A Brief History Of Dai Nippon Printing Co Ltd Business Essay

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Executive summary:

History of Dai Nippon Printing co. Ltd (DNP):

The fortune 500 company mostly deals in the printing, publishing and commercial printing business. Beginning its business with spreading ink on paper in 1876 in Tokyo, Japan, the printing giant has now diversified its business on a much greater scale. Shueisha, the predecessor of DNP printed the first book manufactured completely in Japan using western-style bookbinding. Shueisha's primary business was though printing books and magazines. With merger in 1935 with Nisshin Printing, company changed its name to the today's so called 'Dai Nippon Printing Co. Ltd.'

Tokyo headquartered company; Dai Nippon Printing (DNP) has its operations in Asia, Europe and the US and employing more than 40,000 people.

DNP has its major operations in two kinds of sectors: Printing & Beverages

The company now much diversified from its original business deals in these following business forms:

Information communication- Publishing of books and magazines, commercial printing & business forms

Lifestyle and industrial supplies- packaging, decorative materials & industrial supplies

Electronics- semiconductors, photo masks, lead frames etc. (dnp co. ltd 2010)

DNP subsidiary CHI group has a business of selling electronic books. Also, DNP owns a majority stake in Hokkaido Coca-Cola Bottling. The company employs around 39,643 employees as of march 2010. (dnp co. ltd. 2010)


1.1 Market Definition:

Global printing market carries in itself numerous fields of economy. The industry generates a wide range of products which are required by the consumer in everyday of life. It includes, daily newspapers, magazines, books, post cards, memo pads or business order forms each of them is the product of the printing industry only. Apart from these direct contributions, there are many indirect influences of printing industry on any economy, as activities like binding, embossing which do generate a considerable amount of income and employment are related closely with the printing industry. Printing industry in many ways provide products or materials to packaging and advertising industry.

The printing industry market mainly consists of revenues received by the printing companies for their services rendered to commercial end-users and media.

Market Analysis:

The commercial printing market has been performing consistently from the last 2002 to 2007. Due to the recession in 2007, the growth of the industry almost stopped and it recorded a marginal fall in 2009 but it started to recover till the mid-2010 and the trend looks to continue for the next four to five years. Many industry experts feel that the global commercial printing market is still fragmented despite visible tendencies towards consolidation. The Big Players of the industry are: RR Donnelley, Toppan Printing, Dai Nippon Printing and Quebecor and together they account for less 10% of global revenues. The presence of other big corporations definitely boosts the competition level significantly as have benefits of mass production and can compete more on price issue. The market still needs innovation and technologies to enter new areas of development to make it more subtle in the future.

External Environment:

The Conditions, entities, events, and factors surrounding an organization which influence its activities and choices, and determine its opportunities and risks are called as external or operating environment. (business dictionary 2010) The external factors of the DNP organisation are explained below.

For the better understanding of the external environment affecting the commercial printing industry, we can apply some industry related models and frameworks.

Porters' Five Forces Framework:

(Source: Google search)

Porter's Five Forces Model is one of the most celebrated for analysing any industry by any strategist or marketer. The business framework was developed by Michael E. Porter in 1979. (wikipedia 2010). The framework is applied to the commercial global printing industry keeping Dai Nippon Printing co. ltd. as the centre of the focus and through this research, the framework proves completely appropriate to the practical environment, proving its correctness in theory as well as in the practical world.

The porter's five forces framework is explained below in detail:

2.1 Competition/Rivalry:

Commercial printing market's big players such as DNP, Toppan are giving a head-on competition to each other and in this race; they are over-taking local industries of the target market region they want to spread in.

Moreover, the competition is intensified in the industry due to the innovations, research and progress in the field of digital technology. So it led to fall in the prices of digital colour pages which are now cheaper than offset printing prices and the organisation who fails to keep up with these trends are bound to have risk of isolation from their markets.

There are some types of printing works (e.g. catalogues) which are more effectively handled by large market players. However, barriers to make entry are very low relatively, with small companies are able to operate their business in their respective local markets. Some jobs require high degree of personal service, such as customer approval of proof, means, that a buyer a may use a relatively smaller, local company. Access to both suppliers and customers is very easy in small organisations. The market trends like new entrants and technological innovations are making rivalry more intensifying among the existing large players.

