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Commentary & Analysis

Times they are a Changing!

he EAGLE'

By WhatTheyThink Staff
Published: August 1, 2006

he EAGLE's Musings on current events in the digital & wide format marketplace Commentary by Steve Aranoff & Robert FitzPatrick, The EAGLE August 1, 2006 -- In our first column in OnDemandJournal, we focus on contrasting the efforts of two old "printing" distribution power houses as they attempt to grow in the digital world. * Pitman and Charrette * Enovation, Fuji PhotoFilm and Wide Format Printing Pitman and Charrette: Who would have thought that the country's ostensibly largest Graphic Arts Dealer (depending upon whom you ask), Pitman Company, would now also be the country's largest dealer to the graphic design community? Its recent purchase of Charrette significantly changes the landscape for Pitman and for the industry as a whole. Quietly growing from a regional New England firm selling analog supplies to graphic designers, engineers and architects, Charrette had purchased numerous dealerships around the country to give it a national presence. It has stores, warehouses and personnel strategically located through the country in 17 locations. Charrette had, in essence, become the "Pitman" of the graphic design market. Pitman, a bulwark of selling to the larger offset printers and to newspapers will now be up to its eyeballs in small shops. On the other hand, Pitman, a bulwark of selling to the larger offset printers and to newspapers, was rarely known to approach the smaller printer. Through Charrette, it will now be right up to its eyeballs in small shops. PrintNation.com had made a big deal during the dot.com boom that it could efficiently reach the 80 percent of the customers that Pitman and the other dealers found too small to sell. Instead, PrintNation.com found that this 80 percent only bought 20 percent of the market's goods and did so in a disorganized and penny pinching manner--with little loyalty. Are graphic designers different? Were they a profitable market segment? Seeing how Pitman operates with Charrette, taking advantage of their expertise, learning from them, or teaching them how to operate, will be very interesting to watch. So far, Pitman says it will leave them to run as a separate operating division, but then again, most companies say that for the first year. After that, the temptation to "fix" things seems to get too great, as company cultures begin to clash and the business model doesn't look quite as good as the promise. Pitman's actions show that it plans to exploit Charrette's customer and knowledge base in wide format. Despite its "reputation" as the elephant of the industry, Pitman has already had some expertise in dealing with smaller purchasers. It was the one who had purchased PrintNation's technology and used it to revamp the Pitman website, while keeping the printnation.com site as well. Through these sites as well as a professional telemarketing operation, Pitman has done a reasonably good job of giving small customers a way to buy from it without having to send hordes of sales people into the fray. Perhaps it is this knowledge that has given Pitman a warm and fuzzy feeling about moving full bore into the design marketplace, which is probably more heavily small buyers than in the print market. And, of course, this is a major opportunity to beef up Pitman knowledge and products in the sales of small to medium sized wide format printers with its associated supply business. So despite statements that seem to the contrary, Pitman's actions show that it plans to exploit Charrette's customer and knowledge base in wide format, to expand Pitman capabilities. Enovation's Wide Format Division : On the other side of the spectrum, Pitman's major competitor, Enovation, has decided to develop its wide format capabilities by setting up a new division under Fuji veteran Steve Bennett. Using its customer and partner base, Fuji is developing a line of products aimed, it seems, at better supporting its customer base's move into wide format than in making new market strides. It's not that this is a bad way to go; it's just that it doesn't seem to give the new Fuji Graphic Systems as much of a push as Pitman's decision, to make a major status and size change in its customer base, or in its core expertise. Fuji is developing a line of products aimed, it seems, at better supporting its customer base's move into wide format than in making new market strides. We have all watched as Enovation carefully replaced much of the distribution expertise and leadership it had gained from the purchase of its distributors with knowledgeable people from its Graphic Systems organization or with second tier managers from acquired companies. On the other hand, Fuji always intended to close its Graphic Systems Division and use Enovation as its graphic arts entity in North America and it is that consolidation effort, led from the manufacturer side that caused most of the problem. Little did they know that allocating jobs would become such a huge factor in building their new business model. Perhaps, having learned from that situation, where they are now changing the name back to Fuji Graphic systems (or some variation using the Fuji brand name), Fuji may have realized that they are not well prepared to execute an acquisition where they need to learn from the company being acquired. That is not to say that Fuji isn't making good strategic purchases of other manufacturers/dealers as it has done, for example, with Sericol and more recently with its purchase of Avecia and the Microelectronic Division of Arch Chemical, giving it additional ink jet consumables and technology and more recently the parent of Spectra, one of the major ink jet head manufacturers used by many printer competitors including VUTEk. Fuji may have realized that they are not well prepared to execute an acquisition where they need to learn from the company being acquired. With these acquisitions of manufacturing operations, it appears that Fuji Photo Film intends to be one of the world's leading suppliers of consumables for the inkjet printing market. Leaving these companies as separate operating divisions from their Graphic Arts Distribution capabilities seems to have worked well for them, but seemingly doesn't help with the new Wide Format Division of Fuji/Enovation at this point. Beginning with this issue, Eagle Musings will appear twice each month in On Demand Journal.

 

 

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