Q&A with Ronnie H. Davis, Ph.D.
After 23 years of examining and researching the printing industry, Dr. Ronnie Davis thought it was time to assemble the insight, knowledge, and lessons he learned about the printing industry into one resource, his new book: Competing for Print’s Thriving Future: Understanding and Taking Advantage of Emerging Economic and Industry Forces.
Here, he has compiled a “soup-to-nuts” reference book on key economic and management issues for the printing industry, including how various economic and market forces have shaped competition and performance in the industry in the past and how the industry will look in the future.
It also provides readers a plan to take the analysis and turn it into a sustainable competitive advantage in order to compete for print’s thriving future. By focusing on the future—the emerging printing industry—the book helps ensure readers are looking to the future potential of the industry and not at the past.
It is ideal for printing firm executives, industry supplier executives, college and secondary school instructors and students, and others interested in the future direction of the printing industry and key success factors for surviving and thriving in the future.
We asked Dr. Davis to share some insights, highlights, and background information on the analysis and features within his new book.
To begin, what do you see as the main takeaway after reading Competing for Print’s Thriving Future?
The key message of this book is that, contrary to all of the negative information about the current state of America’s printing industry, and in spite of the very serious challenges facing print at this time, there is still a lot of life and opportunity in print’s future. Indeed, a case can be made (and is made in this book) that print could undergo a reversal of fortune and grow long-run revenues in the foreseeable future. Even if this most optimistic view does not materialize, our backup future scenario is one of a thriving future for at least a significant proportion of the printing industry and printers.
The overriding general theme is the need for a new focus on positive thinking regarding the printing industry. More specifically, the book addresses how printers can create their own positive future by understanding and taking advantage of emerging changes in print’s driving forces, those changes that are shaping the printing industry of today and tomorrow.
Then, how would you advise a reader to apply the information contained in this report?
To fully comprehend and properly utilize the information and guidance provided in Competing for Print’s Thriving Futureprinters need to read the entire book. Indeed, the book should be read and discussed by the full management team and a plan for surviving and thriving developed.
What are the best opportunities for printers?
The printing industry is one of multiple market segments and niches. The book examines print by functional purpose, printing process, market segments/niches, and by life cycle position. This multiple categorization of print enables us to see both challenged sectors and sectors with remaining growth potential—and there are many.
Additionally, there are the various print sectors in terms of competitive intensity which reflects both the absolute size of a sector and the number of printers competing in that sector.
What this analysis shows is that there are many opportunities. The key to thriving in these markets involves both strategy and tactics.
How can a typical owner/manager make use of the data provided to boost their operations in the coming years?
There are numerous ways printing firm owners and managers can use the information in the book to boost performance by increasing sales revenue, improving productivity, decreasing cost, and increasing sales.
First, they simply must understand how the printing industry is undergoing a dramatic transformation from changes in various macroeconomic, structural, and operating forces.
Second, they can take advantage of these changes by looking for opportunities in the emerging forces—the forces that will shape the future printing industry.
Next, they can learn key strategies, tactics, business models, pricing practices, and other specific operations to increase performance.
The book also provides a user guide to strategy development in the printing industry and a “to-do list for short-term survival in challenging times.”
Once a commitment to change is made, management can follow the analysis, strategies, tactics, and other suggestions presented in the book to improve their chances of surviving and thriving.
What was the most surprising finding in your research?
The most surprising “epiphany” to me came as I took a new look at the research findings that we had developed over the years at Printing Industries of America and integrated it with new research conducted for this book. That epiphany is that print and the printing industry can have a thriving future.
There are many other industries, both media and non-media, which have gone through similar tough times as new competition has developed. In almost all cases, these industries ultimately “bottom out” and begin a new growth path. This is the future path, I believe, of print.
So, what are some key trends you’ve uncovered?
One key trend is the extreme differentiation of today’s printing firms in terms of their likelihood of surviving or exiting the industry in the competitive race for the future. The book defines four distinct competitive classifications:
- SuperPrinters—printers in the top quartile of profitability that typically earn above 6%–7% on sales. These printers will survive and thrive.
- Survivors—printers in the third quartile of profitability that are making a profit, perhaps 2%–5% on sales. These printers are not in the profit leading group but will likely survive.
- At-risk printers—printers in the second quartile of profitability that are barely breaking even or losing money and have a high risk of going out of business.
