CONSTRUCTION OF THEMATIC PORTFOLIO ON

OFFICE SUPPLY INDUSTRY

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS

FOR
MASTER OF MANAGEMENT STUDIES (MMS)
2017 – 2019

SUBMITTED BY
VIREN B KHATRI
ROLL NO.: M-17-24

PROJECT GUIDE
PROF. GAZIA SAYED

IES MANAGEMENT COLLEGE AND RESEARCH CENTRE

BANDRA (W), MUMBAI
 IES Management College and Research Centre
Bandra (W), Mumbai

Declaration

I hereby declare that this report, submitted in partial fulfillment of the requirement for the
award of Select your course, to IES Management College and Research Centre is my
original work and not used anywhere for award of any degree or diploma or fellowship or
for similar titles or prizes.

I further certify that without any objection or condition, subject to the permission of the
company where I did my management project, I grant the rights to IES Management
College and Research Centre to publish any part of the project, if they deem fit in
journals/Magazines and newspapers etc without my permission.

Place: Mumbai _______________________

Date: 04/04/2019 Signature
Viren B Khatri
Select your course M-17-24

i
 IES Management College and Research Centre,
Mumbai

Certificate from the Guide

This is to certify that the project titled Click here to enter text. has been submitted in
partial fulfilment for the award of Select your course, 2017 – 2019 of IES
Management College and Research Centre, is a result of the bonafide project work
carried out by Mr. Viren B Khatri under the supervision and guidance of Prof.
Gazia Sayed
No part of this report has been submitted for the award of any other degree, diploma,
fellowship or other similar titles or prizes. The work has also not been published in
any journals/ Magazines.

--------------------------------------------------------- ----------------------------------------------------------
Guide: Prof. Gazia Sayed Director: Dr. Dinesh D. Harsolekar
Place: Mumbai Place: Mumbai
Date: 04/04/2019 Date:

ii
 Acknowledgements

I am using this opportunity to express my gratitude to everyone who supported me

throughout the course of this MBA project. I am thankful for their aspiring guidance,
invaluably constructive criticism and friendly advice during the project work. I am
sincerely grateful to them for sharing their truthful and illuminating views on a number of
issues related to the project.

I would like to thank my seniors and managers in office who have helped my guide
throughout this project and giving their feedback on improvising upon the content and the
quality of project.

I would also like to thank my project faculty guide Prof. Gazia Sayed who gave me an
opportunity to work on this project and all the people who provided me with the facilities
being required and conductive conditions for my MBA project.

Sincerely,

Viren B Khatri

iii
Table of Contents
Executive Summary _____________________________________________________ 1
Chapter 1 _____________________________________________________________ 2
1.1. Introduction to the Industry ____________________________________________ 2
1.2. Introduction to the Project _____________________________________________ 3
Chapter 2 _____________________________________________________________ 5
2.1 Literature Review ____________________________________________________ 5
Chapter 3 _____________________________________________________________ 7
3.1 Research Methodology ________________________________________________ 7
3.2 Scope and Limitations _________________________________________________ 8
Chapter 4 _____________________________________________________________ 9
4.1 Data Analysis & Findings ______________________________________________ 9
Chapter 5 ____________________________________________________________ 53
5.1 Conclusions _________________________________________________________ 53
5.2 Recommendations ___________________________________________________ 54
References____________________________________________________________ 55

List of tables:
Table 1 Top competitors of the U.S. revenue wise ............................................................... 12
Table 2 Exposure of Steelcase.............................................................................................. 23
Table 3 Exposure of Steelcase.............................................................................................. 24
Table 4 Exposure of Herman Miller .................................................................................... 26
Table 5 Exposure of Knoll Inc ............................................................................................. 27
Table 6 Kimball International Inc........................................................................................ 29
Table 7 Exposure of Xerox ................................................................................................... 30
Table 8 Exposure of Canon .................................................................................................. 32
Table 9 Exposure of Dell...................................................................................................... 36
Table 10 Exposure of Hewlett Packard ............................................................................... 37
Table 11 Exposure of Apple ................................................................................................. 40
Table 12 Exposure of Alphabet ............................................................................................ 42
Table 13 Exposure of Microsoft ........................................................................................... 43
Table 14 Exposure of Avery Dennison ................................................................................. 46
Table 15 Exposure of Office Depot ...................................................................................... 47
Table 16 Exposure of USA Technologies ............................................................................. 51

iv
List of figures:
Figure 1 Worldwide Revenue generation ............................................................................ 12
Figure 2 NAO-North American Operations ......................................................................... 13
Figure 3 HP’s Market Share in the US from 2010 to 2016 ................................................. 15
Figure 4 The Growth of PCs, Laptop and Tablets ............................................................... 15
Figure 5 Office Stationery Bifurcation ................................................................................ 16
Figure 6 Key Growth Indicators .......................................................................................... 16
Figure 7 Sales value of office supply and stationery stores in the US ................................. 17
Figure 8 Product-wise demand of Stationery items ............................................................. 17
Figure 9 Office Construction Spending ............................................................................... 21
Figure 10 Revenue ............................................................................................................... 22
Figure 11 Adjusted EBITDA ($ Millions) ............................................................................ 22
Figure 12 Global Furniture Market Sales ........................................................................... 22
Figure 13 Market Coverage of Office Furniture in North America .................................... 24
Figure 14 Breakup of Revenue Segment-wise ...................................................................... 26
Figure 15 Trends of Corporate profits of Knoll Inc. ........................................................... 27
Figure 16 New Product introduction and Year on Year growth.......................................... 28
Figure 17 Sales growth each quarter................................................................................... 28
Figure 18 Breakup of Revenue by Vertical Markets ............................................................ 29
Figure 19 Composition of Sales by Region .......................................................................... 31
Figure 20 Sales Composition of Office Supplies ................................................................. 31
Figure 21 Sales Segmentation.............................................................................................. 32
Figure 22 Product-wise Sales Contribution ........................................................................ 33
Figure 23 Exposure of RIcoh ............................................................................................... 34
Figure 24 Geography-wise Sales contribution .................................................................... 34
Figure 25 Trend followed by Desktop Computers ............................................................... 36
Figure 26 Breakup of Net Revenue of 2018 ......................................................................... 36
Figure 27 Y/Y revenue Growth % ........................................................................................ 38
Figure 28 Net Revenue by Key Segment and Business Unit ................................................ 38
Figure 29 Net Revenue by Regions ...................................................................................... 39
Figure 30 Revenue breakdown for Personal Systems .......................................................... 39
Figure 31 Net Sales breakup by product sold ...................................................................... 40
Figure 32 Net Sales by Geographic Region ......................................................................... 40
Figure 33 Contribution to Net Sales (Geography-wise) ...................................................... 41
Figure 34 Revenue breakup by products and services offered ............................................ 43
Figure 35 Segment-wise breakup of Total Revenue ............................................................. 45
Figure 36 Overview of CompuCom’s Performance............................................................. 47
Figure 37 Omni-channels of Office Depot ........................................................................... 48
Figure 38 Impact on Office depots’ Capability by acquiring CompuCom .......................... 49
Figure 39 Trends of revenue growth and segment breakup ................................................ 50
Figure 40 Industry Leader in terms of Shareholder returns since IPO ............................... 52
Figure 41 Breakup of Business Segments ............................................................................ 52

v
 Executive Summary

The project is based on creating a portfolio on a theme which would be worth

investing and would definitely give be better returns in future. This theme is for
theme based investments for US economy. Office Supply has been chosen as a
unique theme for which there no one has developed a theme as of yet.