2.2 Bargaining Power of Buyers:

Buyers of the commercial printing services are not much tends to be price- sensitive as quality of the work and timeliness are generally given more consideration. As the service provided by the market players is also crucial for the buyer's own business, thus, the buyer power is reduced further.

If we were going to analyse the global printing market, considering market players to be printing companies, while buyers as those who render the services of companies, including the commercial end-users and media. Generally, organisations have a large number of customers to sell their services to, which obviously in most of the case will weaken the buying power of customers. And players moreover, would not like to miss such customers as it would create a negative impact on their revenues, thus making the buyer power strengthened to some extent. As some work can be done on a regular basis under a long -term contract, but this is not usually the scene is. Most projects are done a project basis, often after a bidding process which means that switching costs would not be that significant. This strengthens the power of buyer. As mentioned earlier, buyer not tend to be highly sensitive on price issue, they also need quality and timeliness of the work. So, can be concluded that the buyer power is moderate.

2.3 Bargaining power of Suppliers:

Large markets players like DNP, generally do not rely on any one supplier for their materials and they tend to negotiate with the suppliers so that they can maximize their purchasing efficiencies. In addition, customers directly supply a substantial amount of paper in the market. Global commercial printing's main inputs are usually Paper and Ink. Amongst the suppliers there are also IT, machines and properties providers etc. Big organisations cannot negotiate on the price of the raw material as it may then affect the quality of the raw materials, increases the supplier's power, which can be then assessed ass moderate in overall focus on the industry.

2.4 New Entrants & Entry barriers to business:

To enter a commercial printing market, one needs to open a new company or diversification of an existing company's operations into it, just same DNP has been doing from long past and has kept it ahead in the competition giving an edge with others and it is expanding its business through mergers and acquisitions of relatively small or any competitive organisation in the same field, so getting its customer base, manufacturing plants, tacit knowledge of employees, which can be further used for research and innovations of new product and ideas.

With every country, rules and regulations for governing use, manufacture, handling, storage, disposal of harmful materials and of land and soil contamination varies. Different regulations present in different regions raises barriers to entry to some extent. The majority of commercial printing organisations are small or medium sized and are operating while focussing on any one of the production area and any single manufacturing plant. Using this chance, large organisations have their operations in every kind of printing and related areas of the business.

For example, Toppan Printing, a rival of Dai Nippon printing has diversified its operations in packaging, industrial materials, electronics, etc. It managed to get itself recognized in the media industry as a valued brand, which gives it a competitive advantage over its rivals from the industry.

Dai Nippon has included decorative materials, packaging and electronic products in its diversification plans, thus making it less reliant on commercial printing itself.

Due to the recession in the recent past, there is slow growth in the economy, this makes entering a new market an unexciting prospect for the organisations. Market is also going from a phase where is there is an over-capacity, creating difficulties for the new entrants to compete effectively and handle the pressure of pricing. However, in overall, the new entrants' probabilities are assessed strong.

2.5 Substitute Products/technology:

With the development in technology, now there are substitutes to commercial printing in the form of electronic delivery of documents and data and this threat is rising together with the growing use of internet as a source of communication tool and the development of new communication techniques. But, acceptance of electronic delivery by customer is uncertain, as it depends on the extent to which the replacing traditional reading of print materials with online, hosted media content is accepted by the clients/customers. On an overall basis, the threat of substitute can be said strong.

Porter's Five Forces framework can be applied by Dai Nippon Printing organisation to improve its chances to remain ahead in competition.

VRIO framework:

VRIO is another framework/ tool for any organisation's internal analysis. VRIO is an acronym which stands for the four questions that you need to ask about any company's resource or capability to determine its competitive potential in the market. We will look in the context of Dai Nippon Printing (DNP). It stands for the questions of:

Value (V) - Does DNP have the ability to exploit an opportunity with available resource/capability?

Rarity(R) - Do the organisation have any resource/technology which is rare?

Imitability (I) - Can the Dai Nippon's resource/technology easily be imitated by competitors?

Organization (O) - Are the firm's other policies organized properly to support its valuable, rare, and tough-to-imitate resources/technology?

