Strategic Management

Running head: STRATEGIC MANAGEMENT: EPSEN HILLMER GRAPHICS

Strategic Management: Epsen Hillmer Graphics

Amy Carver

University of Phoenix

Strategic Management: Epsen Hillmer Graphics

Keeping up with technology can be difficult for any company, but especially one that is unsure about its future. Maintaining technology amongst great competition may be the only way a company can survive. Assessing Epsen Hillmer Graphic's external environment, including both the competitive and the general contextual factors (Pearce-Robinson, 2004), shows that the company needs to take advantage of advanced printing methods. Computerized printing without the use of plates will allow Epsen Hillmer to produce labels with less color variation, shorter lead times, and less overhead.

Situation Background

Epsen Hillmer Graphics, once a leader in the label printing industry, needs to find a way to regain a presence in the domestic market. Currently, they are struggling to stay competitive with other private label manufacturers, the top five each generating total label sales of at least $100 million (Freedonia, 2000). Epsen Hillmer Graphics has been struggling since the strike of the Litho Union and subsequent sale of the litho division.

Epsen Hillmer needs to take advantage of better technologies in the label printing industry. Currently the company provides litho, flexo, letterpress, silkscreen, and combination plate printing with varnish and lamination capabilities to meet the needs of their current custom label customer base. Litho printed labels are found on juice bottles such as Apple Tree and Langer's Juices. Flexo printing is often used to print simple labels such as meat, bakery, and deli merchandising labels; EHG stocks many of these labels. Letterpress is used in a great deal of four-color process work (4CP), this would include Campbell's Foodservice labels, Dannon Whips labels, and Seminis Seed labels. Silkscreen is often used on shampoo products, such as Alberto-Culver's labels, to provide a pop to the label. These are all plate printing methods, which are often used to reduce overall costs for the customer; however, the plates wear out and break and need to be maintained for best print capabilities. When the plates deteriorate they can be greater color variation in the labels, which makes customers unhappy because these labels are their product image. The steps that need to be taken to prepare a plate job for print can take a great deal of time, which can be detrimental to Epsen Hillmer Graphics because many of the customers work in just-in-time (JIT) and don't allow for a lead time of 3-4 weeks before their labels are even shipped.

Problem Definition

Epsen Hillmer Graphics (EHG) is facing many business problems and most likely will not survive if they are unable to meet customer demands through the use of better technology. In the past 7-10 years, EHG has pinned all its hopes on the roll label division, which did not provide the revenues that the litho division has in the past. The company has no strategic advantage, and relies heavily on customer loyalty to stay afloat. A strategy reflects a company's awareness of how, when, and where is should compete; against whom it should compete; and for what purpose is should compete (Pearce-Robinson, 2004). The opportunity here for EHG is to evaluate their long-term objectives and determine whether it is in their best interest to invest in advanced printing methods.

Risk Assessment and Mitigation

Epsen Hillmer Graphics would face risk by attempting to capitalize on this opportunity. Computerized printing, when compared to plate printing, looks flat so there is a potential that customers will be unhappy with their labels. In order to negate this EHG could provide samples of both printing methods and perhaps have the customer sign a memorandum of understanding that the labels will not look as three-dimensional when computerized printing is used. A large push for the use of computerized printing is the reduced lead times, however, this may not happen as the finishing department would become backed up. After running through a computerized printer the labels still need to be die cut and the matrix (waste area around the label) still needs to be stripped. A way around this would be to re-assign