The economic downturn has taken its toll on the printer business, causing shipments to fall more than 17 percent worldwide compared with last year, with color laser multifunction devices a relative bright spot in an otherwise gloomy market.
Follow the link to read this article: http://www.crn.com/hardware/217701335;jsessionid=PNGJBEKCRPJWGQSNDLPCKH0CJUNN2JVN
Thank you to Joe at Document Solutions Daily for introducing us to this great information www.kworkspublishing.com
Showing posts with label MFD. Show all posts
Showing posts with label MFD. Show all posts
Wednesday, June 3, 2009
Sunday, March 29, 2009
Printer Market 4Q 2008: News That Isn't Fit To Print
ChannelWeb's publication of Gartner's placement statistics for printers and copiers is sobering, although not surprising. The economny--which as of late actually seems to be improving--may be driving the lower hardware investment, but my guess is that the process changes implemented to operate with fewer devices will be maintained by many of the companies when the economy starts to grow. Executives that manage budgets, the CIOs, CFOs, and Chief Procurement Officers (CPO) have now set a new, and lower, bar for output device expense.
The imaging business is still a great business. Make sure you have a plan in place to leverage this new environment. The link below will take you to ChannelWeb's article on the Gartner stats:
http://www.crn.com/hardware/215900485;jsessionid=ICR4AUYE2SGMMQSNDLPCKH0CJUNN2JVN?cid=VARBusinessFeed
The imaging business is still a great business. Make sure you have a plan in place to leverage this new environment. The link below will take you to ChannelWeb's article on the Gartner stats:
http://www.crn.com/hardware/215900485;jsessionid=ICR4AUYE2SGMMQSNDLPCKH0CJUNN2JVN?cid=VARBusinessFeed
Sunday, March 1, 2009
How Much Will The Copier Industry Change?
Significantly, if you pay attention to the research companies! I recently read a research report that indicated that mono copier based MFD placements had declined from 1.1 million in 2007 to 900,000 in 2008 and will decline another 20% in 2009. This analysis showed mono copier based MFD placements in the low 500,000s by 2012 (in case you missed it that is less than half of the 2007 placements). Think the answer is a shift to color? Not according to this report that showed color placements fairly static, rising from 250,000 in 2007 to 292,000 in 2012, after initially falling in 2008 and 2009. Nice percentage increase but only 40,000 units.
So a research group and their crystal ball are suggesting a “sea change” in the copier industry! Maybe they are wrong; it certainly would not be the first time. Maybe they are only half accurate and the industry will decline from 900,000 mono placements (let’s give them credit for accuracy on an event that already occurred, 2008) to 750,000, and color will remain under 300 thousand units. What will the industry look like when total placements decline from approximately 1.35 million in 2007 to 1 million in 2012? That is a 30% decline in placements. I would keep in mind they are stating that will occur this year, so they would have to be really far off in their predictions.
Let’s throw in the shift to A4 copier based units. Regardless of your desire, over the long term A4 will replace many A3 units at a lower average unit selling price (AUSP). Since we still have the same major copier manufacturers today as we did last year we clearly have a production over capacity issue: There are more factories pumping out more copiers than can be absorbed by end users. Over capacity—as any economist will tell you—leads to lower prices (the old supply and demand theorem). So you have a couple of dynamics suggesting AUSP will continue to decline.
Don’t jump off that ledge just yet! How do you deal with this news? In a word, “PLAN” for it. It wouldn’t surprise me if one or more copier manufacturer merged operations or was acquired by another manufacturer; in this situation operations being defined as technology and channel (dealers). It also wouldn’t surprise me if we had 50% fewer dealers by 2012. Fewer product placements will result in less distribution, either planned or unplanned. This is another fact to discuss with your economist friend.
So PLAN on being one of the thriving survivors!
