Special Report: What Does Quad's Worldcolor Acquisition Mean to the Marketplace?
For publishers, the greatest worry isn't precisely Wall Street pressure but profitability pressure from any quarter. For decades, printers invested in new technology that just happened to help both printer and publisher. Yields were improved while quality and consistency were enhanced. Today, printers don't have to invest in new technology to compete on quality or features, not least because the equipment suppliers themselves face a dwindling market and have less motivation to innovate. Capital spending at any printer today is under pressure to deliver quick, substantial savings in manufacturing costs. No one looks at it from the customer's point of view. The danger for print buyers is that the price world we wanted is based on commodity buying, and now we've gotten just what we asked for. But buying a commodity doesn't include improving anything about that commodity except the seller's cost to make it.
INBOX: Are there some advantages to combining the Worldcolor and Quad cultures, or are these two companies so starkly different in their approach to sales, customer service, growth strategies, and the application and acquisition of technology that they can never fuse harmoniously?
MAG EXEC: I wonder if Quad is biting off more than it can chew. Worldcolor is a bigger company, with more plants and more business segments. Quad could learn a lot from Worldcolor about things like managing through adversity, consolidating plants, and some administrative areas where Quad is weak such as estimating and invoicing. But whether it will is another question.
D. EADWARD TREE: You can't change unless you recognize that you need to change. That's why I think the Worldcolor people are more adaptable than the Quad folks; the company has changed rapidly, and the Worldcolor folks realize that more changes are coming. Quad sometimes suffers from "Not Invented Here" Syndrome, which causes it to develop great innovations but also to be a bit arrogant and not learn from competitors. If the Quad folks think they can just swallow Worldcolor without rethinking how they run the business, they are in for a rude awakening.