Three Horizons Framework
for Printing (ISIC 1811)
The Printing industry faces significant 'Market Obsolescence & Substitution Risk' (MD01) due to digital alternatives and intense 'Price Competition' (MD01). To survive and thrive, print businesses must simultaneously optimize current operations, expand into adjacent services, and explore entirely...
Strategic Overview
The Printing industry is currently grappling with significant disruption, marked by a 'Shrinking Core Market & Revenue Decline' (MD01) and 'Intensified Price Competition' (MD01). The Three Horizons Framework offers a structured and comprehensive approach for print businesses to navigate this challenging landscape by managing growth and innovation across short-term, mid-term, and long-term timeframes. It moves beyond incremental improvements, advocating for a balanced portfolio of initiatives that secure current profitability while simultaneously exploring and building future revenue streams.
Horizon 1 focuses on optimizing existing operations, enhancing efficiency, and defending core business profitability, which is essential given 'Margin Compression' (MD03) and 'Cost Management Complexity'. Horizon 2 involves investing in new, adjacent growth areas, such as advanced digital printing, specialized finishing, or value-added marketing services, to adapt to evolving customer needs and combat 'Undifferentiated Offerings' (MD07). Horizon 3 is dedicated to exploring truly disruptive innovations like printed electronics or 3D printing, which may redefine the industry in the distant future, directly addressing the 'Need for Diversification & Reinvention' (MD01).
By systematically allocating resources and attention across these horizons, print companies can mitigate the 'Market Obsolescence & Substitution Risk' (MD01) and the 'Technology Adoption & Legacy Drag' (IN02) that often plague traditional industries. This framework ensures that immediate operational needs don't overshadow long-term strategic imperatives, fostering a culture of continuous innovation and resilience against market shifts.
4 strategic insights for this industry
Horizon 1: Operational Excellence in Core Printing
For many print businesses, Horizon 1 is about maximizing the efficiency and profitability of existing offset and traditional digital print operations. This means implementing Lean manufacturing principles, optimizing 'Cost Management Complexity' (MD03), and managing 'Capacity Management During Peak Loads' (MD04) to counter 'Margin Compression' (MD03). Focus is on sustaining cash flow and funding future horizons.
Horizon 2: Strategic Investment in Digital & Value-Added Services
Horizon 2 involves investing in new capabilities that extend the current business model. This includes advanced digital print technologies (e.g., variable data printing, specialized substrates), expanded finishing options, or integration into adjacent services like design, direct mail marketing automation, or fulfillment logistics. This helps counter 'Undifferentiated Offerings' (MD07) and creates new revenue streams, addressing 'Shrinking Core Market & Revenue Decline' (MD01).
Horizon 3: Future-Proofing with Disruptive Technologies
This horizon focuses on exploring entirely new markets and technologies that could fundamentally alter the printing landscape. Examples include additive manufacturing (3D printing services), printed electronics, smart packaging, or bio-printing. These initiatives require significant 'High R&D Investment & Risk' (IN03) and may not yield immediate returns but are critical for long-term survival and avoiding 'Market Obsolescence & Substitution Risk' (MD01).
Balancing Capital Expenditure and Skill Development
Across all horizons, print companies face challenges related to 'High Capital Expenditure Requirements' (FR06) for new machinery and technology, alongside the need to bridge the 'Critical Knowledge & Skill Gap' (CS08) for operating and selling these new services. Effective management requires careful financial planning and robust talent development strategies.
Prioritized actions for this industry
Establish a dedicated 'Horizon 1' task force for continuous operational improvement.
Focusing on Lean manufacturing, waste reduction, and process automation in existing operations is critical for maintaining profitability in a 'Persistent Price Compression' (MD07) environment, ensuring a stable foundation to fund H2 and H3 initiatives.
Allocate a fixed percentage of annual revenue (e.g., 5-10%) towards 'Horizon 2' investments.
Ring-fencing funds for H2 ensures consistent investment in growth areas like advanced digital print, specialized finishing, or integrated marketing services, directly addressing the 'Need for Diversification & Reinvention' (MD01) and avoiding 'Undifferentiated Offerings' (MD07).
Form strategic alliances or R&D partnerships for 'Horizon 3' exploration.
Given the 'High R&D Investment & Risk' (IN03) associated with disruptive technologies, partnering with research institutions, startups, or technology providers reduces individual company risk and allows for shared learning and access to specialized skills (CS08).
Develop a talent development program focused on future skills for H2/H3.
Addressing the 'Critical Knowledge & Skill Gap' (CS08) through targeted training, recruitment, and partnerships with educational institutions is vital for successful adoption of new technologies and services, reducing 'Skills Gap & Workforce Retraining' (IN02) challenges.
From quick wins to long-term transformation
- Conduct an internal audit of current print operations to identify immediate efficiency gains (H1).
- Perform market research on emerging print technologies and customer needs for adjacent services (H2).
- Designate an 'innovation champion' or small team to lead horizon discussions.
- Invest in a pilot digital print technology for specialized applications (H2).
- Launch a new value-added service (e.g., cross-media marketing, advanced finishing) to test market demand (H2).
- Create cross-functional teams to manage projects across different horizons.
- Establish a dedicated R&D unit or formal partnership for exploring H3 technologies like printed electronics or bio-printing.
- Develop a structured innovation portfolio with clear metrics and funding for each horizon.
- Integrate sustainability metrics and goals across all three horizons, from H1 waste reduction to H3 eco-innovations.
- Under-investing in H2 and H3 due to a disproportionate focus on current profitability (H1), leading to future obsolescence ('Market Obsolescence & Substitution Risk' MD01).
- Failing to ring-fence budgets and resources for H2 and H3, leading to projects being starved of funds.
- Organizational resistance to change and fear of cannibalizing existing revenue streams.
- Lack of clear metrics and governance for innovation projects across different horizons, making it difficult to measure success and adjust strategy.
Measuring strategic progress
| Metric | Description | Target Benchmark |
|---|---|---|
| Horizon 1: Overall Equipment Effectiveness (OEE) | Measures the efficiency of printing equipment, reflecting productivity, performance, and quality. | >85% (World Class) |
| Horizon 2: Revenue from New Products/Services | Percentage of total revenue derived from offerings introduced or significantly enhanced in the last 1-3 years. | >15% annually |
| Horizon 3: Number of Pilot Projects/Partnerships | Count of experimental projects or collaborations exploring truly novel technologies or business models. | 2-3 active projects annually |
| R&D Spend as % of Revenue | Proportion of revenue reinvested into research and development across all horizons. | >5% for growth-oriented firms |
| Employee Skill Gap Reduction | Measure of the decrease in the difference between required skills for new technologies and existing employee capabilities. | 10% annual reduction |
Other strategy analyses for Printing
Also see: Three Horizons Framework Framework