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Commentary & Analysis

FREE SPECIAL: The NEW Danka: Revitalized Investment Grade Focus

Danka&

By WhatTheyThink Staff
Published: April 30, 2002

Danka’s new management team was kind enough to host a very informative breakfast for the press at On Demand. Todd Mavis-U.S. Group President and COO and Don Thurman-Chief Growth and Marketing Officer are not only new faces, but purveyors of new ideas and strategies to rejuvenate Danka’s business, perception and customer relations. Thurman told attendees of the new corporate emphasis: controlling expenses, providing better customer support and maximizing shareholder value. He discussed Danka’s significantly improved financial situation, but did not provide any guidance.

Historically, Danka wanted to be the biggest, but made some mistakes coupled with financial difficulties, and didn’t have the best "go-to-market strategy", Thurman told the audience. Lang Lowrey, Danka’s new CEO, was brought on board last June, laying a new corporate strategy: "implement guiding principles, refocus on employees, refocus on customers, and remember we work for the shareholders". Lang also laid out a new business, focused on generating cash, a positive balance sheet and significant debt reduction.

Corporations have printers geographically spread all over, with no device management. According to Thurman, Danka will focus on assisting companies manage devices at the desktop, leverage their technical abilities and implement a number of new programs to allow migration form "being a box seller to a value added solutions partner. Danka will become less focused on machines and refocus on the value of customer documents, becoming an investment grade stock, in the process."

Todd Mavis, billing himself as a "turnaround" person, told us that since August, a new reporting structure and 90 personnel have been added; and they will soon announce a new Senior VP of professional Services. The new organization has a new market focus, geared to accountability, profitability, responsiveness, strategic alignments and ROI.

Mavis discussed ten key areas where Danka will focus:

1. Customers to rave about Danka,
2. Increase hardware gross margin,
3. Increase number of PSUs sold,
4. More color and Danka @ the Desktop,
5. More balance between revenue and geographic distribution,
6. Significantly increase strategic account base,
7. Increase the number of service contracts,
8. grow multi-vendor services,
9. Reduce SG&A,
10. Increase connected devices by 50%.

The fresh focus will center around two customer groups. Danka Touch concentrates on the Total Lifetime Value of the customer, acting pro-actively. Reactively, the Customer Care Czar, who heads up the Customer Care organization, sees to it that issues and problems are resolved as favorably and as quickly as possible.

Another prime focus will be corporate consulting. Corporations spend between 6-8% of annual sales on printing, and Mavis believes Danka services can reduce a company’s overall printing costs by 40%. Mavis cited a Lehman Brothers survey which reported, "Printing facilities are one of the most under managed assets in any company, and provides easy cost savings for any organization". Mavis sees Danka moving "beyond copies to professional consulting by promoting the benefits of color documents"

Sam Errigo, VP of High Output Solutions Group focused his presentation on Danka’s new corporate connectivity and reporting program-Danka @ the Desktop. He indicated this new thrust will assist in solving the DocuMESS problem all vendors helped create, by harnessing corporate output devices. "Since desktop and workgroup printers come in under the CapX radar, true print costs aren’t captured." Errigo cited the following costs to illustrate his point. "Per page costs at the desktop are $0.065, in a workgroup environment $0.02-0.04 and production printing $0.01-0.015. By identifying these costs and controlling them, immediate savings can be realized."

 

 

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