Office Supply includes everything that is consumable in office starting from small
stationery to big vending machines. This is a very lucrative theme for the investors in
US because of the rate at which start-ups are coming into existence. Also, there are
many health issues and thus there is more demand for ergonomically developed
chairs.

On an average a person spends his One-thirds amount of time in office and seeing
the current scenario the office hours are increasing. Hence, office is a second home
to an employee and thus there is a high demand to develop an office on similar lines
as that of a house.

Thus there is a huge expenditure incurred to make office a best workplace. Hence
there has been a high demand to technology aided office supply. Hence, this theme
was chosen keeping in mind all the listed company in a particular segment.

And thus a research was carried out on each company and thus came out with the
exposure of how much percent of company’s revenue are related to office supply or
a particular segment of office supply.

1
 Chapter 1
1.1. Introduction to the Industry
The industry that I have worked for is Financial Services. The project is
primarily based on investments in Theme-based portfolios which is a part of
portfolio management. This is a special category of in portfolio management.

Financial service industry covers mainly every aspects of finance, starting from
providing banking services, research services to non-financial services. The main
objective is to facilitate services in finance industry and also covers various
function of finance.

Portfolio management is an important function of financial services. It is based

on skills as well as decisions made to invest in right industry at right time. Also
theme based investing is a part of portfolio management but is not that prevalent
in India but is generally used in more advanced and stable economies.

Before investing in theme based portfolios it is very important to know about the
theme one has chosen and depending on that one can make future forecasts using
different technical analysis and combing it with fundamental analysis.

This investment is also a pooled investment same as mutual fund but investment
is based on very niche industries and can be segregated into a theme accordingly.

2
1.2. Introduction to the Project
Thematic Funds are funds which are used as an investment tool. Just as we have
mutual fund as a tool for investment, where the funds from like-minded investors
are pooled together to form a corpus of investment. Like-minded investors are
those who have a similar objective, risk-taking ability and looking for similar
returns.

As mutual funds are of many types ranging from Large-Cap Funds to Ultra-short
Cap Funds, growth funds and direct funds, open-ended funds and closed-ended
funds. Similarly, Thematic Funds are primarily theme based investments.
Themes over here can be constructed based on various sectors which can range
from very large sectors like aviation sector to very niche sectors like Li-Fi
Technology.

Selecting a sector is an initial stage of making an investment. Many factors are

considered while selecting a sector. From the perspective of an investor
 The risk-taking ability is an important factor to be considered
 The sum of investment is also a crucial factor
 The tenure of an investment
 Expectations from an investment
 Preferences of a sector or the taste of an investor
For the construction of any thematic portfolio, a portfolio manager needs to look
at various factors like:
 Future prospects of the companies under that particular portfolio
 Performance of companies in past (Looking at its trends)
 Macro Factors affecting the company. E.g. Fluctuations in prices of
crude oil due to ongoing trade wars may affect the companies exporting
from U.S.
Thus undergoing an analysis of portfolio being affected by different
factors is very crucial responsibility.
 Continuously monitoring several parameters of the percentage of
investments in sub-segments is also a very important thing to get
maximum returns out of a given investment.

3
Thematic investment is very crucial when we talk about the returns generated. It
is also a very unique way of parking an investor’s money. There can be many
portfolios that can be constructed. These portfolios can be constructed by
thinking about different sectors, where business has its operations.
The thought process that I had while constructing a portfolio on office supplies
was:
 I went through the list of all portfolios that already existed.
 After analysing the list, I searched for any scope left for constructing a
new portfolio
 I found that Office Furniture was sector on which there was no portfolio
developed.
 But again while thinking on a portfolio, one needs to analyse its
feasibility.
 I found that there are very few industry giants in Office Furniture
segment.
 But to make any portfolio there is a need for at least 15 to 20 companies.
 So, I thought of increasing the size of the industry rather than being too
niche.
 Office Supply was something that would suffice the requirements of
constructing a portfolio.
 So, Office Supply is a very big industry in itself. The Demand is
perpetual and with technology increasing at a lightning pace
(technologies like IoT, Sensor Fusion and Artificial Intelligence (AI)) the
impact on whole office supply industry is positive.
 Hence Office Supply becomes a sector and there can be many sub-
sectors under Office Supply.
 Every sub-sector has many listed companies under it. Thus it is
important to know what percentage of revenue is relevant to a particular
theme.

4
 Chapter 2
2.1 Literature Review
1. Thematic Portfolio Optimization: Challenging the Core Satellite
Approach

Abstract

In recent years, thematic exchange-traded funds (ETF) have increased in

economic significance. Investors in thematic ETFs have more than just
financial objectives and gain a non-monetary added value from a thematic
portion in their portfolios. Therefore, traditional portfolio optimization
models which target only financial criteria cannot suit these investors’ needs
anymore. Nevertheless, to count in their thematic interests, investors adapt a
core satellite strategy in which conventional core portfolios and thematic
satellite portfolios are combined. Thus, these portfolios are separately
optimized without further considering inter-portfolio correlation effects.
Since modern portfolio theory has originally been established to, inter alia,
optimize these correlation effects, portfolios can only be efficient by chance.
Therefore, this study targets the correlation effects between conventional and
thematic portfolios and introduces a tri-criterion thematic portfolio
optimization model as an overall framework. Throughout a two-part analysis
with tradable ETFs and a simulation with 250,000 draws and 1,750,000
portfolio optimizations performed, the status quo is compared to the new
model. Quantifying the suboptimality, simulation results show a mean
portfolio improvement of 6.23 % measured as relative yield enhancement.
Further analysis concludes that the more narrowly a theme is being defined
and the more particular it is relative yield enhancements can increase up to
46.88 %.

