The printing industry is fragmented with many individually owned print shops. All print shops do not have the feasibility/capital to undertake all orders. As an example, if a consumer needs business cards, calendars, and brochures, these jobs would require different machines which print shops can ill afford to have. Usually, print shops only have one or the other. (Note: we'd also have to build close relationships individual print shops) With the network of all individually owned print shops, collectively, we can provide all the print jobs needed for the customers without the hassle of customers needing to locate multiple print shops. We will sell for the whole printing industry in our local geographic area.
We will provide consumers with our list of vendors and their services. Consumers can see immediately what services are available and can make price comparisons immediately. Consumers can then make place their orders through us.
2. What are its features and benefits?
For customers, rather than having to deal with multiple suppliers, they can come and deal with us only. We would act as print managers, and will provide collective information on the available services. We can provide a fast turn around time, quality, and low prices. We are impartial about pricing or job orders (no preferential treatment) through our print network, and we can guarantee low pricing because of our large buying power and can thus negotiate prices on behalf of the consumer.
Sure, printing jobs can be done cheaply by searching through the Internet, but they are usually speciality print orders, with little variety as they batch print where jobs are done through mass order ie. only glossy business cards printed on egg shell white. We'll provide account brokers, where we can provide for all variety of printing jobs using the collective resources of individually owned print shops. (FUTURE: Expanding to Trade-Only Print Shop once we get off the ground.)
For our network, print shops, we provide consumers and volume that they usually do not have. (We will need to have someone on the inside, someone with experience in the printing shop and that would be top priority) For the print shop, they do not hire sales people as their sales people are their customers. They rely on word of mouth and convenience for the business. We would provide a larger network of customers that only a sales force would provide.
3. What does it compete with? How is it different from, or superior to, the competition?
The nature of our business allows us to indirectly compete with printing services already provided by procurement services or other printing brokerage’s already established. We do not compete head on nor wish to compete with existing services provided, but instead provide services to those who do not have access to such discounts granted by having large buying power to negotiate low prices.
Because we provide services for small, individually owned businesses who do not have the financial flexibility or the buying power to set up a procurement office, we can provide a service to negotiate great low prices with printing vendors.
4. Do we have any proprietary rights to the product/service?
Except the information provided by our consumers, our proprietary rights would be restricted to the information data, programs, software, materials used in our services and that of our suppliers.
5. Are there technological challenges in its development, and what are they?
Our biggest threat would be the changes of the environment, namely technology changes. There are already trends of using less physical printing needs for the propose of reducing paper consumption. An example would be the use of social media Twitter and Facebook, where consumer reach potential would be maximized through the use of these social media websites, making brochures or flyer's obsolete for advertisement.
6. What are future development plans, such as upgrades or product line extensions?
Our future development plans would be the expand services in different geographic locations, expand our consumer relations to growing business to act on behalf ot their procurement needs, and expand our vendors to include trade-only print shops to provide greater services and higher capacity.
7. What additional information do we need to define and differentiate our product/service?
Our top priority would be to recruit an experienced and knowledgeable individual in the printing/publishing industry to help guide us in our business venture, provide our business with expertise and legitimacy, and establish close relationships with vendors.
3. Market Analysis
1. What industry are we in? What do the industry economics look like? What trends are important in this industry? What are important technological breakthroughs or regulations we need to take into account?
We are relying on the printing industry. The printing industry generates a wide set of products, ranging from newspapers,magazines, books, post cards, etc. There are many indirect business depending on the printing industry, such as packaging, delivering service. In general, printing industry requests relatively high fixed cost, for printing equipment purchase and continuous maintenance purpose.
There are several significant trends in printing industry. First, the increasing use of Internet in the publishing world has brought strong impact on printing industry. The publishing companies would first to distribute data through Internet, and second to print them out. On the other hand, the customers are demanding online sources instead of actual paper work through many e-readers such as ibook, Kindel. Also, many printing work is done from customer’s home or office printer now. In this content, there is increasing pressure of lowering costs in printing industry. The advancement of technologies does allow the workflow automation and digital printing, which would significantly save the high variable costs. Another common trend is printing factories moving away from being press-centric to printer-centric. By saying that, often the large printing plants are located far away from the business center, instead at non-urban area to save cost.
Meanwhile, the regulations related to book-publishing copyright influence the business operation in printing industry.
2. What is our particular market within this industry? Are its economics different from the industry as a whole? How large is it? What is its growth potential?