Put together a strategic business plan that models out the change over the next five years. Launch and perfect a print management program. After all, where do you think some of that decline in copier placements is going? Yes, to printers! Not all of it as printer placements are also declining but there is a shift. And, all of that additional aftermarket revenue coming out of the printer fleet has the potential to more than offset the decline in copier hardware revenue—at a higher profit margin.
Focus on productivity in all departments. Lower equipment AUSP will translate into lower gross profit dollars, even if you maintain your gross profit percentage. Optimize operations so you can operate your back office with high customer service and low cost: Focus to processes and automation. Maximize your return on service. Drive improvements in all areas year over year: Stay focused and maintain a high intensity level.
You don’t want to be one of the “unplanned exits” from the industry and by planning now not only will insure your place in history but you will insure a high profit business. Copiers and printers are not going away, they are just fading slightly. It will remain a great business for those with a plan!
So a research group and their crystal ball are suggesting a “sea change” in the copier industry! Maybe they are wrong; it certainly would not be the first time. Maybe they are only half accurate and the industry will decline from 900,000 mono placements (let’s give them credit for accuracy on an event that already occurred, 2008) to 750,000, and color will remain under 300 thousand units. What will the industry look like when total placements decline from approximately 1.35 million in 2007 to 1 million in 2012? That is a 30% decline in placements. I would keep in mind they are stating that will occur this year, so they would have to be really far off in their predictions.
Let’s throw in the shift to A4 copier based units. Regardless of your desire, over the long term A4 will replace many A3 units at a lower average unit selling price (AUSP). Since we still have the same major copier manufacturers today as we did last year we clearly have a production over capacity issue: There are more factories pumping out more copiers than can be absorbed by end users. Over capacity—as any economist will tell you—leads to lower prices (the old supply and demand theorem). So you have a couple of dynamics suggesting AUSP will continue to decline.
Don’t jump off that ledge just yet! How do you deal with this news? In a word, “PLAN” for it. It wouldn’t surprise me if one or more copier manufacturer merged operations or was acquired by another manufacturer; in this situation operations being defined as technology and channel (dealers). It also wouldn’t surprise me if we had 50% fewer dealers by 2012. Fewer product placements will result in less distribution, either planned or unplanned. This is another fact to discuss with your economist friend.
So PLAN on being one of the thriving survivors!
Put together a strategic business plan that models out the change over the next five years. Launch and perfect a print management program. After all, where do you think some of that decline in copier placements is going? Yes, to printers! Not all of it as printer placements are also declining but there is a shift. And, all of that additional aftermarket revenue coming out of the printer fleet has the potential to more than offset the decline in copier hardware revenue—at a higher profit margin.
Focus on productivity in all departments. Lower equipment AUSP will translate into lower gross profit dollars, even if you maintain your gross profit percentage. Optimize operations so you can operate your back office with high customer service and low cost: Focus to processes and automation. Maximize your return on service. Drive improvements in all areas year over year: Stay focused and maintain a high intensity level.
You don’t want to be one of the “unplanned exits” from the industry and by planning now not only will insure your place in history but you will insure a high profit business. Copiers and printers are not going away, they are just fading slightly. It will remain a great business for those with a plan!
Sunday, February 22, 2009
Don't Cut Your Prices!
I realize that we are in a poor economy and that revenue is one measurement you always want to focus on, but cutting your prices is a death spiral. And don’t give me the cash flow reason either: the cash flow statement starts with the entry for net income. Lower prices results in lower margin, which results in lower net income—all else equal.
There are a lot of reasons for the death spiral comment. One is the cultural change you will instill in your sales force. If you have spent the last decade developing the team to sell value and fight for profit using enablers such as advanced capture, document routing, or variable data , and then send the message “get the deal at all cost,” your decade of work has evaporated in six words.
Once you get your sales force accustomed to selling on price how hard will it be to switch them back to value when we exit this economic trough? I would tell you it is next to impossible.