(Methling & Nitzsch, 2018)

2. Thematic Indexing, Meet Smart Beta! Merging ESG into Factor

Portfolios

5
Abstract

Many investors are starting to explore ways to integrate environmental, social

and governance (ESG) considerations into their portfolios. Factor portfolios
and indices which integrate ESG allow investors to capture both the long-
term durable factor premia while allowing them to invest in companies with
attractive ESG attributes. Traditional factors and ESG both have strong
investment rationale for investors with long horizons. But how should
blended ESG-factor portfolios be constructed? This paper discusses several
ways in which to integrate ESG in factor portfolios. We show that the choice
of which approach depends on the investor’s investment rationale behind
integrating ESG, desired exposure, performance expectations, and preference
for conceptual consistency.

(Bender, Sun, & Wang, 2017)

6
 Chapter 3

3.1 Research Methodology

Type of Research

The Type of Research is secondary research because it is based on

investment in thematic funds which requires research about the company
and how the theme is performing based on different reports and financial
statements of company as well as industry

Research Design

The prime objective of the project is to study about how investing in office
supply can be a beneficial towards generation of profits and which is
combined with what percentage of company’s revenues are relevant to the
theme.

7
3.2 Scope and Limitations
This project is mainly built through secondary research and this theme
requires an extensive research before it can be implemented and can be fit
to be implemented for commercial use.

The sources used were authentic but this project needs more reliable sources
along with primary research. There needs to be survey done or an interview
with person who is a shareholder of a company.

Being Indian and making comment US economy would not make project
reliable but a taking help of a US based researcher or analyst would be a
value addition to this project.

8
 Chapter 4

4.1 Data Analysis & Findings

Thematic Funds
Steps involved in the construction of a theme

Step 1

Select all U.S. listed securities, American Depository Receipts (ADR) that is
traded on the NYSE, NASDAQ, NYSE AMEX and NYSE ARCA.

Step 2

Exclude all the following type of securities from inclusion in portfolio:

 Bulletin boards
 Pink sheet names
 Equity Derivatives
 Over the counter (OTC) products
 Royalty trusts
 Closed-end fund shares
 Exchange traded funds (ETF’s)
 Exchange traded notes (ETN’s)
 Convertible notes
 Warrants
 Rights
 Mutual funds
 Unit Investment Trusts

Step 3

Exclude all the companies whose market capitalization is less than $100 million
and whose share price is below $1. These companies are categorized as
microcap companies and they are generally not considered because they are very
illiquid as compared to the large cap companies. Also, such companies are very
speculative and volatile in nature.

9
Step 4

In order to screen out securities for liquidity, we establish an annual traded value
ratio (ATVR). ATVR is obtained by averaging all monthly traded values and
multiplying it with 12. Exclude all those securities whose ATVR ratio is less
than 2.5% of its Market Capitalization in the past 12 months, implying that they
are highly illiquid.

All those securities which are part of above screened out security are part of the
theme. The performance of the constructed security needs to be monitored on the
continuous basis. As and when announcements are made, there comes a need of
modifying the companies under the theme accordingly.

Office Supplies
Office supplies are basically consumables and equipment regularly used in
offices by employee in order to give a productive output. Also, it provides better
operating efficiency to an organization by improving productivity of employees.
(Wikepedia, n.d.)

Office Supply Industry is a competitive industry because in sub segments like

Office furniture, there are few key players dominating the entire market, which
results in Oligopolistic Competition. While in segments like Office Stationery,
there are many competitors which reduce the scope of keeping high prices in
comparison to its competitor, hence giving rise to perfect competition.

The competitive advantage of any particular firm depends on effective

merchandising, pricing, and an efficient distribution model. Industry giants
benefit from economies of scale and small companies try and provide best
customer services in order to compete with large players.

US industry is highly concentrated. The four largest companies account for about
85% of industry revenue. (First Research, n.d.)
Technology a crucial factor
Office supplies have been significantly benefitted from Technological
Advancement. Digitization has benefited the whole supply chain of the industry.
Successfully selling products through Online Channel have raised the bars for
other digital capabilities.

10
They are increasingly leveraging various online media formats, including
mobile-based applications and social networking sites, to expand their digital
presence.
Sub-Segments
Office Supplies typically vary from business to business, but few items are
common for every business. It includes small, expendable, daily use items,
consumable products, and small machines, higher cost equipment such as
computers, as well as office furniture and art.
There are few major sub segments that cover office supplies. They are:
1. Office Furniture
2. Photocopier
3. Personal Computers
4. Office Stationery
5. Vending Machine

Office Furniture
Office furniture are objects designed, manufactured and sold to offices in order
to support employees by improving their efficiency, thus increasing the profit
margin of that company. There are many big players whose revenue in more
than $ 2.5 billion. Also there are various upcoming start-ups in the US market
The competitive advantage for companies in office furniture is because of few
parameters. They are:
 Combination of insight
 Product performance
 Design
 Price
Relationships with customers, architects and designers (Steelcase, 2018)
The Major Players in this sub segment includes:
 Steelcase
 HNI Corporation
 Knoll
 Herman Miller
Domestic revenue from these companies represents approximately one-half of
the U.S. office furniture industry.

11
Basic Products in Demand
When analysing geography wise demand of product North America has the
highest demand for office furniture with a market share of 33.21% in FY 2016.
Due to an expansion of the workforce, there has been an increased demand for
more office spaces and construction. This has led to an increase in demand for
office supplies.
Highly demanded office product includes office chairs which have a market
share of 13.9% in the year 2016.
Revenue in the Office Furniture segment amounts to US$ 46,203m in 2018. The
market is expected to grow annually by 0.2% (CAGR 2018-2021). Also per
person revenue generated is US$ 140.93 during FY 2018. (Goldstein Research, n.d.)

Figure 1 Worldwide Revenue generation

Country Revenue generated(in USD millions)

U.S. 46203
Italy 6177
Germany 6002
Canada 4999
Table 1 Top competitors of the U.S. revenue wise

Long working hours has led to less movement and has also led to many health
problems like arthritis and joint related problems. Hence the sale of swivel

12
chairs, stacking chairs, ergonomic chairs and benches have increased over the
years due to the necessity of comfortable working hours.
Photocopier
It is a machine that makes copies of documents and other visual images onto
paper or plastic film quickly and cheaply. It has its application in the education
domain and also a high demand in business.
In global comparison, most revenue is generated in the United States
(US$1,336m in 2018) this shows that there is a high demand for photocopier in
the US market and a potential for high growth
The major player in the US market is the founder of photocopier that is Xerox.
Rest of its competitors are Japan-based been listed on US stock exchange, which
includes:
 Canon
 Fujifilm Holdings
 Ricoh Co. Ltd

Figure 2 NAO-North American Operations

(Comdoc, n.d.)

