e views - January 2009 - (Page 7)

The state of the economy Introduction Senior executives of enterprises of all sizes are facing extremely trying times. Consumer confidence is weakening, stocks have dropped to their lowest levels in several years, the financial system is in question, and global Fortune 2000 companies are announcing huge layoffs. The economy is in a slowdown, and many signs indicate that a full-blown recession is looming. CEOs and other business leaders are no longer allowing aggressive business investments without more rational strategies, more solid metrics on return on investment (ROI), and a direct, positive impact on customer value. Economic challenges are forcing enterprises to return to a sound economic review process for potential new investments. The implications for the printing industry are significant. From 1999 to 2006, the total number of printing establishments in Western Europe fell by 5,970 (8.1 percent decline) and the number of employees dropped by 126,000 (17.3 percent decline). According to research conducted by InfoTrends in 2007, most respondents expected the industry to further consolidate in 2008. This trend will surely accelerate with the economic downturn and the limited availability of credit, particularly for those companies that did not invest in efficient production equipment during the past few years and those with weak cash flows. Statistics also show that the number of print establishments in the UK have declined from 15,450 in 1998 to 12,165 in 2007. As shown in the table below, companies of all sizes have seen declines over the past five years. Table 1: UK print establishments Print N.E.C. 2222 2003 0-4 employees 5-9 employees 10-19 employees 20-49 employees 50-99 employees 100+ employees 100-249 employees 250+ employees TOTAL 7,535 2,355 1,515 855 285 180 130 50 12,730 2004 7,840 2,480 1,500 885 290 195 155 40 13,195 2005 7,620 2,460 1,425 815 290 185 145 40 12,795 2006 7,470 2,390 1,400 800 285 190 145 45 12,535 2007 7,475 2,115 1,325 810 260 180 140 40 12,165 Figure 1: Do you think the number of players in the printing industry will shrink in 2008? The only segment of the printing industry showing an increase is digital printing. This growth has been catalyzed by savvy graphic communications and outsourcing service providers that have developed the right value-added services portfolios and business models that have and will continue to enable them to survive in good times and bad. There are six critical strategies that graphic communications firms and outsourcing providers can deploy to help them thrive and grow, even in these challenging economic times: • The use of Internet-enabled strategic sourcing customer programmes can serve small and large businesses. These programmes cover digital asset management; Web-to-print collateral; promotional products; as well as support material management, distribution, and fulfilment. • Leveraging multi-channel communications programmes with demonstrable ROI • Emphasising online, automated ordering processes for print products (B2B and B2C) • Focusing on markets unaffected (as much as possible) by recession • An emphasis on lean manufacturing and automation • Leveraging software-as-a-service (SaaS) solutions. 7 Issue 7 January 2009 e• views Journal, Xplor UK & Ireland Edition

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e views - January 2009 Contents Technology Management Creating a Print Intelligent Enterprise The Future of Broadband Connectivity: @ 320 kph? TPE Master Class Cover Story TransPromo and the Credit Crunch Xplor Europe News Service Directory

e views - January 2009

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