Strategic Choices in a Competitive and Converging Market: Our 3rd Spotlight Report
Over the past few years, printers and suppliers have created major new products and services to adapt to the ever-changing print markets. For the drupa’s 3rd Spotlight Report, experts of our industry have come together to report on their efforts and share their experiences, stumbling blocks and successes.
After publishing our 7thannual Global Trends Report, we went into detail on one specific topic again, with our 3rdSpotlight Report: Strategic choices in a competitive and converging marketplace. This time, we asked our global expert panel of printers and suppliers about their ways of adapting to the impact of digital mediaand the general downward drift in demand, in different market sectors and regions across the world. Changes and challenges of the shifting demands are impacting all of us in different ways, so it was important to us at drupa, to collect the voices of our industry and share ideas, solutions and goals to approach the digital age.
The first issues that come to mind when talking about a competitive and converging market are turnover, prices and margins – so naturally, that was the first thing we asked our 529 printers and 178 manufacturers and suppliers about. All parties reported to work against rather challenging conditions in most market sectors and regions. While the Packaging sector saw itself in a manageable position, Publishing and Commercial where facing especially troublesome challenges. Printmight still be growing overall, but the margins are steadily going down.
So, what to do about it? Some are simply looking to launch one or more new products or services, others are even planning on breaking into new markets. Over the past four years, 60% of printers reported launching major new products or services. For suppliers, the numbers were even higher. And that strategy seems to pay off, as about half the launches were successful, generating a new, more committed customer base. Creating a more diverse range of products and services was especially successful for suppliers, with 40% success rate for the smaller companies and up to 80% success rate for the largest suppliers. Understanding the market and being able to respond to customer demand, while not overextending the company’s resources long-term, were key factors for a successful launch.
Conquering New Market Sectors
When expanding into a new market sectors, our experts couldn’t stress the importance of staying informed about that new market’s trends enough: Having a great idea alone will not help your company, you also have to show up at events and expand your network!
Nevertheless, 30% of printers chose this strategy to expand their product range, reaching into new markets, while 54% of printers expanded only their product range without also expanding their existing market position. Suppliers were able to give their impressions of their customer’s launches, as well as their own efforts. While suppliers also reported encountering problems with overextended resources, they also repeatedly mentioned issues with finding the right channel to market their new products or services, as well as having to push back their scheduled launch dates. And for those innovative diversifications, timing is key: in this digital age more than ever, technologies are changing and evolving rapidly. In a competitive market, it is important to release your product before your competition does or your technology will be outdated.
62% of suppliers called those launches an important, if not very important, source of revenue over the past four years.
Stepping into the Future
Looking back on those measures, what can we say about the future? What could the next four years possibly look like and how can we really make them be a success?
Most printers and suppliers are planning on continuing their efforts of launching new products or services, learning from past mistakes to increase their success rate. Investment plans naturally show and overwhelming interest in Digital print technologies, followed by Finishing as the most popular targets.
Launching major new products and services needs to become part of normal business, implementing them as efficient as possible. But we cannot only be guided by flashy ideas or the pressure of the market, the selection must be carefully made to ensure success. Planning realistically, as we’ve said before, is key: your launch will run late and suck in more staff and other resources than initially expected, so don’t be overambitious. Your company needs to still be able to manage those stresses and strains. Don’t spread yourselves too thin. Manage your expectations. Branching out into new markets will still be more challenging, but thorough preparation should enable you to achieve good results.
Go to the drupa website for the Spotlight summaries and full versions.