Big Picture - November/December 2014 - (Page 18)

inside output Broadening Your Horizons How diversification can save your shop. | by Craig Miller R ecently my wife, Sue, and I returned from a two-day visit to a colleague's company in the upper Midwest. We love to visit other shops in our industry; they're a great example of the benefits of diversity. They're thriving, and it's a testament to wise, strategic decisions to evolve a 200-year-old company from one product and market into an unparalleled diversity of products and services. It reinforced Sue's and my notion about why we have spent so much time, money, and effort diversifying our company for the past 20 years. This visit also highlighted the benefits a PSP can derive from diversification. The first is a life insurance policy. Not for the owners, but for your business. Since we founded our company, not a single one of the half-dozen competitors we initially faced is still in existence. Over half that started later are gone as well. The market simply evolved and they failed to evolve with it. Investment in diversity is sound insurance your business will not die from insolvency because a market your product line served slumped, evolved, or dissolved. BIG PICTURE November/December 2014 Challenges of Commoditization Your lifeline is profitability. And profitability is the result of increasing your client base and product offerings with an emphasis on developing products and services that support a reasonable to generous profit margin. This rarely happens with products that become commoditized. It's essentially a market with too much supply for a limited demand. In this instance, every PSP is making essentially the same product and companies are forced to sell on price. This happens with products that lack significant differentiation. Anyone who has been in our industry for over a decade understands what happened to the billboard market. Billboard Craig Miller is a principal shareholder in Las Vegasbased Pictographics, (pictographics.net) where he is also director of military and law-enforcement projects. 18 printing became the "poster boy" or, to use a grand-format analogy, the "billboard" of commoditization. We've never printed billboards, but many of our friends in the industry did. In the mid '90s, billboards were selling for $5 a square foot. What are they now? Maybe hundreds of companies contributed to the commoditization of billboards; it was hard to resist if you had a five-meter solvent printer and billboards were the centerpiece of your business plan. A few companies ultimately benefited from the downward spiral and now own the market and survive based on volume. They have figured out how to efficiently and profitably manufacture this commodity. Good for them, but this is not how we want to make a living. What happens when the cost of digital billboards plummets like all electronic technology ultimately will? In the future, when you can buy a 40-inch LED flat screen monitor for a hundred bucks, what do you think is going to happen to the indoor printed sign market? moRe is betteR We've never wanted to be a one trick pony. Modern large- and grand-format print technology enables all of us with the ability to make a gazillion different products with these beasts in our print rooms. You can make garments; carpet; wallcoverings; http://www.pictographics.net

Table of Contents for the Digital Edition of Big Picture - November/December 2014

Big Picture - November/December 2014
Contents
Insight
Wide Angle
Upfront
Inside Output
Dynamic Signage
Planes, Trains & Automobiles
On Display
Perfect Fit
R+D
Explorer

Big Picture - November/December 2014