In their influential 2004 book, “Blue Ocean Strategy,” W. Chan Kim and Renée Mauborgnen laid out their theory of how businesses can break from the pack. By focusing on “blue oceans” – uncharted markets – rather than “red oceans” – existing markets with cutthroat competition that bleeds businesses – businesses can tap into more profitable, unaddressed customer bases with new products. How do we apply this strategic framework to the imaging industry? There’s no shortage of voices clamoring for imaging channel dealers to adapt and expand in new directions: subscription models, managed network services, office security, cybersecurity, and more. Some of these options may make a lot of sense for larger dealers with the resources to invest and scale in new verticals, but for smaller and midsized imaging channel dealers, light production print may be the sensible, economical bet.
What’s light production print?
Light production print falls between true, large-scale production printing and office printing. Print volumes for inkjet generally range from 500,000 to 1 million cut-sheet printed copies per month per printer. These print runs often offer additional features, such as higher resolution color, wide-format support, or different paper types. A customer might be a hospital that must produce billing invoices, lab results, and information pamphlets on a regular basis. A business like this doesn’t have the budget or space for a high-volume printing plant, but their needs still far exceed standard office printers.
How to apply blue ocean strategy
Blue ocean strategy revolves around value innovation – in other words, offering something that is lower cost and simultaneously distinct from competitors – rather than being constrained by an existing market. Take Nintendo, for example. The Japanese video game console publisher found itself lagging behind in sales compared to the early 2000s as consoles became increasingly powerful and, by extension, expensive. Rather than continuing down the same path and directly competing with Microsoft and Sony for shrinking margins on even more powerful and expensive hardware, Nintendo broke out of the box. It created the Nintendo Wii and Nintendo DS, novel video game consoles that relied on unique features that brought in new customers.
The current red ocean for many print dealers is shrinking print volumes, exacerbated by customers reducing their budgets as they feel the squeeze of inflation. In this shark tank, more products chasing fewer dollars means shrinking margins. To pivot to a blue ocean strategy of light production print, print dealers must address four issues: buyer utility, price, cost, and adoption.
1. Buyer utility: Meeting the customer’s unique needs
Do I need (or at least want) this product or service? That’s the question underpinning every customer transaction, and a blue ocean strategy must resoundingly answer this in the affirmative. Today, there is a swath of businesses where light production print is of tremendous utility.
This demand is also likely to grow as industries and people adjust to the post-COVID world. Employers are still trying to find the optimum balance between in-office work and work-for-home, but what’s clear is that it’s going to be less than the pre-COVID standard of five days a week in the office. Companies are reducing their office space footprint to avoid paying rent for empty cubicles, and along with that comes reduced office printing. Maybe it once made financial sense to maintain a high-volume in-plant, but with reduced space and slashed budgets, light production is now the logical choice.
Similarly, education customers will find increased utility in light production print over the coming decade. The aftermath of COVID has shown that not only did remote learning lead to some students falling between the educational cracks, but that not all schools were equally equipped and prepared. Some students didn’t have consistent, affordable access to the internet, while some districts didn’t have the tens of millions of dollars to provide every student with a tablet or Chromebook. With students back in class, districts are getting back to printing to help close those gaps. Other use cases that won’t be disappearing anytime soon include:
- Government in-plants, from state and county administrators to the federal government.
- Medical labs, which must send out large volumes of test results.
- Hospital print shops, where the zero-emission nature of inkjet is a healthcare requirement.
- Printed mailers and envelopes, which remain in high demand even as mail volumes decline. The cold, flat, and dry nature of the inkjet process makes it a perfect match for mailable documents.
2. Price: Making sure customers can afford it
The next question on a potential customer’s mind will be, can I afford this product I need? For light production print, the answer is much more likely to be yes. High-volume printing solutions can easily be a seven-figure investment; by comparison, inkjet printers can often be seen going for $100,000 to $300,000. This price advantage for light production inkjet printing isn’t just up front, it also continues over the lifespan of the product. Compared to laser, where the cost per copy (CPC) of toner can be 4 to 6 cents per page, the cost for inkjet can be less than a penny. These savings add up quickly when a business has to make hundreds of thousands of copies per month.
For end users, there are also larger operational savings in the form of reduced footprint and simplified maintenance. Going from a continuous feed printer that’s 25 or 33 feet long and needs reinforced flooring due to its tremendous weight to an oil-based inkjet that’s compact enough to be less than 10 feet long is a tremendous cost saving at a time when everyone is trying to downsize their offices. And on the maintenance side, inkjet printers have an objective advantage over laser printers due to fewer moving parts leading to fewer misfeeds and jams.
3. Cost: The advantages of limited competition
Expanding into light production print with inkjet has to also make sense for dealers. This is the crux of a blue ocean strategy: increased profitability due to limited competition for ample demand. On the demand side, America still has a love affair with paper, with the rate of decrease for transactional documents much slower than that of Europe. On the supply side, competition for cut-sheet inkjet volume is limited, unlike the battles we see for toner devices in production print. Put these together, and early adopters who break into light production print with inkjet will fare much better than dealers scrapping for the shrinking demand in existing markets. That’s not to say that light production print or even inkjet for light production is a wholly untapped market. Big dealers have been in production print for years. But the good news is that there is ample space still, and being a smaller or midsized dealer can even have its advantages.
Take the education market. Schools and districts in the U.S. are very localized, and the needs and means of one district can drastically differ from the next one over. This puts smaller, more agile dealers in prime position to meet the needs of these diverse customers.
4. Adoption: Overcoming new obstacles
Diversifying with a blue ocean strategy like light production print can be a winning strategy, but it brings its own challenges that shouldn’t be overlooked. Fortunately, they’re often less daunting than other new products. One of the challenges of pivoting to a new product is simply getting your salespeople and support pipeline up to speed. But with product print, it’s a much smaller leap for salespeople used to selling copiers and MFPs than, say, selling cybersecurity services. Any experienced print salesperson will know the importance of knowing a customer’s application based copies (ABCs) – course materials, envelopes, forms, etc. That this is one of the main advantages of inkjet makes the transition that much easier.
Bon voyage into light production print
There is an exciting world to discover when diving into the ecosystem of production print. At a time of tremendous industry disruption and uncertainty, cut-sheet production inkjet is the epitome of blue ocean strategy. Dealers already have much of the knowledge and resources to dive into this newer market, and all that remains is embarking on the journey.
Andre D’Urbano is director of RISO’s dealer channel and corporate marketing department. He has been in the business a little over 30 years, having spent 18 years with RISO and five years each managing sales branches for Konica Minolta and Canon.