Technology Driving Sales

The main driver for Xerox has been the advent of new technology. New
products have come up in the market like Multi-Functional Printer (MFP). It is a
device providing centralized document Management, distribution and

13
production, making it easy for employees. MFP typically has many
functionalities and is a combination of many devices like

 Email
 Fax
 Photocopier
 Printer
 Scanner

(Wikipedia, n.d.)
Personal Computers
Personal Computers have been important office supply segment. It has improved
the efficiency and accuracy of workers by providing different software and
communication functions to help execute work task. It has been an integral part
of every office without which the life cannot be imagined.
Multi-component desktop computers are commonly designed to use in a
particular location and Laptop computers have made life easy by embedding an
option of portability. Nowadays, the pace of technology has made desktop
computers obsolete, by introducing Laptops and Tablets.

Key Stats on Personal Computers

 HP Inc remains the market share leader for personal computer shipments
in the United States, responsible for shipping 31 percent of total PC
shipments in the last quarter of 2016
 The installed-base share of tablets in the United States is forecast to
increase to 56 percent by 2021
 Number of U.S. tablet users is forecast to reach about 185 million by
2020 (Statista, n.d.)

14
 Figure 3 HP’s Market Share in the US from 2010 to 2016

Figure 4 The Growth of PCs, Laptop and Tablets

Office Stationery
Office stationery is a very huge segment in itself which includes very small
stationery like the pen, paper, pins, etc to huge Rolls of Paper. Office stationery
is broadly divided into 3 categories, which are:

15
 Figure 5 Office Stationery Bifurcation

Consumables are those items which are used very quickly and are generally not
reusable.

Durables are those items which are in constant use and can be re-used again and
again till there is a constant supply.

Adhesives are those items which are used to stick, paste or fix something. (Link)

Figure 6 Key Growth Indicators

16
 Figure 7 Sales value of office supply and stationery stores in the US

The product-wise demand of Stationery items are:

Figure 8 Product-wise demand of Stationery items

Impact of Technology

Paper-based products have always acquired a huge market share in Office

Stationery. But with advent of new technology i.e. electronic mode of
communication and use of electronic gadgets has made life of customers easier
and have increased the overall operating Efficiency. (Business Wire, n.d.)

Vending Machine
Vending Machines are automatic machines having portability as a feature and
offers variety of products when money is put into it. In highly profitable
workplaces these types of Vending machines have become common. And with
the advancement of technology, the demand has been constantly increasing.
Prominent factors responsible for high demand are:

17
  Augmented demand for self-service machines and automated devices
 Wireless communication
 Technology developments as well as remote management
 Growing urbanization
 Increasing disposable income
Future prospects
The US is the market leader, having a largest market share. Also there is a huge
scope of growth in the near future.
Technology has been developing at a rapid pace. With Artificial Intelligence and
augmented Realty affecting every sector, it has also impacted in a positive
manner.
Companies like IBM have made use of Radio frequencies in a very good manner
and has come up with Smart Vending Machine. It has various features like
 Front Camera to detect the consumer (used to give consumers an option
as per their tastes and needs)
 NFC technology which has helped to make payments cashless through
various electronic gadgets)
 Fit band enabled features (Marketing-interactive, n.d.)
North America Vending Machine Market is expected to witness market growth
of 14.3% CAGR during the forecast period (2017-2023)
Major Players
Key players in this segment are:
 IBM Corporation
 USA Technologies
 Aramark Corporation
 Honeywell International, Inc
Major companies segment-wise
Office Furniture
 Steelcase
 HNI Corporation
 Herman Millar
 Knoll Inc
 Kimball International

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Photocopier
 Xerox
 Canon (ADR)
 Ricoh Co. Ltd
Personal Computers and Related services
 Dell
 HP Inc.
 Apple
 Alphabet Inc.
 Microsoft
Office stationery
 Avery Dennison
 Office Depot Inc.

Vending Machine
 USA Technologies
 Aramark Corporation

Future Prospects

Office supplies sector has benefitted from technological advancement. E-

commerce sector has definitely seen a profound growth but also manufacturers
and retailers are raising the bar for their other digital capabilities. These online
platforms, Mobile-based application and social networks have helped companies
to increase their customer base and thus have helped them to improve their
overall presence in the US market and give them a competitive edge. (GEP, n.d.)

As companies start to gain market share and sees a bright future ahead, they see
diversification as a bright option in front of them. Expansion and new market
development lead to more office branches over different geographic areas. Office
supplies have a huge potential during the expansion phase. (Washington Post, n.d.)

In the US there is a rising craze for start-ups. It directly affects both commercial
Real Estate industry and also further there is a requirement of office supplies and

19
interior designing. This can be definitely an advantage for office supply industry
going forwards. Also high employment rate, also become a key factor.

Social Media is no longer the just a place used which is used to connect with
people but it has grown over the years. Altogether, it has given birth to new
functionality i.e. Digital Marketing. Companies have started using it to best of
their advantage and have been a win-win situation for both social media
companies and Office supply companies. (Business Wire, n.d.)

Constant change in technology is the key reason for continuous improvement

(Kaizen) in the way customers are being served. By integrating technologies like
IoT, Artificial Intelligence, Augmented Reality has given a competitive edge to
office suppliers. (tangram interiors, n.d.)

Office Furniture

Steelcase

Steelcase is a US-based furniture company being into existence for more than
100 years. Being into this industry for such a long duration has not only helped
them to be a market leader but also has helped them diversify their product line.
They not only produce office furniture but are also into the production of
architectural and Technological Products. They are not only inclined towards
office industries as their client but have also served education, health care and
retail industries as well.

Steelcase is a Global company having its presence in 3 geographic areas, which

are:

 Americas Segment
This segment serves customers in U.S, Canada, the Caribbean island and
Latin America.
The U.S. is one of the biggest customers for Steelcase, serving them
through 400 independent and company-owned dealer locations and also
serving directly to the end-use customer.
They have achieved a feat by having a market share of more than 12% of
Americas Segment Revenue, which no industry or vertical market could
achieve individually.

20
 In 2018, the Americas segment recorded revenue of $2,193.8, or 71.8%
of our consolidated revenue.
Majority of the workforce in the Americas is concentrated towards
manufacturing which is close to 65%.
 EMEA Segment
It serves customers from Europe, the Middle East and Africa under
Steelcase and its subdivision Coalesse.
They have their dominance in a Western part of Europe which accounts
for 85% of their revenue; rest comes from the Middle East and Africa.
This Segment contributes around 17.2% of Total Revenue earned.
 Other Category
It includes regions of Asia-Pacific, Designtex and Polyvision. The
remaining 11% revenue is generated from this category.
Revenue is generated predominantly from the office furniture industry. Demand
for office furniture depends on the following factors:

 Corporate profits
 Non-residential fixed investment
 White-collar employment
 Commercial office construction and vacancy rates

Key Stats of Steelcase

Figure 9 Office Construction Spending

21
There is a gradual growth in Office construction spending. Hence there is a
scope of more demand in future due to increased R&D spending for new
product development and a strategy of product differentiation.

