Strategic Management

Select an appropriate generic strategy to position your printing business unit in its competitive environment (map the environment primarily as a pattern of pressures from rivals, suppliers, buyers, entrants and substitutes).

Answer:

Printing is one of the few industries that have defied inflationary pressure over the years. It is obvious from the above that no matter the size of the press, one can make it real big if they are professionally advised and properly guided during the conception and establishment period, employ the right personnel and engage in aggressive marketing and careful monitoring of the various aspects of the operations. The actual cost of setting up each will be determined when the investor has decided the scope of operations and the type of press he wants to establish. 

Patronage for printing press services comes from individuals, corporate organisations, government agencies, politicians, big advertising houses, the various political parties, churches, mosques, institutions and parastatals of sorts. Others are advertising and public relations agencies and large organisations that do not have their internal advertisement and public relations departments. Not excluded are modeling agencies, educational institutions, authors, publishers, NGOs, international development agencies, events organisers, publicly quoted companies that must print and distribute their annual reports and accounts annually, etc. Fellow small printers who do not have adequate personnel and equipment to meet their needs and the big ones who are unable to meet their various customers’ tight delivery schedules are forced to contract out some of their jobs to the presses that can handle these urgent jobs.

Strategy Positioning:

To understand the phrase strategic position, one must understand strategies. Strategies are the policies that guide decisions. They relate to the nature, direction and basic purpose of an organization (or an individual). They have a lot to do with that organization's mission and vision. They are not always explicit, but strategies can usually be deduced by the actions of a person or organization. Positioning is closely related to this deductive process because it is the result in the mind of the customer, or key stakeholder, of how well an organization's strategies align with theirs. If actions (and strategies) communicate that an organization is vital to a customer's interests and strategies, then the organization is well positioned for survival.

Businesses need a strategic planning process designed to suit their particular needs. It should be relatively short, be informal and not structured, encourage the participation of employees, and not begin with extensive objective setting. Linking the purposeful action of strategic planning to an entrepreneur’s ideas can produce results that shape the future.

Step 1 Develop a clear vision and translate it into a meaningful mission statement. Highly successful entrepreneurs are able to communicate their vision to those around them. The firm’s mission statement answers the first question of any venture: What business am I in? The mission statement sets the tone for the entire company.

Step 2 Assess the company’s strengths and weaknesses. Strengths are positive internal factors; weaknesses are negative internal factors.

Step 3 Scan the environment for significant opportunities and threats facing the business. Opportunities are positive external options; threats are negative external forces.

Step 4 Identify the key factors for success in the business. In every business, key factors that determine the success of the firms in it, and so they must be an integral part of a company’s strategy. Key success factors are relationships between a controllable variable and a critical factor influencing the firm’s ability to compete in the market.

Step 5 Analyze the competition. Business owners should know their competitors’ business almost as well as they know their own business. A competitive profile matrix is a helpful tool for analyzing competitors’ strengths and weaknesses.

Step 6 Create company goals and objectives. Goals are the broad, long-range attributes that the firm seeks to accomplish. Objectives are quantifiable and more precise; they should be specific, measurable, assignable, realistic, timely, and written down. The process works best when managers and employees are actively involved.

Step 7 Formulate strategic options and select the appropriate strategies. A strategy is the game plan the firm plans to use to achieve its objectives and mission. It must center on establishing for the firm the key success factors identified earlier.

Step 8 Translate strategic plans into action plans. No strategic plan is complete until the owner puts it into action.

Step 9 Establish accurate controls. Actual performance rarely, if ever, matches plans exactly. Operating data from the business assembled into a comprehensive scorecard serve as an important guidepost for determining how effective a company’s strategy is. This information is especially helpful when plotting future strategies.

The strategic planning process does not end with these nine steps; rather, it is an ongoing process that an entrepreneur will repeat.

Establishing Printing press business:

There is a huge untapped business opportunity in setting up a printing press. Establishing one is good and profitable business any day. The average printing press has a life span of not less than 20 years. Profit wise, it is quickly self-liquidating and has low maintenance cost. It yields steady huge returns over its lifetime. For this reason, we shall look at the three departments, which a standard conventional press may have.

These are

 (1) pre-press,

 (2) letter press, and

 (3) finishing.

