Whenever anyone talks about the print industry, it’s rare that the issues of overcapacity and commodity-based pricing fail to crop up, so it’s hardly surprising that more and more companies are looking at ways to add strings to their bows.
Of course, investing in new skills and technology is probably still off the agenda for many, being deemed too risky in the current climate. However, as highlighted in our feature on the subject, strategic alliances offer a far lower risk and perhaps even greater rewards – certainly in the short term.
The instances of printers broadening their horizons may not be exactly commonplace right now, but their popularity seems to be increasing among printers and, perhaps to an even greater extent, by suppliers – Manroland/Océ being a recent example.
Repro house F1 Colour’s tie-up with cross-media and web development specialist St8us this week is another and it highlights the benefit of expanding your product offering in the face of declining margins in a commodity market, which also happens to be your core business.
There’s no doubt F1 isn’t alone in looking at ways it can diversify its business through a partnership to not only protect margins generally, but perhaps even grow them in areas that they appeared to be in terminal decline.
Sounds unlikely? Well, possibly not. Last year, the director of a leading (unnamed for obvious reasons) printer related with glee a story about how his company moved from being a litho-only operation to digitally focused for the same reasons cited above, only to find several years later that the ‘non-core’ litho work was the most profitable part of the company. As the firm won business though its digital prowess, clients placed litho work almost as an aside, paying scant regard to quotes that under normal circumstances they probably would have baulked at and shopped around for a lower price.
Paraphrasing F1 managing director Ken Harrison’s eloquent words: If the only way to win new clients is by being the cheapest, then there’s no future in that.
Damn right.
Darryl Danielli is editor of PrintWeek
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"Utilities, paper and ink but probably not transport, couriers, finisher’s for example"
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