Figure 10 Revenue

Figure 11 Adjusted EBITDA ($ Millions)

From the above trends we can conclude that Revenue is growing at steady pace
of 1% and EBITDA which is an important measure for valuing a company has
been growing at good 4% rate.

Figure 12 Global Furniture Market Sales

22
We can conclude from above bar chart that there is a dominance of Steelcase
over its competitors have not only been a leader in US, but was also able to
prove itself as a leader in EMEA and Asia Pacific Segment.

Steelcase is planning to launch approximately 80 new products, enhancements

and extensions in FY18.

Total Revenue (in USD Theme based Revenue (in BAF

millions) USD millions)

3055.5 3055.5 1

Table 2 Exposure of Steelcase

The company is pure play because Steelcase’s end-users are various industries
like manufacturing, financial services, insurance, IT and government. These all
are corporate offices. Other than the above stated industries, Healthcare and
education is also their end-users but the percentage is very low. Hence, the
percentage of revenue re levant to office supply theme is approximately 100%.

HNI Corporation

HNI Corporation is one of the largest office furniture manufacturers in the world
in terms of revenue generated from Office sales segment. It has 2 major
segments which are Office furniture and Hearth products. (Wikipedia, n.d.)

Office Furniture has a share of 76% of the revenue generated. Rest comes from
Hearth products. Office Furniture segment is further divided into Contract
Driven product and Supply Driven products.

Thus HNI has an edge over its competitors because it serves a wide range of
customers and has major SBUs under it. These SBUs covers both Supply Driven
and Contract Driven Channel. (HNI Corp. , 4th Quarter 2018)

23
 Figure 13 Market Coverage of Office Furniture in North America

The main drivers of Office Furniture segment are:

 Small Business Confidence
 CEO’s confidence
 Service sector Employment
 Total construction spending
Industry factors include:
 Corporate restructuring
 Technology changes
 Corporate relocations
 Health and safety concerns

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)
2175.88 1660.72 0.76
Table 3 Exposure of Steelcase

As we know that total revenue is divided into Office Furniture and Hearth
products. Revenue from office furniture is totally relevant to the theme, but the

24
hearth products are mainly for home purposes and not for office. So, home
hearth products are not relevant to this theme.

Herman Miller
Herman Miller is an American Company that produces office furniture,
equipment and home furnishings. Herman Miller’s prime business consists of
the research, design, manufacture, selling and distribution of office furniture
systems, seating products, other freestanding furniture elements, textiles, home
furnishings and related services.
The company is mainly divided into:
 North American Furniture Solutions
 ELA ("EMEA, Latin America, and Asia Pacific") Furniture Solutions
 Specialty and Consumer
North American Furniture Solutions segment includes the operations associated
with the design, manufacture and sale of furniture products for work-related
settings, including office, education and healthcare environments, throughout
the United States and Canada.

ELA Furniture Solutions segment includes EMEA, Latin America and Asia-
Pacific. ELA includes the operations associated with the design, manufacture,
and sale of furniture products, primarily for work-related settings, in these
geographic regions.

Specialty segment includes the operations associated with the design,

manufacture, and sale of high-craft furniture products and textiles including
Geiger wood products, Maharam textiles, Nemschoff and Herman Miller
Collection products

Consumer segment includes operations associated with the sale of modern

design furnishings and accessories to third party retail distributors, as well as
direct to consumer sales through e-Commerce and Design Within Reach retail
studios.

The uncategorized revenue comes under ‘Corporate’ Segment.

25
 Figure 14 Breakup of Revenue Segment-wise

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

2381.2 2381.2 1

Table 4 Exposure of Herman Miller

Each and every segment is directly or indirectly linked to furniture design,

manufacture and sale of office furniture. The bifurcation is based on the
geography and also there is difference in the quality of

We can observe that US market is the largest contributor towards generation of

sales i.e. 54%. Thus there is huge scope of growth in this highly competitive
market.
 29% of sales were from new products in fiscal 2018
 Introduced 46 new products and extensions in fiscal 2018

Knoll Inc.
Knoll Inc. is design firm that produces a wide range of products. The products
include office systems, seating, files and storage, tables and desks, textiles
(Knoll Textiles), and accessories for the office, home, and higher education
settings.
The Knoll Inc. has 3 major segments namely Office, Studio and coverings.
Office segments include all the workplace products, which includes:

26
  Systems Furniture
 Seating
 Storage
 Tables and desks
Studio segment products include iconic seating, Lounge Furniture, café and
dinner chairs, conference, training and dining tables. This segment includes
furniture of very high quality and includes different sub segments which are
serving different areas of the America and Europe.
Covering is a segment offering products with high-quality fabrics, felt, leather
and related architectural products.
Out of all 3 segments Office segment is one where maximum revenue is
generated.

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

1132.89 1132.89 1

Table 5 Exposure of Knoll Inc

Knoll Inc. has all its products that are related to office furniture. So, all revenue
is relevant to this theme, making it a pure play company.

Figure 15 Trends of Corporate profits of Knoll Inc.

Knoll is trying to implement Lean Technology by:
 Driving out waste and inefficiency
 Engaging our manufacturing associates

27
  Process and productivity improvement
 Commencement of supply chain optimization study
Kimball International Inc.
Kimball International Inc. is a US based furniture company which has its
presence in America since 1950. It has 3 furniture brands under it. They are:
Kimball, National and Kimball Hospitality.
Their core market includes the commercial, hospitality, education, government
and finance markets. (Link)

Figure 16 New Product introduction and Year on Year growth

Figure 17 Sales growth each quarter

28
The revenue breakup is done depending upon the markets in which it serves.
There are 6 vertical markets. They are

Commercial: It is largest revenue driver and offers furniture for office,

collaborative and open plan, conferencing, lobby and reception.

Education: Education is also a market for Kimball. It includes all furniture for
higher-education, vocational training or any other training institute.

Healthcare: This is crucial sector because the amount of amount invested on

furniture dictates the attractiveness of patients. Thus its customers are hospitals,
clinics, physician office and long term care units.

Hospitality: They also serve hotels, where the amount invested in furniture
dictates the rating the hotel carries. So, Kimball offers various products for guest
rooms and public spaces plus service support to the hospitality industry.

Finance: It includes all furniture related to Banking and Financial offices that
require affordable, functional and stylish environment.

Government: It offers office furniture to federal, state and local government.

Figure 18 Breakup of Revenue by Vertical Markets

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

669.9 342.1 0.51

Table 6 Kimball International Inc.