According to the U.S. Bureau of Labor Statistics, most printing business enterprises employ fewer than 10 people. As more printing business owners utilize digital printing equipment, fewer skilled technicians will be needed to operate this machinery. Modern digital printing equipment is smaller and more affordable than ever before and practically anyone with capital can purchase and operate digital printing equipment, even from a home office.

The four biggest strategies that is to be fulfilled while starting a printing business.

1. The Units of Printing Equipment - The printing equipment would be the heart of the operations because that is where the output products are processed. In the past, the most that could be get is a four-color offset printer. Now, one can opt for digital presses. While the latter are newer units, their prices do not vary that much with offset printers. The advantage with digital  is that it  can receive online orders and process the orders much faster. Printing press can get printers for as low as $14,000 for a small unit with not much features. Such can already get the business going. The big machines used by publishing houses can cost more than $1 million.

2. The Office Space and Production Area – It will need a front office for the printing company because the production area should be separate. It could be found in the same building but should have a separator because the process should be confidential, especially the materials. Additionally, that will keep the customers from being annoyed with the smell of paper and ink. Since printers are large units, they can eat up a lot of space in the production area. So really have to compute the number of printing equipment one already have, including cutters and storage ages, as well as the workstation of the finishing department.

3. The Initial Operating Costs – It is required to set aside about six months-worth of operational costs for the initial operations. This money should be liquid because of course; one cannot expect new business to be swamped with orders. Additionally, there are clients who will be asking for payment terms so that means one will not have cash immediately. Some companies will be asking for a 30-day, 60-day or 90-day term for their jobs. To augment costs, one can request for a 50% down payment from the clients upon ordering so that the amount that will fall under terms will just be half of the total printing job cost.

4. The Marketing Expense - Many printers fail in this area but one should really advertise and market print shop, especially if new. If one do not set aside a budget for this, this aspect will surely be neglected. Let the people know that a commercial printing shop have been opened that could cater to their needs. No matter how good a commercial printer is, it is required to invest in marketing so that clients will start coming in.

Strategies mapping the environment primarily as a pattern of pressures from rivals, suppliers, buyers, entrants and substitutes:

Further the printing industry has been tremendously changed in the past 3 decades and will see even more changes in the years ahead. Digital printing, large-format digital printing, offset printing are a few examples of advances since the 1980s. Although the technology has changed and the competition is fierce, some aspects of the printing business remain unchanged such as customer service, the demand for quality, adhering to the particular ethics and laws regulating putting ink on paper.

Moreover printing firms have made efforts to acquire more established clients in the market so that they are in position to show that they have attained substantial competency to encounter different environmental and abrupt changes. And they will not further hesitate to handle state jobs as they are often helpful to companies to lead the market in comprehensive manner. Under these circumstances, for ensuring the existence in the industry and enhancing the market share, printing firms are mostly well alert in the process of offering the requirements at the time customer expects.

Last but not the least; Firms’ newly focused project is to implement web based marketing. They are establishing new web site for the purpose of increasing the number of new clients towards the firm while giving more convenient service for their retained clients. This can be simply identified as one of the timely needed marketing strategies for remaining the segmented consumers in their belt at more dynamic competitive business world.

1) Find a niche within the printing industry. 

The most successful printing entrepreneurs start a printing business by finding a niche in a specialized area, such as digital printing. Instead of trying to be all things to all people, success is more attainable by targeting a need and fulfilling it.

            One of the best examples of this strategy can be seen by the success of franchise sign printing businesses, which target budget-minded business owners who only need occasional signs and banners, which can be spotty (inconsistent demand) or loaded with competition. They do not attempt to offer anything but quick-turnaround signs and leave brochures and envelope printing to traditional offset printing businesses.

2) Realize that the niche for color printing and the better quality grade of printing may be in a certain number of dots per inch (DPI), very demanding and tricky to match.

     "Caution": Any verbal or written agreement like "You [the printer] know what looks right, so you can okay the proofs for color and quality." is loaded with danger of customer rejecting the finished product. For example, they may require:

• Product match, may be excellent quality -- very precise color, hue and tone for high end products.
• Color match, excellent quality -- usually precise Process Matching System (PMS Colors) by screen values (tones created by dot sizes) of the 4 process colors (cyan, magenta, process yellow and black).
• Or just "pleasing color", of medium quality -- is not so precisely matched. "Caution": that means pleasing to the customer not to the printing owner.
• Commercial quality printing is probably a cut above desktop publishing, done in the office (above typical office printer, copier or duplicator quality). It requires sharp line art and text -- fineness of line work does not vary from page to page, screen color or halftone detail is consistent.
• Any choice of printing process (or brand of paper) shown on a quote to the customer is for them to choose. One cannot substitute a more profitable method or material. Unless they agree in writing to a change, they can demand that it be redone at the expense -- if else do not follow written specifications precisely.