Awesome Tree Printing Solutions (ATPS) is actually a service company. We are capturing the niche market which provides service to match our customers to producers. Our value proposition is quite different from traditional player in printing industry. First, ATPS requires low fixed cost. The company’s major cost is expected in sales commission, administration fee and miscellaneous cost. The start-up target market is mainly Toronto area. If the business model is proved to be successful, we will expand to major cities in Canada, and East coast in U.S.
3. Who is our target customer? What problems are we solving for them? How do we reach them? Who makes the buying decision? What are their decision criteria?
Our target group is Universities, Organizations and Small/Medium Sized businesses around downtown Toronto and later on the Greater Toronto Area. Often small business does not have sufficient resources to either locate an inclusive service printing shop or get a bargain price. ATPS offers a one-stop service to our customers. Customers can get all printing tasks done through us, and we will match business to the nearby printing shops upon customer’s request, or provide delivery service , to first save transportation cost and get a bargain price. As we believe, the small/Medium sized businesses are more price-oriented, while organizations and universities are quality and convenience-focused. Therefore, ATPS is trying to satisfy those criteria, being fast, cheap and still keep the above average printing quality as a new start-up firm.
4. Who are our competitors/substitutes? What are their strengths?
Several possible threats. First, customers have direct contact to local printing shops after a deal with us. We have been thinking about this possible situation. But as we initially plan, ATPS is offering a multitasks printing service. Therefore, it would barely be done in one local shop or achieve a bargain price from one shop. In customer’s point of view, if it is a simple paper printing work, walk-in printing shop would save time for sure, in terms of price, ATPS is having more bargaining power than individual customer and therefore is able to get a good price. If it is requesting multishops to get the task done, ATPS is the best choice.
Another competitors would be the existing factories, who is offering multi-task printing service. They usually have built up the business relation with large organizations and is able to offer a low price since they are utilizing the factory’s capacity and is able to do effective quality control to save cost. However, considering the machines start-up and warm-up cost, factories are looking for large volumes and therefore may not be interested in the deals from small/medium sized businesses. And ATPS is capturing the remaining market.
Customers could print at home or office. However, it would not ensure the quality and the printing costs are higher than the price our company provides based on current printing technology.
5. Who are potential complementors or partners? Why would they be interested in us?
Our entire business plan is about the partnering up with individual printing shops and printing factories. They will be interested in our plan as follows. First, we are sending deals to them. Recalling more than three printing shops located in Yonge&Bloor intersection, we can see how competitive the printing industry is. The individual shops are basically only catching the residents and office in that area. ATPS are expanding the business area to entire city if we find the shop’s service/ location are matching the customer’s demand. It is a value-added asset to individual shops to be known under a city-wide network. To the large printing factories, the deals requested by ATPS may be accounted to be small size, but we would continuously send the deals and the total volume would be significant compared to those one-time printing work.
Meanwhile, ATPS is providing delivery service. Either can we do delivery ourselves by hiring employees, or partner up with delivery company in the future. One of company’s focus is being fast. Despite the uncertainty involved with specialized delivery firm, ATPS would prefer to operate the delivery service within the company, but outsourcing is still an open option in later period.
6. How will we build and sustain competitive advantage in our market?
First, ATPS must keep long-term customer relationships. Being a service company, the customer satisfaction is essentially the key to success. ATPS has to continously provide fast, cheap and high quality printing. It requests the long-term partnership with local printing shops and keep expanding the number of shops in the area in first place. Another essential point would be intensive promotion among the targeting customer groups. Running a website, and paying for a high rank in search engine would part of promotion package. ATPS should first keep the good reputation in the industry and second have intensive promotion.
7. What additional information do we need about our market? Remember that to be convincing it is essential to do primary market research with players in your market.
In order to be competitive, we must know the customers’ willingness to pay for our service, and how printing shops are appreciating our business. Market research should be focused on shops-visiting. We could either customize the percentage of commission charge with each shops or set a standard to categorized groups.
4. Marketing & Sales
1. What is our pricing strategy? What is important in determining our price (e.g. image, the competition, gross margins)?
Our pricing structure mainly focuses on the printer shops’ price structures since we share the final profit with printing shops in a fixed percentage. Prices vary greatly since customers can choose the exact dimensions, print technique and paper type for each job. However, our service can guarantee that we are offering low prices and greater discounts depending on customer’s order volume and their needs. For example, our service appreciates that printing documents and pictures can be an expensive subject for students. Therefore, we would like to offer a 20% discount on all of our services to student who register with us (please note that students may be asked to provide a valid photo ID or student card).
2. How will our product or service be sold? What distribution channels will we use? Why did we choose these channels (e.g. expertise required, cost, reduction of channel conflict)? How will we gain access to them?