29
For this particular theme Commercial, Finance and Government Markets are apt
because all 3 markets have offices and thus related furniture supplies would be
apt for this theme.

Photocopier
Xerox Corporation
Xerox Corp. is a highly recognised company in the US, carrying the pride of
inventing the first photocopier through a process of Xerography. With years of
innovation and R&D works, Xerox has been successfully selling print and
digital document solutions and document technology products to more than 160
countries.
Xerox in 2016 has separated its business process service operations into a new
publicly traded company, Conduent. Currently, it has only one operating and
reportable segment i.e. Design, Development and sale of print technology and
related solutions.
Xerox has its major presence in the US where it earns 60% of its revenue. It is
followed by Europe, where it generates approximately 30% of its revenue.

Xerox now focuses on increasing its small and mid-sized coverage through re-
sellers and partners and continued distribution acquisitions.

Xerox has acquired MT Business Technologies Inc., which provides office

equipment, productivity solutions and managed print services. This gives Xerox
an opportunity to expand its business and also has helped in diversification.
(Link)

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

10265 10265 1

Table 7 Exposure of Xerox

Canon
Canon is a Japanese MNC, which is known for manufacturing imaging and
optical products, including cameras, camcorders, photocopiers, Steppers,
printers and medical equipment. Being an MNC it is listed on New York Stock

30
Exchange. The US plays an important role when it comes to revenue generation.
27.1% of revenue is generated in the Americas.

Figure 19 Composition of Sales by Region

The office equipment sub-segment is doing well because of the reinforcement of
their sales network by developing a system that can better support and manage
approximately 400 of their dealers across the Americas. Canon has also helped
professional photographers in Hollywood by offering "Next Day" repair
services. This is some unique service provided by Canon which is the first
initiative of its kind in the industry.
Canon is basically divided in 4 segments, which are:
 Office
 Imaging System
 Medical System
 Industry and Other
46% of revenue is generated from the sale of high-image quality output to meet
the standards and needs of offices in the US. The devices included
Multifunctional devices, Laser printer and Commercial-use printer

Figure 20 Sales Composition of Office Supplies

Sales Composition of Office Supplies (Link)

31
 Figure 21 Sales Segmentation

Americas and China are to major consumers of office equipment. There is more
and more scope of generating revenue from the US, seeing the pace at which
technology is improving, thus increasing the demand.
Total Revenue (in Yen Theme based Revenue (in Yen BAF
million) million)

4080015 3002116 0.735

Table 8 Exposure of Canon

Office Business Unit and Imaging system business unit are relevant to this
theme. It includes all different types of printers, Scanners, Camcorder and multi-
functional printers. Remaining segments are Medical system Business unit and
Industry and other Business unit which are not related to office supply hence
both the segments are excludes from calculation.
Ricoh Co. Ltd

32
Ricoh Co. Ltd is Japanese Multinational imaging and Electronics Company.
Ricoh is a huge company with nearly 1 Lakh employees and have grown this far
through major acquisitions and diversifying the product line.
Ricoh produces electronic products, primarily cameras and office equipment
such as printers, photocopier, fax machines and offers Software as a Service
(SaaS).
Major business segments of Ricoh are:
 Office Printing
 Office Service
 Commercial Printing
 Industrial printing
 Thermal Media
 Others
Ricoh has its major presence in Japan but it has earned comparable revenues
from America and Europe also.
When business segment is analysed product-wise we can conclude that Office
related printing equipment and office services provided is approximately three-
fourth of Total Revenue.
Ricoh offers various office equipment like Multi-Functional Printers, Printers,
Interactive White board, Projectors, Video and Web conference systems etc.
It also offers various solutions which range from supplying software and
consumables through constructing and supporting information technology
environments to managing networks and providing user support. (Link)

Figure 22 Product-wise Sales Contribution

33
 Total Revenue (in Yen Theme based Revenue (in Yen BAF
million) million)

2063363 611724 0.86

Figure 23 Exposure of RIcoh

The Theme based Revenue consists of Office printing, Office services and
Commercial printing. Industrial printing consists of big printing machines which
are suitable for industrial use and not for office use hence this segment was
excluded. Again, thermal media is also a part of industrial product hence the
segment is also excluded.

Figure 24 Geography-wise Sales contribution

34
Personal Computers and Related services
Dell
Dell is an American MNC which manufactures and sells computer and
computer-related products. It also provides after sales services.
The products sold are Personal computers, servers and data storage devices,
software, computer peripherals, HDTVs, cameras, printers, MP3 players and
many other electronic items.
The company Dell was primarily known for its hardware manufacturing unit.
With time Dell tried to enter into IT services. Gradually it started growing more
and more through various acquisitions and now, Dell is not just recognised just
as a firm offering only computers, but delivers complete solution for enterprise
customers.
Dell is primarily divided into 3 segments:
 Client Solutions Group
 Infrastructure Solutions Group
 VMware
Client Solution Group (CSG) includes sale of desktops, Laptops and third-party
software and hardware related to sales of CSG Hardware.
Infrastructure Solutions Group (ISG) includes servers, storage and networking
as well as services related to ISG.
VMware includes a broad portfolio of virtualization technologies across three
main product groups: software-defined data center; hybrid cloud computing; and
end-user computing.
Threat to Desktop Computers
The usage of Desktop computers is rightly predicted to decrease over years.
With advent of every new technology there is definitely a threat to an existing
technology. This effect of cannibalism is also true for Desktop Computers. With
new technology of portability has made life easy for humans. We can still see its
use for Office purpose but the growth has become stagnant. This has led to
increase in sale of Notebooks which are handy to use and more efficient.

35
 Figure 25 Trend followed by Desktop Computers
US are the biggest market for Dell where they have consistently earned their
50% of revenues of Total Revenues.

Figure 26 Breakup of Net Revenue of 2018

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

78660 78032 0.99

Table 9 Exposure of Dell

All 3 segments are very much relevant. They are either selling of personal
computers or related accessories. It also includes providing after sales services.
Hence almost 99.2% of revenue is significant and rest comes from unclassified
segment.
Hewlett Packard (HP)
HP is a US based firm which develops Personal Computers (PC), printers and
related supplies. HP is ranked no.1 into its industry when we talk about number

36
of units sold. It has moved fast with technology and now provides 3D printing
solutions.
In 2015, a major corporate restructuring took place. Hewlett Packard (HP) had
split its PC and Printer business from its enterprise product and services
business, resulting into two publicly listed companies HP Inc. and Hewlett
Packard Enterprise.
HP Inc. has three reportable segments which are divided according to the
products and services it supplies. They are:
 Personal Systems
 Printing
 Corporate Investments
Personal System offers wide range of products starting from PCs (Commercial,
Consumer and Notebook), PC related accessories and retail POS system
Printing segment includes Office printing solutions, Home printing Solutions,
Graphics Solution and 3-D printing.
Corporate Investment includes HP Labs and certain business incubation
projects.
Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

58,471 48064 0.82

Table 10 Exposure of Hewlett Packard

All 3 major segments of HP are more or less related to the theme. But in printing
solution, there are various products and services which like home printing
solutions which cannot be a part of this theme and needs to be excluded from
calculation. So, while calculating theme based revenue only 50% of printing
segment revenue is considered. And also corporate investment segment is also
excluded from calculation.

