Commercial Printing–The Economics of Printing’s Evolution
“All these relationships are independent of the economy,” Paparozzi notes. “It is kind of a structural change. How people communicate is changing, and print’s role in facilitating that communication is changing. We’re making the change from lithographic printing services to providers of a much broader range of communication services—digital, personalized, short run, on-demand, Internet or CD-type services, or database management, fulfillment and facilities management. These are all potentially very profitable, but, in the short run, they can be a drag on the bottom line because they do carry severe learning curves.”
He feels the challenge is to advance into alternative communications services that the clients demand, while protecting the core ink-on-paper business, which still remains lucrative. The industry can’t lean back on the economy either, as blue chip economic indicators consensus for GDP growth is 2.8 percent in 2000, down almost a full percentage point from 1999. Still, the economy’s performance has confounded analysts for several years and may well continue that trend.
Acquisitions remain a major factor in the industry, and several prominent players seek to fortify their standing. Among those companies is Cunningham Graphics International in Jersey City, NJ. According to Gordon Mays, executive vice president, Cunningham’s acquisitions target major business/financial locations, strong market niches and synergies.
“Many of our major clients are taking advantage of our distribute-and-print capabilities, particularly on a global basis,” Mays remarks. “The industry continues to consolidate—small mom-and-pop to regional, regional to national. There’s very intense pressure on regionals to compete against national firms. Clients are looking for national/global capabilities, greater breadth of services [Web services, document management, on-line ordering] and single-sourcing contracts.”