We are going to set a formal website. Customers can make orders online. Products can be either delivered or picked up by customers. Customers can upload, customize and submit the documents from wherever you are, whenever it is convenient to you. In addition, customers can choose from a variety of binding and finishing options to take your documents from good to great. As soon as we receive the order from customer,We will have your final documents printed at the store nearest your home, your office or your travel destination within downtown Toronto, or have them shipped directly to you. Same-day delivery can be guaranteed only if the orders are placed before 12:00pm. And we are going to have an office where our sales force works and where customers can pick up orders from if they need to. We aim to maximize customers satisfaction with us by guaranteeing the fast, convenience, low-price but high-quality printing service. Our supplier network is print shops. The advantage we have is we can provide consumers and volume that printer shops usually do not have. For the print shop, they do not hire sales people as their sales people are their customers. They rely on word of mouth and convenience for the business. We would provide a larger network of customers that only a sales force would provide.
3. What is our communications strategy? How will we communicate the benefits of our product/service? How will we advertise and promote it? Why is this strategy effective for our target market?
First of all, we will set up our own official website. At the same time, we will list some key universities, colleges in downtown Toronto. And communicate the specific departments or we can distribute our flyers in their campus. Student is an important sector for our customer base since they are quite price sensitive relatively. Our “low price guarantee” is a best option/attractiveness for for students’ needs. Moreover, business company is also our important target since they need to print out plenty documents and papers for work and conference everyday. Our “fast print and high quality” service will greatly satisfy business company’s needs. Besides communicating the specific departments, we will also communicate with some famous office supplies chain such as Grand&Toy. Those office supplies such as Grand & Toy is commonly focus on aiding businesses by selling products such as school supplies, office supplies, office furniture, meeting supplies, computer supplies and professional services. Therefore, we will provide our flyers of our printing service to those stores and use those office supplies chain to make advertisements for us.
4. What additional information do we need to develop a marketing plan?
We need to understand our proposed business environment, namely, do extensive research in the printing industry, why and how the printing industry is structured the way it is, and how cost and revenue structures are set up for individual vendors. With this information, we can more accurately establish fees and set prices that are in agreement with our partners as well as provide value added services to customers who are not being best served.
5. Operations
1. Which operations are critical to the success of our business? Which are secondary?
The most crucial operation for our business is creating a network that efficiently connects small/medium sized businesses with local shops. Through our network, our customers should be able to get the product they want in a discounted price. Our secondary factor that is important for our business is the timely delivery and printing process for our customers. As customers will be using our service mainly for the purpose of getting the right product on time, it is extremely important that there are not any delays and we deliver the product on time.
2. How will we produce and deliver our product/service? What will we do in-house, and what will we purchase (make vs. buy)? How do our unit costs compare with our unit revenue?
The very first step would be building a network of local printing shops around Toronto area. We will be contacting each individual print shop and offer them an incentive for being in our network. As we are combining orders from greater number of small businesses, print shops will be having greater quantity of orders to be printed. Once we create the network we need, through marketing, we will be having customers who are willing to print variety of items at discounted prices. There will be no cost for us to incur per unit as we are not the one who are printing. We are merely a link between two parties, and our revenue comes from taking certain percentage of sales of the printing shops.
3. What is essential to get right operationally to deliver our marketing plan (e.g. trade-offs among cost, quality, timeliness, flexibility)?
In order to effectively deliver our marketing plan, it is critical to have an efficient network that connects individual print shops. Each print shop must understand the importance of completing the task in a timely manner as this is one of our core value propositions. Another factor that plays a critical role for our operation is guaranteeing mass orders to be printed for our network of print shops since this is the only incentive for them to offer us a discounted price. Thus, timely delivery and completion of print jobs at reduced cost must be implemented for satisfying customers’ expectations.
4. What type of physical facility do we need? Does it allow for expansion?
As sound relationship with our network and customers is a core value for our business, there are very few physical facilities required for operating the business. Our value comes from linking small scale businesses and print shops in a most effective way that would minimize major costs for both parties. However, it is still extremely important to have an office where our employees would combine orders from our customers and operate them in an organized manner.
The increase in the number of network will allow for our business expansion. We will be able to connect customers from outside of Toronto with our network and offer them a discounted price for printing certain items once we have enough printing shops in our network.
5. What type of R&D facility do we need? What % of sales do similar firms spend on R&D?
Considering the nature of our business, only minimum investment for Research & Development is required. The majority of the investment will count towards managing our network of print shops more effectively as this is our main operation.
