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What are the strategic alternatives for a company in a declining industry

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Our company is an established printer with a long history. We are quite profitable relative to our peers. It is obvious, however, that the printing industry in general is in decline. We are also noticing that clients are ordering less volume. So far we have been able to hold prices but the early indicators from our sales team is that we will see push back on our prices next quarter. All of our management discussions focus on efficiency and optimizing equipment utilization. It seems like we should be looking at a significant strategic alternatives. For example exiting the publishing business or acquiring competitors.
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Sounds like you are correct to be concerned. There are several opportunities to address your industry decline.

1. Complete acquisitions that give you market leadership in your industry. You want one or more transactions that give you the largest share of revenue for industry or geography. This approach will allow you to win a disproportionate share of new business. You can also cut costs to improve margins. There is another benefit. Valuations of companies in declining industries tend to be reasonable because the prospects for growth are dim. On the flip side, large acquisitions in a declining industry can feel (and sometimes are) like flushing good money after bad.

2. Find high value niches in your industry to defend and support. In printing, you might have an attractive niche in certain materials (special papers, special inks, etc.) or in particular industries (banking, education, etc.). One of the dangers is that the niche is small in terms of total market size so it does not help deal with the declining industry problem.

3. Sell less attractive assets or businesses. Your company probably consists of several businesses or major assets. You could sell less appealing businesses to improve overall performance. What is less appealing? A business that is declining faster than other segments or is less profitable might be ripe for selling. The downside is that you still need a go forward plan.

4. Aggressively divest the core business. This can be breathtaking for any management team or board. The idea is simple: sell the entire business for as much as possible. Once the company has cash from the sale there are broadly two choices: a. distribute the proceeds to the shareholders, or b. reinvest (acquire) in an entirely new industry. As an interesting reference point, Nokia, the cell phone company has a had remarkable corporate history, from timber to rubber boots to cell phones.