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PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
4.Make sure your writing is clear, concise, and in an organized manner; demonstrates ethical
scholarship in accurate representation and attribution of sources; and displays accurate spelling,
grammar, and punctuation.
Use The following format:
•Cover page
•Executive Summary / Abstract
•Table of Contents
•Introduction to Company (each subsection should be an assessment)
o Value proposition
o Market position
o Competitive advantage
•External Environmental Scan/Five Forces Analysis
o Current environment
o Assessment of external factors applying five forces
•Strategic Issues
o Label each issue and provide a header and the reason for why it is an issue
o Summary / Key Findings and Recommendations
Apply APA standards to citation of sources. By Friday, September 28, 2012,
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PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Preliminary Strategic Audit—Vista Print
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PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Abstract
Vista Print is one of leading online printing firms with a presence in the most important
markets in the world today. Its offices in the United States, Europe and Australia total almost
a million square feet of printing space. The unique selling point of Vista Print is the use of
patented technology in combining and matching orders using a high degree of automation.
Using an enviable model of self-service ordering on the front end and integration,
collection, standardization and semi-automation on the back end yields an efficiency that can
hardly be beat. The company holds multiple patents on the entire process chain. Mass production
in this fashion yields to it significant advantages of economies of scale.
However, the ground situation is changing. The printing industry is slated to shrink as
digitization takes over our lives. In such a situation, the company needs to rebuild its product
portfolio and rebrand itself as a versatile company that would keep pace in the future as well.
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Table of Contents
Introduction to Company ……………………………………………………………………… 4
External Environmental Scan/ Five Forces Analysis …………………………………………. 5
Strategic Issues ………………………………………………………………………………… 7
Key Findings and Recommendations …………………………………………………………. 9
Conclusion …………………………………………………………………………………….. 11
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Introduction to Company
Vista Print is one of those original, pre 1997 internet companies that successfully
maneuvered through the dot com crash. Founded in 1995, the company has steadily grown to
become the 40th largest printing company in all of North America. The company also holds the
distinction of being the fourth fastest growing printing company in the same region. For the
fiscal year 2012, the company had revenues exceeding a billion dollars ($1020.3 million USD) a
significant 25 percent increase from last year. Additionally, the company has over 3,700
employees.
Value Proposition
The most direct value proposition is that the company can mass customize for its
customers who are principally micro-businesses. These businesses as well as individual
customers had long been sidelined in the printing industry catered most toward heavier, larger
clients. Vista Print built a business around these underserved categories to the extent that
printing industry heavy weights came around to recognizing the needs of this segment (Seifert,
Leleux & Tucci, 2008).
Competitive Advantage
Competitive advantage for VistaPrint comes from the investment in mass production to
printing. Instead these techniques are applied to short-run commercial printing and personalizing
activities. Unit costs then shrink to being close to those in industrial printing. These savings are
passed on to the customers. Therefore the competitive advantage of the company is derived from
the successful shifting in the traditional cost-volume curve. Many aspects of the incredible
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
process are patented.
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Additionally, the company only has to invest in about a minute’s worth of manual labor
per order, when the industry standard is close to one hour per order. This competitive advantage
comes from making the customer take care of designing, proofing, and ordering through the
online design studio we are familiar with and controlled processing on the back end.
Market Position
Vista Print has steadily grown as a company, riding on its phenomenal economies of
scale. In addition to being one of the fastest growing printing companies, Vista Print also is the
sixth largest printing company in the world as per market capitalization. Its market position is
additionally strengthened from the offline initiatives it has recently taken.
Five Forces Analysis
The external environmental scan of the company yields positive information in general.
However, there were some negative, concerning points that needed attention.
