to potentially return some of this. In short, virtual shopping seems to be well suited for Caran d’Ache’s offerings.
To communicate with consumers in actual purchase settings, in store is key. Traditionally Caran d’Ache has worked largely through distributors. Most of the store outlets are upper-end department stores, as well as book or paper stores, art stores, and specialty stores for writing instruments. The shop-in-shop concept is also well developed. Caran d’Ache has also always had its own shops. Today we count two in downtown Geneva, and one at each of the following locations; Geneva Airport, Zurich, Tokyo, Berlin and in Lausanne). These stores are places where Caran d’Ache can further strengthen the direct communication with the consumer. They do not only serve as products outlets, where customers can interact with the firm, but also as educational entities for art education. Artists are coming to these stores, and often discuss their experiences with the use of various Caran d’Ache products. Incidentally, Carand d’Ache now offers virtual courses in response to the Corona virus threat which regulates most stores to close to ordinary operations.
The Caran d’Ache website. Although it has been there for a long time, the website has been redesigned around one year ago and gives the management of the company relevant insights about emerging consumer preference shifts and needs. According to Ms. Hübscher, this has inspired the company to come up with several direct innovative product ideas.
There is a rapid advent of emerging IT technology, such as laptops, email, mobile phones, etc. – and this could have had a negative impact on writing, but reality tells us a different story. There is no doubt that mankind’s mode of communication is changing dramatically, with more email interactions, on iPads, mobile phones, etc. resulting in less conventional writing. Still, the act of writing remains a strong reality! There will now be a more exclusive activity, which underscores that the sender is actually taking care, and spends the sufficient time! On top of this, everyone would own a pencil anyhow, and/or a ball-point pen. And, most people still know how to write! In summary, writing is partly becoming an act of exclusivity, partly an act of writing short daily notes.
Caran d’Ache’s product portfolio
As noted, the company’s business can be broadly divided into two parts, more-or-less equal in size: fine arts/colors and writing instruments. Thus, the company’s range of products is indeed broad! And, as noted, all of these products are made at the manufacture in Geneva. Thus, there is a wide base of know-hows residing in the company, in order to make it a reality to produce this wide array of products.
There is also a strong focus on in-house training, to maintain this wide array of knowledge. Caran d’Ache is one of the few remaining producers of pencils in Europe, with in-house training being the only option when it comes to remaining on top of relevant technologies.
To maintain efficiency is, of course, also key. Employees are themselves also strongly encouraged to come up with better ways with the dictum being “good can often be made even better”.
The Swiss made strategy
Caran d’Ache has become an integral part of Geneva and Switzerland. There are at least three corollaries here:
All manufacturing is done in Switzerland, as noted, and in line with the company’s focus on the upper end of the prestige and quality scale.
The company image is thus one of exclusivity, consistent with the image of Switzerland as a high-quality producer. As noted, only the best raw materials are used. There are many similarities between Caran d’Ache and other luxury brands. Still, the company has resisted any attempts to broaden its product line into other areas, through building on its strong brand. Focus on its high-quality niche is seen as key!
The staff of 300 represent a stable part of the company, with the average employment tenure being more than twelve years. it is part of Caran d’Ache’s top-quality/exclusive profile,
Innovation
Innovation is key for most Swiss-based firms to stay competitive, so, also for Caran d’Ache. Here is how:
There are two Research and Development groups, one for the Fine Arts business and one for writing instruments. Both groups are closely linked to their customer bases.
There is thus a close contact with the exceptionally loyal customer base.
The employee’s ongoing efforts to always improve is also key. The long tenure for employee does not seem to hamper the employees’ ability to stay open, and to adapt. The work force sees this as essential!
Leaders and Succession
There are six or more members of the next generation of family members, who might potentially have future leadership roles in the company. But these persons are still young! The Chairperson is adamant that any of these who might want to enter the firm in the future must wish it, want it – and they must be good! They must be interested and also prove that they deserve it! A position is never granted. These issues are openly discussed among the family stakeholders.
It should be noted that the CEO is a non-family member, who previously worked for SGS and the security ink company SICPA.
Conclusion
Caran d’Ache seems to be successful primarily for the following reasons:
Strong family values; with a long-term focus, as well as a committed leadership team.
Focus on high-quality products.
Customer driven improvements seem particularly key! Use of the best raw materials only; and to re-use/recycle.
A strong image, and a great community behind this.
Innovation, not only in products but also in distribution.
Stable work force.
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