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than one hat
Falling margins are driving a
diversification boom. An
increasing number of printers
are concluding that they need
to wear many hats if they're
to survive in a challenging market.
The logical step is to identify a major
customer's ancillary needs and develop
a business around those. For example,
print companies providing booklets might
discover that clients are looking elsewhere
for diecuts and POS material.
But the really clever thinking comes
from identifying your customers' not-so-
obvious requirements. For that, you need
to really understand their business and
their objectives. What does their ad
agency say? Are they planning a
multimedia pitch? Perhaps there's an
opening to provide electronic content.
Of course, you need to identify your
strengths and capabilities. Do you have
the capital and human resources to leap
the gate? What's the cost of machinery,
training, perhaps additional floorspace?
You absolutely must conduct a cost-benefit
analysis and bring your accountant in on
major purchases. And your techies need
to do due diligence on your kit options.
But even before that, you need to ask
some fundamental questions. Do you
have a sufficiently wide and stable
customer base for those new services,
or would one or two clients' change of
course -- or defection to a rival printer --
sink your diversification? How 'crowded'
is this sector already? Will you have
enough elbow room to offer quality at
sustainable prices, or is this corner of
the playground already affected by
commoditisation and downward price
pressures? Remember, you're trying to
escape the margin crush, so don't leap
from the frying pan into new fires.
Stephen Ball, industry marketing
manager, graphic communications,
In a tough market, adding extra
new strings to your company's bow
is essential. While it could pay off
brilliantly, overreaching is a risk
By Peter Kohn
at Fuji Xerox Australia, cites two examples
of companies that have diversified using
Digital Logic, a Melbourne-based
provider of cross-channel marketing,
began as a pre-press bureau in 1990. It
took on cross-media marketing in 2002
and now uses XMPie personalisation
software to integrate data with multiple
marketing channels. For output, it uses
two iGen3s and a Color 1000.
Also in Melbourne, Direct Mail &
Marketing, which had its origins in trade
web offset, uses XMPie and its in-house
Integrated Direct Ma rketing (DMMI)
software for cross-media marketing,
alongside two Color 1000s, two
DocuColor 5000 APs, a Color J75 and
"Without a considered, well-structured
business plan, no printing business will
be able to achieve its expansion goals and
mitigate risks such as client loss, investing
in the wrong capital equipment and
resources, or ultimately, business failure,"
That said, don't let caution unduly
impede your spirit of entrepreneurship.
There are plenty of inspirational
expansion stories in Australian printing.
The cyber upsell
At Print Storm, a digital print business
at Gulgong, east of Dubbo, New South
Wales, it's been all about diversification.
Managing director Paul Cavalier is
well known locally as a station
commander with Fire & Rescue NSW
(he was recognised as its youngest-ever
captain). Last year, he was elected as
a local councillor.
Cavalier had an early fascination with
graphics. At 12, he developed a budding
web design business and in later years
established an ink supply venture that
taught him the industry. He founded
Print Storm seven years ago with his
father, Henry, a mining industry
engineer, as co-partner and director.
While Print Storm provides essential
printing services in the district,
Cavalier believed there was potential
for lots more. Around two years ago, he
got the ball rolling in a compelling way
-- he asked his customers.
"We began finding that a number
of our customers who use our design
and print services were often asking us
where they could have their websites
developed. A few of our staff had prior
experience in this area, and it seemed
only logical to begin offering this as
a service to complement our graphic
design and printing services," Cavalier
"The demand for this type of service
was particularly high, and our capability
to provide the service was there. For us,
web development was a no-brainer.
A surge in demand for web development
services made it difficult at times to keep
up with the work. But we built a good
network of freelance developers and
designers we can call on in the event
we simply can't keep up.
"Some additional software and
IT infrastructure was needed, but
in terms of the overall project,
there was very little work
involved in the diversification,"
he says. Nor was there any
retraining. "We simply hired
additional staff that
specialised in this field."
Word of mouth spread
widely, as did Print
Storm's reputation for
quality and reliability.
And some sweeteners.
"We also offer clients
incentives for using
our web and print
services, such as
Two years on,
ROI on the
expansion as "high".
"There are very few
competitors. It's easy
for clients to use us for
all of their marketing-
It was logical to offer web development
to complement our printing services
Paul Cavalier, Print Storm
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