6. How will we develop relationships with suppliers?
We are the suppliers of printing shops as we are collecting orders from each individual business and providing the work for each printing shop. Thus, we do not have any suppliers. However, it is still important that we have a sound relationship with the printing shops. They must understand the importance of delivering product on time as any delays will deteriorate our value and may lead to lost in trust from our customers.
7. How will we recruit, train and compensate the necessary labor force?
The recruitment process involves discovering people who are extremely organized and efficient when completing their tasks. As our business model includes delivering products on time in a most cost effective way, the timeliness is a key aspect when recruiting potential employees. They will be first trained to manage great quantity of order inflows from many local businesses. The next training will involve improving negotiation skills with our network of print shops. Since we are guaranteeing lower price for our customers we cannot let each print shop to make a pricing decision. Thus, the ability to negotiate with printing shops is critical when training our work force as offering the greatest deal is one of the big incentives for using our service. For compensation, each employee will be contracted and will be receiving monthly salary plus bonus.
8. What additional information do we need to understand how we’ll operate the business?
Before creating a network of print shops, detailed information about each print shop around the city of Toronto as well as the location of each of shop play a vital role when operating our business. The information for each print shop matters as we must know what type of printing services they are delivering as well as what promotional strategies they are implementing in order to attract customers. We must combine the entire information related to the type of services and promotions and be able to offer it to our customers. Lastly, as we are also delivering the final product to our customers, it is extremely important to be aware of the proximity between customers and print shops. This allows us to estimate the amount of time that would be required for delivery. Thus, timeliness of our delivery system can be guaranteed.
6. Start-Up
1. What must be done before we can introduce our product/service to the market? What is our timeline?
It is paramount that we establish our printing network and build close and valued relationship with each of our vendors in our proposed geographic location. Our proposed network of the downtown Toronto area, must provide maximum reach for our target market providing a variety of services. In addition, we must establish an organizational mission statement with clear direction and goals for long term flexible growth and sustainability that is in alignment with ourselves, our vendors, as well as our customers.
With a network firmly in place, our next task would be to locate an office for our procurement, marketing, and sales teams.
Our estimated time line is between 4-6 months, with an emphasis placed on a 4 month deadline, allowing time for setbacks and unforeseen events.
2. What essential resources and capabilities do we lack? How can we acquire them?
None of us has existing network within the printing industry. Since we are partnering with individual printing shops and factories possibly, the mutual trust should be built between ATPS and our partners. One possible way is cold calling through store visits, showing our passion and responsibility.
3. What are the one-time start-up and development costs of the venture?
We our purposing to bootstrap our business venture to cover our initial costs of building and office costs, including incidentals, liabilities, and insurance, as well as web development costs. In addition, the partnering entrepreneurs will spend their own time as sales staff, cold calling neighbouring businesses in our proposed geographic area, and pitching our ideas to local vendors to partner in our print shop network.
4. What additional information do we need to understand and cost the start-up of this venture?
We need to understand the cost and revenue structure of the printing industry to adequately exploit price discrimination as well as implore measures where our vendors have incentive to partner with us. It is paramount that our vendors are satisfied and are in agreement with our business venture.
7. Big Picture View
Now that you’ve considered many aspects of your venture concept, take some time to think about the big picture. The concept may have evolved from the time the CEO submitted their Venture Concept Analysis. Re-visit the uncertainties associated with the opportunity and rank the 3-5 uncertainties that are most critical to resolve. Identify how you can investigate your most important hypotheses before the business plan is due at the end of the course.
1. One uncertainty we face is whether or not consumers will choose to use our business service instead of getting stuff printed out themselves. This is especially true with the boom of the online sales industry where people can order things online with just a click. However we feel this affects large corporations and the consumers we are targeting will still use our service. First off even if you can order things online, it takes time to go and pick it up (which we can do for them). This is especially true if you have to go from store to store to get different things picked up. We are also willing to go from store to store to get the best deals in Toronto from each shop and provide them to the consumer. Finally by taking all of our consumers and putting them “together” we can get bulk deals that our customers would otherwise not get.
2. Another uncertainty we have to visit is whether or not we have the resources to start up our business. Costs such as renting office space in downtown Toronto will be very expensive and costly. However we feel that our other costs will be relatively low compared to most new companies and we believe that our idea will be able to get financing help from other sources if we need it too.
3. A third uncertainty is the fact that the print shops in Toronto may not want to work with us to provide us better deals. This is still something that we are looking into as we are doing research on the venture idea, but we feel that in the business world, these shops would be doing bad business to refuse to work out deals with us if we keep on providing them with large amounts of business. Whether it be through contracts, retainers, or other ways, we feel that we will be helping provide more business to these print shops and they in turn will provide us with more deals that will help us attract more customers.