Threat of New Competition
Threat of new competition should ordinarily have been high since in the online realm
there are but few barriers to entry. However, Vista Print is in an exclusive place protected by
patents and years after year of technical evolution. Economies of product differences with a
traditional press are high enough to eliminate all worry. The brand equity of the company is
superior and is another factor working in its favor. Capital requirements even for an online
printing firm much the way Vista Print started would come from the printing hardware and
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
maintenance requirements. Vista Print also does not rely upon a traditional distribution network,
which eliminates related liabilities. Low absolute costs and industry profits enable significant
protection for the company from new competition.
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Threat of Substitute Products
The threat of substitute products is minimal as Vista Print have expanded their portfolio
to offering an eclectic range of products ranging from visiting cards, greeting cards, printed t-
shirts, mugs, key chains, banners, posters, magnets, vinyl creations etc. The trick to eliminating
the threat from substitute products was keeping an exhaustive line to keep even the neediest and
heavy duty customers engaged under the single brand. There is safety also in passing along
savings to customers, who appreciate the advantages of mass printing. Besides prices elsewhere
are best with higher overhead costs and many online providers close to Vista Print are still
getting their act together. Switching costs are higher due to the repeat customer bonuses and
advantages the company offers. There is little product differentiation even when compared with
the best real world printers.
Bargaining Power of Customers
The bargaining power of customers is high though because more competitors are always
entering the fray. However, online companies as is appear to operate in a horizon where
customers have won, or are king indisputably. Therefore, the bargaining power of customers is
quite an established fact, around which Vista Print has built its low overhead, bulk-printing
model. Something that works in the company’s favor is that this bargaining power works against
all competitors equally (Stelzner, 2006).
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Bargaining Power of Suppliers
The market of inputs is beneath Vista Print. The company is a high volume enterprise
that easily arm twists the market of inputs. With its international expansion having been
completed, there is no dearth of suppliers. The company already has extensive warehouses in
North America, Europe and Australia and deals with a wide selection of suppliers owing to the
spread of the operations. Supplier switching costs are minimal, with a little degree of
differentiation in inputs. The distribution channels are strong and heavily invested in the
company as the company deals directly with them with no agents.
Intensity of Rivalry in the Industry
The intensity of rivalry is enormous because Vista Print is seen as an outsider in most
markets outside France. However, Vista Print counters the competitiveness via sustained
innovation. Competition on the other hand with offline companies is turning into a kind of
alliance where companies like Staples and Office Max have white labeled Vista Print and opened
kiosks for them in their stores under their own brand names. This goes on to reveal the extent of
awe the industry has Vistaprint’s its procedures, technology and methodology.
Important Strategic Issues Facing Vista Print
Important strategic issues facing the company have derived from its size as well as its
unique position. Issues may also be grouped via their theme, for example legal issues, tax related
issues, patents, technology, brand image etc.
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Incorporation
Vista Print used to be a company incorporated in Bermuda, widely known as a tax haven.
Meanwhile subsidiaries were cropping up all over Europe, Americas and Asia. However, the
company chose to re-incorporate itself in the Netherlands and setup headquarters in Paris,
France, citing historical roots of the founder and current CEO, Robert Keane. Current issues of
liability arise out of the financial policies of the newly elected French government in particular
and the prevailing wave of socialism. These policies including proposed taxes of up to 75
percent in the corporate realm will obliterate margins and dissuade innovation. Therefore, in its
own best interests, the company must come up with another European haven where its
entrepreneurial culture would be cherished.
Online Sales tax
Another competitive advantage that Vista Print had in the initial years of operation
everywhere and still does in a lot of jurisdictions is that of no sales tax. Because a majority of
jurisdictions are still non-committal over whether there should be an online sales tax, it falls
within a grey area of interpretation. Whereas, real world locations do see sales tax applied and
that kind of gave the company a distinct advantage. This is soon to disappear as internet
commerce by default now is fledgling and incentives are being withdrawn.
Jurisdictions
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
In the absence of a uniformly applicable law, the company is subject to jurisdictions of
all the regions perhaps where the product is manufactured, touches, is shipped to and ends up. In
the event of a concern, liabilities can arise out of multiple jurisdictions. These threats are kind of
generic for most internet firms and Vista Print is not immune to it.