37
 Figure 27 Y/Y revenue Growth %

Figure 28 Net Revenue by Key Segment and Business Unit

38
 Figure 29 Net Revenue by Regions

Figure 30 Revenue breakdown for Personal Systems

Apple
Apple in a US based Technology Company who designs, develops and sells
Consumer electronics, Computer Software and online services.

39
Apple sells various products like the iPhone (Smartphone), the iPad (Tablet), the
Mac (Personal Computer), the iPod (Media Player) and many more consumer
durables.

Figure 31 Net Sales breakup by product sold

Net Sales breakup by product sold

Figure 32 Net Sales by Geographic Region

U.S. as a country is the highest contributor to Net Sales. China and U.S. are the
only countries who have their net sales contribution of 10% and above.
Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

265595 72077 0.27

Table 11 Exposure of Apple

Segment that is a major driver of revenue is IPhone. But its motive for sale is
not for office use; hence it is excluded from calculation. IPad was also
introduced to meet individual requirements but nowadays the sale of IPad has
grown significantly, so 50% of segment is relevant to this theme. Mac and
services are very much apt for this particular theme. Other products include Air
pods, Air TV, Apple watches etc. Hence this other product category is not apt
for office supplies.

40
Alphabet Inc.
Alphabet Inc. is an American MNC and a parent company of Google.
Alphabet’s portfolio encompasses various industries, which includes
Technology, Life Sciences, Investment Capital and Research.
Alphabet Inc. is primarily divided into 2 segments based on products and
services. The reported segments are:
 Google: It includes all the main products such as Ads, Android, Chrome,
Google Cloud, Hardware and YouTube.
 Other Bets: It is a combination of multiple segments which are not
individually material.
99% of Revenue is generated from Google. The highest revenue earned by
Alphabet Inc. is through advertisements.

Figure 33 Contribution to Net Sales (Geography-wise)

U.S. is the largest contributor towards Net Sales.

There are various offices that totally rely on advertisements as a source of
marketing their products, HR uses it for recruiting an employee and thus it is
highly cost efficient way of increasing the profits of any company.
In context to Personal Computers (PC), the software used and the service
provided is very much handy to use. The service like cloud computing, google
drive, Google Chrome and Gmail are used on day to day basis. Employees are
so much inclined to these services that it is very difficult to imagine a life
without Google.
Total Revenue (in Theme based Revenue (in USD BAF
USD millions) millions)

74,989 74,544 0.99

41
 Table 12 Exposure of Alphabet

Google earns its majority of revenues from advertisement and nowadays

maximum companies use advertisements for multiple purposes which are the
recruitment process, sale of their product, to know customer needs etc. Thus,
corporates being heavily dependent on advertising and google has helped them
to a large extent. Also there are various other facilities that are provided, such as
google drive, YouTube, Chrome. Hence the whole google segment is very much
relevant. Other Bets is a segment which is a combination of multiple segments
which is not so big to be classified individually. Thus other bet is not relevant as
it includes services like sales of internet and TV services through fibre.
Microsoft
Microsoft is a U.S. based MNC. It develops, manufactures, licences, supports
and sells Computer software, Consumer Electronics, Personal Computers, and
related services. It is widely known for its software products like Microsoft
Windows and Microsoft Office suite. When it comes to hardware products,
Microsoft Surface is most popular Touchscreen Personal Computer. Microsoft is
World’s largest software maker by revenue.
Future Opportunities for Microsoft are:
 Transforming the workplace by delivering new modern, modular
business applications to improve how people work, communicate and
interact with each other.
 Most of the application and software using cloud-based services and
hence there is a bright future ahead.
 AI is an upcoming technology has impacted every industry either
positively or negatively. Hence, AI will help understand customers’
insights by recognizing their need and demand. This type of automation
will certainly help a lot to other industry. This can help companies’
improve their customer care services and can produce right product at
right time, according to customer’s likes and dislikes.
The whole business is primarily divided into 3 reported segments. These are:
 Productivity and Business Processes
This segment consists of all Office Commercials, which includes Office
365 subscriptions and office licenced on premises.

42
  Intelligent Cloud
This segment consists of public, private and hybrid server products and
cloud services that can power modern business
 More Personal Computing
This segment includes all those products and services geared towards
harmonizing the interest of end users, developers and IT professionals.
The products are mainly computing related hardware products. Products
are PCs and its accessories, Xbox gaming hardware as well as software.
(Link)

Figure 34 Revenue breakup by products and services offered

When seeing Geography-wise breakup U.S. is the country contributing 50% of

the total revenue. Rest no country has individually contributed more than 10%
of Total Revenue.

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

110,360 110,360 1

Table 13 Exposure of Microsoft

Productivity and Business Processes is related to office services that are needed
in day to day working, thus the revenue from whole segment is very much
relevant to Office theme.

Intelligent Cloud is all about providing cloud services, so that it can power the
modern businesses. So this segment is also very much relevant to Office theme.

43
More Personal Computing services include all Windows related sale and also
revenues earned from licencing. It also includes sale of various devices such as
PCs and other related accessories. So this segment is also relevant to this theme.

44
Office Stationery

Avery Dennison

Avery Dennison is a global manufacturer and distributor of pressure-sensitive

adhesive materials, apparel branding labels and tags, RFID inlays, and specialty
medical products. Avery Dennison is a company formed when Avery
International Corporation and Dennison Manufacturing Company merged in
1990.

The company has 3 reportable segments. They are:

 Labels and Graphic Materials (LGM)

Manufactures and sells pressure-sensitive labelling technology and
materials and films for graphic and reflective applications
 Retail Branding and Information solutions (RBIS)
Designs, manufactures and sells a wide variety of branding and
information products and services, including brand and price tickets, tags
and labels (including RFID inlays), and related services, supplies and
equipment
 Industrial and Healthcare Materials (IHM)
Manufactures performance tapes, fastener solutions, and an array of
pressure-sensitive adhesive products for various medical applications.

Figure 35 Segment-wise breakup of Total Revenue

45
 Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

6614 6023 0.91

Table 14 Exposure of Avery Dennison

Label and Graphic segment includes self-adhesive materials, pressure sensitive

label and packaging materials. So this segment is relevant to office supplies.