Value: The question is does Dai Nippon Printing's resources and capabilities add value to the business providing it a competitive edge? The company focuses on consistently researching for new products or services. DNP diversified its business in Information Technologies, to keep it going on with the trends and competition. As consumer needs evolve, companies must anticipate new trends and act quickly to provide exactly the information, products, and services that are in demand. As part of the corporate infrastructure, IT tools have revolutionized DNP's approach to business and transformed the way they conduct it. DNP strive to be the first to come up with an innovative idea, the first to shape it into a product or service for the customer. Prime examples of DNP development and solutions include information distribution systems such as content distribution through the Internet Data Centre, sales promotion through web marketing and other means, and a variety of enterprise management and e-commerce payment systems. (DNP co ltd. 2010)


As said by Mike Peng in his book Global strategy, "Simply possessing valuable resources and capabilities many not be enough for the business the question is: How rare are valuable resources or capabilities?" (Peng 2009a) There might be some resources that are valuable but are common in nature, and then it is not going to give firm a competitive advantage over others.

Other Printing giants which give a direct competition to DNP at a global stage are RR Donnelley, Quebecor Inc. and Toppan printing. To keep any company's resources rare is very tough; the only way, any firm can be ahead in the competition is that its need to be focussed on research and development of new innovative products and technologies, which their competitors have not yet invented.

DNP has always focussed on development of new products and technologies. For example, On December 7, 2010, DNP, NTT DOCOMO and CHI Ltd. are in a joint venture to create a firm named 2Dfacto Inc., which will be selling electronic books online from January 2011 with an aim to establish a hybrid bookstore (DNP co. ltd. 2010)

DNP launched Luminescent Poster and Printed materials in September 2010. The features of luminescent poster are: being a self-emitting device, it will save more energy than liquid crystal panels, as well as being thinner and lighter. Its other features include: low cost, superior appeal: has a broad angle of vision making it the optimal format for advertising, superior safety. It does not emit heat when in use, as such, is safe to touch. (DNP co. Ltd. 2010)


Competitive advantage can be maintained only if the competitors have a difficult time in imitating them. It is relatively easier to copy the tangible assets (such as manufacturing plants) of any company than its intangible assets such as knowledge of employees, managerial talents, expertise. (peng 2009b) The technology that the company creates, get it patents also, but more general kind of technologies are adopted early by the competitors. So, the imitability factor can be said moderate in case of DNP as it is always updating in a way to keep itself ahead of the competition.


An unorganized structure of rare, valuable, tough-to-imitate resources and technology cannot provide a sustainable competitive advantage to any organisation. There are numerous components that contribute to the organisation assets. Because organisation itself cannot be a successful organisation, it needs literally thousands of these organizational attributes like mangers who deal with sponsors, distributors or local sites, employees, bundled together to generate such an advantage.

It has its operations in Asia, Europe and the US. There are more than 40,000 people working for DNP. How it is able to manage its business as a single entity can be the secret of its organisational value achievement.

There are couple of more models/tools that can be applied to the working of the DNP like the PESTEL and the PPPP model.


Many factors from the macro- environment affect any company's decision making or business. These can be tax changes by government of customer market, amendments in policies of government, trade associations. To categorise them, organisation can use the PESTEL model.

(Source: Google search)

Political Factors:

Due to the recession in the recent past, every industry was affected by it and had to bear huge losses by the organisations, which were mostly from the developed regions like US, Europe and Japan. Governments have to take steps to prevent their respective industries from facing further losses. Same happened with the Printing industry, Japanese economy is still not much recovered from the recession compared to US and Europe. DNP's printing and advertising segment was hit hard by it, but now showing some sign of improvements.

Economic Factors:

It includes taxation policies, inflation, economic growth, etc. before the recession in 2007, printing industry was in a huge profit from last four to six years. But after the recession, the demand for goods dropped as people lost jobs in recession and economic growth was much reduced, even in negative for some countries, including Japan. It may not be wrong that the economy which is worst affected by the recession was Japan's. But, we can see from the recent industry outcomes that the industry is getting on track, DNP earning $9480 million in the first six months of 2010 year, a profit of 3.2% better than the 1.9% of 2009 financial year. (dnp co. ltd. 2010)

Social Factors:

DNP or the whole printing industry is facing danger from the raising use of internet by the clients and the end users. As the society is getting trendier towards digital options, offset printing is at a higher level of risks nowadays. Therefore, keeping the social trend, firms also need to get digital with the world by providing digital services like electronic copies and innovate new products and services to attract customers.