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Digital Transition
One of the biggest strategic issues facing Vista print today is perhaps the digitization of
the world around us in general. The same technology that the company uses to create real world
materials is also fueling the demise of such prints. At least within the geek circles, traditional
visiting cards are ubiquitous. Contact information today is being relayed electronically via a v-
card file, which can be emailed, messaged, beamed and faced. In fact the newest technology
would enable sharing with a mere bump, using the just released NFC technology, via a small
NFC chip embedded in devices. As the world adopts more technology, printing will shrink even
further! It is just a matter of time before printing companies will be reduced to a shell of their
actual sizes today.
Legislative Issues
Surprisingly, the company has also been embroiled in payment controversies and false
advertising charges both sides of the Atlantic. The charges have ranged from signing up
consumers to unsolicited product offerings in the United States to not including VAT and
advertising false prices in the United Kingdom. Vista print has been the subject of class action
lawsuits, for example, in Texas in 2009. There are also shareholder complaints that affiliate
revenue brought in through alternate means distorts the true revenues the company is bringing in,
in the core business.
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
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Recommendations for Strategy
The recommendations for Vista Print arise out of the biggest liabilities that were
discussed earlier.
Product development
Product development is critical for Vista Print. The company should balance its focus
between advancing order processing and printing technology with that on new product
development. The subject of research should be the replacements to its digital offerings that have
the potential to entirely revamp its business model. The company should focus on digital
products such as online designing and web banners, to replace real world advertising banners.
Just as analog watches have gotten replaced with far more versatile and superior digital ones,
articles such as brooches, badges etc. are being replaced with tiny digital widgets. Their interface
and design is the typeset of the future and the sooner Vista Print realizes this, the further ahead it
will be.
E – Publishing
Branching off from the core line of its real world publishing work, the company should
also start in e-publishing. E- Publishing could involve creating eBooks for customer manuscripts
as well as providing a platform for their marketing and acquisition. This new revenue stream and
others like it, for example social technology management will ensure that there will be nodes to
branch off in the future (McAfee, 2009). For example, getting in the e-book reader and other
gadgetry at some point of time in future. Its printing business is set for major contractions in the
future, even if there will always be some demand to meet.
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
Alliances
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The company should build stronger relationships with such retail store chains as Staples,
Office Max etc. with whom it already has a working relationship. These stores use its white
labeled technology to cater to the printing needs of their customers. Building on these alliances
could be the groundwork for a future stronger retail presence for Vista Print, if it plays its cards
right.
The company should also conclude its alliances with several aggressive affiliates that
reward leads with great values because it associates Vista Print with these companies and creates
liability for it.
Acquisitions
With the revenues at its scale, and its public status on the NASDAQ, the company should
be more bullish on acquisitions than it is (Mullaney, 2005). These acquisitions will allow it to
segregate risks and lower its center of gravity. The hottest targets of acquisitions are well
managed, lean technological companies with versatile talent teams. This technology will in the
end support VistaPrint.
Corporate Structure and Tax Issues
While not very important because it is easy to guess which way the internet sales tax
issues are headed, the company could still consider a potential move to Luxembourg or
Lichtenstein that are geographically in proximity and offer tax related incentives.
Conclusion
PRELIMINARY STRATEGIC AUDIT—VISTA PRINT
Vista Print has thus far successfully navigated its industry and has a number of patents in
its folds to prove so. Revenues are high and the high growth rate reveals the success of its
policies. Its operations have today expanded to all over the world. However, the challenges of
tomorrow would come from outside the printing industry. As it shrinks, Vista Print would have
to cautiously divorce its existing businesses in slow measures. Far greater would be the
challenge of choosing and adopting new ones. It would have to carve out alliances and step into
uncharted territory and then adapt to the new challenges. Only such a successful transition would
ensure survival in coming decades for the company.
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