Retail Branding and Information Solutions (RBIS) sell a wide variety of

products like graphic tickets, tags, labels and sustainable packaging. Thus this
segment is relevant to the theme.

Industrial and Healthcare Material segment is irrelevant to this theme because

the products are related to Industry and Healthcare.

Office Depot
Office Depot is an American office supply company. It provides a broad
selection of products and services to consumers and businesses of all sizes. The
company operates 1,400 retail stores, e-commerce sites and a business-to-
business sales organization.
Office Depot operates through three reportable segments. They are:
 Retail Division
It offer office supplies, technology products and solutions, business
machines and related supplies, print, cleaning, breakroom and facilities
products, and office furniture
 Business Solutions Division
It sells nationally branded and private branded products and services to
customers (In United States, Puerto Rico, U.S. Virgin Islands, and
Canada). There are multiple modes of Sales channels. They are
Dedicated Sales Force, catalogues, telesales, and through various internet
sites.
 CompuCom Division
It was newly started segment, which was formed in 2017 after
acquisition of CompuCom. CompuCom procures, installs and manages
the lifecycle of hardware and software for businesses, and offers IT

46
 support services including remote help desk, data centers and on-site IT
professionals

Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

10,240 10226 ~1

Table 15 Exposure of Office Depot

Retail Division segment is relevant to this theme because it mainly involved in

sale of office related product or service. The sale of products is through retail
stores.

Business Solution Division is similar to the Retail Division segment but the
channels of product distribution differ. Instead of Distribution through retail
stores, Business Solution serves through dedicated sales forces, catalogues,
telesales, and electronically through its internet sites.

CompuCom Division is and extended service that helps customers resolve their
IT related problems and it is also helps to improve overall efficiency of whole
company. So this segment is relevant to Office supply theme.

Figure 36 Overview of CompuCom’s Performance

47
After acquisition of CompuCom it has impacted Office Depot in a positive
manner. It has helped Office Depot improve its Technological Services
Capabilities. It has helped office supplies’ capabilities to reach 100%. Office
Depot has also diversified its product and service lines through acquiring
CompuCom.

Office Depot has gained a lot from Omni-channel marketing. It has helped them
to cover 98.5% U.S. population. Also, it has helped them connect with their
customers very well. This has decreased their Delivery time and as a result they
have started same day delivery.

Figure 37 Omni-channels of Office Depot

48
Figure 38 Impact on Office depots’ Capability by acquiring CompuCom

49
Vending Machine
USA Technologies
USA technologies, is an American Company, who are provider of technology-
enabled solutions and value-added services. They facilitate electronic payment
transactions primarily within unattended Point of Sale (POS) market. They are
also leading providers of small ticket, beverage and food vending machines.
Looking at the past, Machines have highly relied on cash based transactions in
forms of coins or bills, but USA Technologies have started manufacturing
Assets that allow acceptance of cashless payments. Cashless payment can be
through credit cards or debit cards or through other contactless forms of
payments like mobile payments.
Majority of their revenues are derived from Licencing and transaction fees.
Their customers range from global food service organizations to small
businesses that operate primarily in the self-serve, beverage and food vending,
various self-serve kiosk, etc.

Figure 39 Trends of revenue growth and segment breakup

In Jan 2016, USA Technologies has acquired Vend Screen Inc., a cloud based
content delivery platform, device platform and products, customer base, and
intellectual property. This has helped USA technologies provide greater
efficiencies in operational performance, expanded customer services, sales and
technical support. It has also helped them add a vending application that
provides enhanced Vending Management System (VMS) integration to their
existing technology. This has been beneficial to such an extent that the

50
technology is NFC enabled and compatible with mobile wallets and can get a
real time feedback from the customers.
Factors affecting the business in positive manner:
 Ongoing shift toward electronic payment transactions and away from
cash and checks
 Increasing demand for electronic transaction functionality from both
consumers and merchant/operators
 Improving POS technology and NFC equipped mobile phone payment
technology.
Total Revenue (in USD Theme based Revenue (in USD BAF
millions) millions)

104093 104093 1

Table 16 Exposure of USA Technologies

There are 2 segments from where revenues are derived. One is Licence and
transaction fee and second is equipment sales.

Licence and transaction fee segment is very much apt to this segment because it
is revenue generated from sale licences of POS machine, vending machine and
other related devices.

Equipment sales segment is also relevant to this theme as it deals with sale of
vending machine and related equipment.

Aramark Corporations
It is a global provider of food, facilities and uniform services to education,
healthcare, business & industry and sports, leisure & corrections clients. They
have their core services in the U.S., but have decided to serve worldwide and
they hold 3rd position world-wide.
The business is basically spread across 3 reportable segments which are:
 Food and Support Services United States ("FSS United States")
 Food and Support Services International ("FSS International")
 Uniform and Career Apparel ("Uniform")
They provide a range of business dining services, including on-site restaurant,
catering, convenience stores and executive dining.

51
They also provide beverage and vending services to various businesses.

Figure 40 Industry Leader in terms of Shareholder returns since IPO

Figure 41 Breakup of Business Segments

When we break revenue geography-wise, the US contributes 75% of revenue of

Total revenue.

52
 Chapter 5
5.1 Conclusions
The portfolio was built on Office Supply and selecting this theme was really
fruitful for investment because the rate at which the startups are growing in
US is really very fast as well as the industry has also expanded over last one
decade. The demand has been rising and also need for better office furniture
and need for interiors is also rising at very rapid pace.

With advent of new technology and with growing demand to integrate those
technology with existing products has created a challenge for the
manufacturer at the same time created an opportunity for expansion of
business.

Furniture companies have been analysing different health issues and then
accordingly devising their products to serve their clients in a better way.

With increasing technology mainly for payments and increase in use of

smart wearable have opened a door for Vending Machine manufacturers
and they have been coming up with various new products wherein the life at
workplace becomes very easy.

Hence seeing high opportunities in future this particular theme is worth

investing in and would definitely give high returns to investors and also
would be one of the safest theme to invest in.

53
5.2 Recommendations
There has been around 15000 different theme based unique portfolio already
developed and many are very profit making as of today. Few may continue
to give similar returns and few may not be in demand.

I recommend this portfolio on office supply as one of the most demanded

portfolio to invest in. After the secondary research carried out it seems that
future is bright for investors and there are many more companies who are
trying grow as an organization and would definitely give better returns to
their investors.

54
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https://www.washingtonpost.com/business/economy/what-your-office-supply-
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12. Retrieved from tangram interiors: https://tangraminteriors.com/future-of-work-

trends-from-steelcase/

13. Retrieved from Wikipedia: https://en.wikipedia.org/wiki/HNI_Corporation

14. (4th Quarter 2018). HNI Corp. .

15. Steelcase. (2018. Annual Report.

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