Technological Factors:

With the introduction of the IT in the recent decade and its increasing popularity and use, the customer also somewhat prefers digital books. The customer has a wider choice of options to access to book through internet or through traditional books method. Customer nowadays prefers to choose the internet. DNP has already started getting digitalised and from January 2011, its joint venture product 2Dfacto Ltd. with DOCOMO and CHI will be selling electronic books and it is aiming to create a hybrid online bookstore. (DNP co. ltd. 2010)

Environmental Factors:

With the increasing environmental awareness among the governments and customers, the firms are also initiating environment friendly procedures of business. DNP's business, which is basically from printing of books and magazines, needs paper as a raw material, the firm also started using dealing with environment friendly suppliers for the raw material and supporting social causes under their CSR term. The move towards using environmental friendly goods is also giving new opportunities for business. (Oxford University Press 2007)

DNP is affected by laws and regulations in Japan and other countries regarding energy conservation, the use of harmful substances, the prevention of Air pollution, water quality protection and waste treatment, and product recycling. Such regulations may be strengthened because of the impact of global climate trends.

Legal compliance:

The Company conducts business based on strict compliance with the law and social ethics. Wherever it operates, in Japan or overseas, it is subject to a wide variety of legal regulations and restrictions, including laws related to product

liability, monopoly prohibitions, the protection of personal information, patents, taxes, imports and exports, etc.

Company Resource Audit

Resource Audit is the internal audit of any company to assess its resources like financial resources, human resources, Physical resources, Intangible resources.

Resource Audit can usually be grounded under the following categories:

Financial Resources:

Financial resources mainly concern with the ability of the business to 'finance' itself. All these financial figures are from the company's annual report for the financial year ended 31st march 2010. It has a capital of $1364.40 million (as of march 2010)

(Thousands of US dollars)

Cash & Cash Equivalents: $1,631,290

Total Assets: $17,407,032

Total current Liabilities: $5,074,677

Total Net Assets: $10,288,860

Net Sales: $17,025,624

Income tax: $255,204

NET INCOME (LOSS) $250,301

(DNP co. Ltd. 2010)

Human Resources:

DNP has a huge number of employees base scattered in the whole world.

Consolidated employees: 39,463

Non-consolidated: 10,539

(The following figures are as of march 2010)

Intangible resources: Intangible resources can easily be ignored while assessing the resources of the firm, but it can prove crucial.

Intangible assets include:




Intellectual property

Identifying Firm's Current Strategy:

Basic strategy: Consumers have changed their consumption behaviour with the development of information networks; today's consumers use a variety of communication channels to gather the information they want and to actively express their opinions. Because of these changes, it has become important for businesses to get a good grasp of the needs of individual consumers and to establish closer communication with them.

Using Printing & Information technology together: DNP is developing a unique solution that combine printing and information technologies in order to resolve problems that corporate clients and consumers usually face in the area of information communication.

Developing new communication styles: DNP is working to solve problems for corporate clients and consumers by creating optimal combinations of media and content, building easy-to-use communication infrastructure.

Providing Comprehensive Business Process Solutions for Corporate Clients: It is maintaining the advanced information security required for editing and processing massive amounts of data and for handling important information

Generating new business through Global expansions & tie-ups: DNP intends to develop new business fields, mainly by using our network of overseas bases to develop global businesses and by collaborating with companies that excel in a specific area.

Business risks to DNP:

The performance of the DNP have been affected by significant various factors that may arise in the future. Some of them are mentioned here:

Japanese Economy and consumption trends:

DNP engages in a wide range of business and operates mostly in the domestic market and overseas sales constitute for only 12% of net sales. It is very much dependent on the domestic market.

Fluctuations in Raw material procurement:

The Company procures raw materials such as printing paper and fi lm from multiple suppliers in Japan and overseas. There is some potential for imbalances between supply and demand due to factors like spikes in petroleum prices or sudden surges in demand from emerging markets

Development of new products and technologies and services

DNP uses its printing and information technologies to develop and provide to a broad range of industries products, technologies, and services that meet the needs of corporate clients and consumers. In recent years, the pace of technological innovation in these areas has become faster than ever, and customers' needs have been rapidly diversifying.