Explore ways in which digital imaging can broaden a shop's service offerings and help generate new revenue.
By Tim Greene
I'm happy that Screen Printing magazine invited me to address this readership and present some of the analysis that I prepare in my role at InfoTrends. In future installments of this column, I will be writing mostly about the potential and reality of wide-format digital printing technologies, as that is what I spend my time tracking. But for my first article, I want to write about how I would look at the screen-printing market.
One of the very helpful tools I use in my work is a classic model for the strategic consideration of profitability in any industry that was originally developed by one of my heroes, Michael Porter. In a nutshell, Porter's model allows us to consider the influences of five different market forces. In the screen-printing industry, these forces might include the influence of suppliers, new market entrants, substitute products, buyers, and internal market competition (Figure 1).
Let's just examine these issues separately, because as a screen printer, you have to analyze your market and strategy based on an honest assessment of what is happening. Consider first the influence of suppliers to the screen-printing industry. Are ink prices going up? How do you react to that? Do you sacrifice profit margin, or can you pass that price increase on to your customers? Or are there other ink suppliers from which you can get your ink? How married are you to your suppliers? Do their products enable you to differentiate yours? If your suppliers are adding to your strategic advantage, then kudos to them and great for you, but if the opposite is true, perhaps it is time for a reevaluation.
What about new market entries? Are new companies popping up in the screen-printing industry in your local market, or is the level of expertise and capital equipment required enough to create a barrier to market entry? Well, on the digital side the cost of equipment keeps coming down, lowering the barrier to overall market entry. However, many new digital market entries would be limited by the ability to sell against screen-printing establishments with expertise and long histories in the making and selling of printed materials.
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