Rr Donnelley & Sons: the Digital Division

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RR Donnelley & Sons: The Digital Division I. Traditional vs. On-Demand Digital Printing How do the characteristics of Donnelley's traditional printing business compare with the characteristics of on-demand digital printing? R.R. Donnelley and Sons traditional printing business pricing varied depending on the number of pages in the print job. The prices per page decreased as the number of pages increased. The traditional print business consisted of high fixed costs and low variable costs. Offset presses cost approximately $12 million using film and plates with runs of 25,000 to 500,000. The gravure print was more expensive and used etched copper cylinders and would run 500,000 or more. The digital presses were more…show more content…
Prior to April 1994, there were several challenges to meet. The company needed to research if it could keep its traditional competitive advantage with print economies of scale (it was found that they could). “Costs were higher than expected: the presses were expensive, required skilled and dedicated operators, and used more toner than anticipated.” Finally, there were issues with selling the idea of digital print medium to internal divisions. “Internally, people thought digital was a good idea but no one wanted it because it was outside their core business. They all had some potential digital work, but didn’t know enough about the markets and were scared of an unproven technology. Customers, on the other hand, almost jumped up and down, even though they too didn’t know what to do with the new technology, or were themselves just starting to convert to digital format.” In other words, there were challenges moving the leadership from the old business model thinking into the new tech future. The basic task was to find out if the new model could work and still keep the competitive advantage and then sell the divisional leadership on adopting the new technology and the new business model. “Between January and April 1994, seven teams worked to reengineer the processes of the corporate center” and there were a new set of challenges and issues to overcome. The reengineer group quickly discovered that “all the tech processes were adhoc and projects were no

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