3) Research the competition and their equipment. 

After finding out what the target market is, research the printing businesses who are currently attempting to fulfill the needs of this audience. Visit these printing businesses' websites and learn all about them to find out what services they are lacking. Draft plans to start the printing business by researching ways to offer those, possibly, badly-needed services and improve upon printing businesses within the niche.

4) Research and determine the best -- and still affordable -- equipment for the niche. 

The wrong equipment is a killer in every way.

5) Turn printed items into products by creating a menu of what it offers. 

When it comes to printing, most business owners don't know exactly what they need. A food manufacturer might think they need a traditional vinyl banner for an event but they don't understand the pitfalls of using it in various scenarios. What they really need is a portable tabletop sign that can be utilized at events, sales meetings and other public awareness activities. The more customers understand what a product can do, the happier they will be with the finished product.

6) Offer value-added services that enhance the finished pieces within the niche, such as brochure holders. 

For example, printed brochures need something that can display them properly. If one is able to sell brochure holders along with the print job, the customer just might thank for saving them the effort of looking for a display by purchasing one.

7) Research and obtain any licenses, certification and permits (i.e.: sales tax permit), safety equipment, and such that one will need for specific operating location. Even on starting a home-based printing business, one will likely need some

kind of permit or license from the state and local government. Call or meet with the local economic development agency to find out where to go next.

•           Meeting Occupational Safety and Health Act (OSHA) requirements including their and other agencies "postings" are concerns.

•           Withholding, reporting and paying taxes and social security quarterly for employees (including part-time) is necessary. Not so if the only use independent, outside printing contractors to do occasional printing that one cannot do personally, and then would be a "printing broker" (non-affiliated, wholesaler).

•           Quarterly estimates of income, reporting of actual proceeds and paying the personal proprietorship (or limited liability corporation [LLC]) for taxes and social security for oneself is the responsibility to learn and do.

8) Secure funding.

Starting a new printing business will take several thousand dollars in capital. If one cannot finance this equipment on his own, contact the chamber of commerce to learn who can help to apply for a small business loan.

            After becoming established and having enough credit and show volume and potential one might be able to lease equipment, which can bring flexibility, but leases may have penalties and balloon notes, etc. to return or to keep the item, respectively.

9) Promote the new print shop.

After starting printing business, there comes the need to get the word out to bring in sales. Join local chamber of commerce, sponsor community events and advertise in the local newspaper. Promoting business can be done online by building an effective website, participating in industry forum discussions and taking steps to distinguish from local and worldwide competition.

 Market and advertise the printing business to customers by mailing or handing out marketing aids, placing ads in local newspapers or exhibiting at community events.

SWOT Analysis:

Strengths

Ø  Existing customer base

Ø  Relationships

Ø  Infrastructure

Ø  Ongoing need for print

Ø  Direct marketing expertise

Ø  Brand recognition

Weaknesses

Ø  Outdated technology

Ø  Outdated selling practices

Ø  Lack of relationships with marketing section

Ø  Legacy costs

Ø  Legacy personnel

Opportunities

Ø  Increasing marketing budget

Ø  Technologies like PURLs keep print relevant

Ø  Increasing interest in cross-media marketing

Ø  New technology make direct marketing more cost-effective

Ø  New production technology drives down costs

Ø  Web-ordering opens up new sales opportunities

Threats

Ø  Green movement

Ø  More marketing moving online

Ø  Shrinking print industry

Ø  Rising postage and material costs

Ø  Web-2-print services increase competition

Conclusion:

Most suppliers will try and compete in a number of ways in addition to price, for example by developing new 'improved' products, by offering products of differing quality or characteristics, by branding and advertising the differences in their products relative to their competitors', or by using different sales channels. Successful suppliers will seek to find a unique selling point by which their product stands out from that of their rivals'.