- Expendables—printers in the bottom quartile of profitability that are experiencing losses on a continuing basis and most likely will go out of business.
Today’s printers need to determine their place in this spectrum and take immediate steps to improve or defend their position.
What is the biggest mistake a printer could make in the coming years?
The biggest mistake a printer can make is to have a negative attitude. In far too many examples of presentations, conferences, articles, and reports, print and the printing industry is portrayed as mature, declining, dying, or worse.
Yes, in some context print and the printing industry can accurately be described as mature or declining. However, this characterization of print and printing is not correct. History shows many successful, profitable firms can exist and even thrive in industries that are in long-term decline, and there is a lot of evidence that print is coming back. Print’s large economic footprint with many niches, processes, and products is an ideal situation for thriving amid maturity. Thousands of printing firms can survive, thrive, and become SuperPrinters—printers in the top echelon of profitability and growth. Your management team, employees, customers, and suppliers need to know this fact and that you still have a plan to thrive amid the challenges.
Press: What are the most relevant metrics a company can track to ensure they’re on the right path?
The book suggests several key metrics printers can use to track their progress in transitioning to a successful future. These include productivity metrics like sales and value-added per employee and factory employee; cost metrics like various labor cost, manufacturing cost, sales and administrative cost as ratios of sales; and long-run trends in cost. These metrics can be compared with all printers and more importantly, to industry profit leaders for benchmarking purposes.
Press: What is the best advice you would give a typical printer in today’s environment?
The best advice, I believe, is the advice in the last chapter of Competing for Print’s Thriving Future:
Think Positive: First and most important is to have a positive attitude about your firm and your industry.
Think Smart: Printers need to understand print’s emerging economic and industry forces as examined and explained in the book. You, your management team, and key employees need to think smart in order to understand these forces and where they are taking the industry.
Think Forward: Thinking smart is not enough to compete for print’s thriving future. You also have to think forward in order to manage forward. The various forces discussed in the book are emerging forces.
Think Better Not Bigger: As demonstrated in the book, the industry can be characterized as one of constant returns to scale in terms of long-run cost. However, these curves are likely shifting down as a result of technology change. The lesson from this is that printers need to think about investments in technology that reduce cost rather than on getting bigger by chasing sales growth.
Think Strategically: The next key component for competing for print’s thriving future is to think strategically. The book offers a menu of successful industry strategies.
Additionally, you need to think process. A User Guide to Strategy Development in the Printing Industry is contained in the book’s appendix. Thinking “off the top of your head” will not work.
Think Business Model: As demonstrated in Competing for Print’s Thriving Future, business model selection makes a difference in profitability in the printing industry.
Think Like a SuperPrinter: Profit-leading SuperPrinters not only outperform and outthink other printers, but they also outexecute. By this I mean they not only figure out the right thing to do, but they also do things right. And these “right” things are identified in the book.
Think Pricing Power: To compete for print’s thriving future you need to use price as a strategic tool rather than as defensive cover. You need to understand cost, but don’t price solely on cost but also according to demand elasticity.
Think to Combat Foreign Competition: Although print remains primarily a domestic industry, it is increasingly global. This is particularity true for niches with longer lead times and less integration with domestic distribution systems such as the postal services.
There is a specific set of strategies and tactics that printers can use to stave off foreign competition.
Don’t Think Alone: You need to remember you are not alone in this thought process. Remember to utilize the available resources and expert networks that are available through Printing Industries of America. Studies demonstrate that association membership is correlated with improved performance, higher profits, and increased sales.
Think Again: Lastly, printers who plan to compete for print’s thriving future need to think and think again. You and your management team need to think and think again to constantly repeat the above ten steps to competing for print’s thriving future.
Any final words on how this book can help?
Yes. Thousands of printing firms will successfully transition over the next decade. They will be a diversified group in terms of size, ownership structure, and print market segment—small, medium, and large; family-owned and publicly owned; and specialized in various segments from labels and packaging to direct marketing to books, catalogs and publications, and many other niches. These evolving and adapting printers will be the ones who learn how to be “better differently” from the thousands of their competitors that do not make the cut. The book addresses each of these areas to help printers succeed into the future.
To order your copy of Competing for Print’s Thriving Future: Understanding and Taking Advantage of Emerging Economic and Industry Forces, speak with a Member Central Representative by clicking here, 800-910-4283 ext. 770, or 412-259-1770.