At the company I worked at prior to Strategy Development the CEO rolled out a new pricing and compensation structure for the sales force. Since I ran the largest business unit, and the only one gaining market share, I had my finance team run some Monte Carlo Modeling on the plan to see how it was going to affect our revenue and profit. The modeling demonstrated that GP would decline by 300 to 400 basis points and, depending on the mix of business, could actually increase compensation: Lower GP with higher compensation, about the ugliest of scenarios.
The CEO and I had what I’ll term as, robust discussion on the program (I always took delivering my results seriously). After this robust discussion we came to the conclusion that we had two distinct philosophies on strategy, and I left. Since it was a public company I could follow the results. The next quarter equipment GP decreased year over year by 430 basis points and the Wall Street Analyst annihilated the CEO on the earnings call. Even though it was a topic of discussion every quarter thereafter, the GP never recovered. That company spun out until it was ultimately acquired at what looked like a bargain, a significant discount, relative to other public companies acquired in the space.
The point is not that the modeling my team produced was accurate—who cares because I failed in delivering the message so that it would be heard—but that even with extreme focus and three years of opportunity that company could never get their margins back up. Don’t cut your prices!
So what actions should you take? Make well planned and strategic investments in sales and fund those investments by optimizing your service operations and your back office operations. Exiting the current economic trough in a position of strength is one big reason to focus on these two areas but another looming issue is that your new competitors—the VARs and print management companies stealthily entering your space—have G&A in the mid to high single digits. Most BTA channel companies have G&A in the high teens to low twenty percent area. Set your five year plan now to get G&A to less than 10% and to maximize service returns.
The next couple of entries will focus on how to accomplish these goals.
There are a lot of reasons for the death spiral comment. One is the cultural change you will instill in your sales force. If you have spent the last decade developing the team to sell value and fight for profit using enablers such as advanced capture, document routing, or variable data , and then send the message “get the deal at all cost,” your decade of work has evaporated in six words.
Once you get your sales force accustomed to selling on price how hard will it be to switch them back to value when we exit this economic trough? I would tell you it is next to impossible.
At the company I worked at prior to Strategy Development the CEO rolled out a new pricing and compensation structure for the sales force. Since I ran the largest business unit, and the only one gaining market share, I had my finance team run some Monte Carlo Modeling on the plan to see how it was going to affect our revenue and profit. The modeling demonstrated that GP would decline by 300 to 400 basis points and, depending on the mix of business, could actually increase compensation: Lower GP with higher compensation, about the ugliest of scenarios.
The CEO and I had what I’ll term as, robust discussion on the program (I always took delivering my results seriously). After this robust discussion we came to the conclusion that we had two distinct philosophies on strategy, and I left. Since it was a public company I could follow the results. The next quarter equipment GP decreased year over year by 430 basis points and the Wall Street Analyst annihilated the CEO on the earnings call. Even though it was a topic of discussion every quarter thereafter, the GP never recovered. That company spun out until it was ultimately acquired at what looked like a bargain, a significant discount, relative to other public companies acquired in the space.
The point is not that the modeling my team produced was accurate—who cares because I failed in delivering the message so that it would be heard—but that even with extreme focus and three years of opportunity that company could never get their margins back up. Don’t cut your prices!
So what actions should you take? Make well planned and strategic investments in sales and fund those investments by optimizing your service operations and your back office operations. Exiting the current economic trough in a position of strength is one big reason to focus on these two areas but another looming issue is that your new competitors—the VARs and print management companies stealthily entering your space—have G&A in the mid to high single digits. Most BTA channel companies have G&A in the high teens to low twenty percent area. Set your five year plan now to get G&A to less than 10% and to maximize service returns.
The next couple of entries will focus on how to accomplish these goals.
Saturday, February 21, 2009
Gartner pushes managed print services
Printer, copier and MFP sales are in a tailspin, but Gartner says end users should be investing in deployment alternatives
Read the article in CRN: http://www.channelweb.co.uk/crn/news/2236608/gartner-pushes-managed-print#Szene_1
Read the article in CRN: http://www.channelweb.co.uk/crn/news/2236608/gartner-pushes-managed-print#Szene_1
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