Colorscope, Inc. which was founded by Andrew Cha in 1976 operates mainly in the pre-press house or “color separator”. It has achieved an impressive sales performance. With Colorscope peaking in 1988 with 5 million dollars sales, Donnelley, the largest printer in the world, offered to acquire Colorscope for approximately 10 million. However, it is because Cha’s overconfidence in his existing base of high-margin clients and ignorance of the business trend, Cha declined to accept this acquisition.
The graphic arts industry has seen dramatical business changes over the years. With the rapid development of such technologies as desktop publishing and the World Wide Web as well as the consolidation of several major players within the industry, the company now has to reconsider its market positioning and operation.
In the following we will analyze Colorscope Inc. from the SWOT perspective, then we will come up with some recommendations for its future developments. Strength
The company has built solid relationship with highly valuable print and pre-press buyers in the marketplace and really done a good job in the business processes and training methods. Colorscope’s operators were cross-trained and could work effectively on any stage of the production process. Weakness
The stock shares were largely owned by Andrew Cha himself, which is not good for the decision-making mechanism. When it comes to critical decision-making point, it is impossible for Andrew Cha to consider all the aspects of the problems and get the hang of the industry trend.
Cha currently do not have a sales infrastructure similar to those competitors who operates with loose affiliations to other printers and advertising agencies.
Colorscope was unable to adopt expensive accounting systems or to hire consultants to design a state-of-the –art activity-based cost system. Opportunity
In the commercial printing business for catalogs, there were only a handful of...