Dickeson–Becoming a Model Student
As the result of mergers and acquisitions, the old model of family entrepreneurial management is passing from the scene. “Family” is giving way to “corporate.” But many are discovering that corporate model printing is a mixed blessing. Although decisions are more objectively (at least, less subjectively) made, decisions also get submerged in internal political games and personal power objectives.
The current acquisition and merger mania is reminiscent of the late 1960s, when conglomerates pasted together disparate businesses with stock swaps. Most of those marriages failed in the ’70s and ’80s, when anticipated synergies didn’t materialize and cash ran out.
Have we, in printing, learned from that history lesson—or are we doomed to repeat it? Will acquisitor companies slash mid-management personnel at the acquired companies to reduce overhead cost? If not, whence comes synergy? Central sales force? Or centralization for what is a collection of custom service/manufacturing enterprises—addressing a wide gamut of markets, of customer needs—lacking threads of compatibility?
Where there is homogeneity of market, process and product among combined companies, there well may be cost-reducing purchasing, managing, marketing and sales synergies. Where commonality is lacking among combined companies, it is difficult to grasp the effectiveness of the conglomerate model envisioned.
The Pricing Model
Most certainly we must review the “mark-up” model of pricing the conversion service that we provide. It is obsolete. Commercial printing is not a “commodity” manufacturing activity. We’re not engaged in wholesaling or retailing books, business forms, inserts, brochures and magazines.
Commercial printing is now a conversion SERVICE, not a manufacturer of proprietary shelf items. The new model must focus on the value-added, customized service being supplied. The old model directed concentration to internal “virtual” costs for price determination. The new model directs pricing consideration to a) the customer-perceived value added, and b) alternative media and competitive price constraints.