Moving closer to the customers: effects of vertical integration in the Swedish commercial printing industry created by Thomas Mejtoft

This paper reports on a study regarding how vertical integration is used to increase customer relations in the printing industry and illustrates the competitive consequences with vertical integration towards customers. Results show that since direct customers are perceived as more loyal and profitable than advertising agencies and/or print brokers, integration of content creation is common to increase relations with direct customers. However, as direct customers' part of total production is still very small, integration of content creation gives rise to a potentially competitive situation between printing firms and advertising agencies. Printing firms recognized this problem as they try to avoid this competition. Two different approaches to the problem are illustrated. Printing firms either focus on simple jobs that are not of advertising agencies' interest or they isolate these services in a separate firm, and consequently can compete for direct customers and still be a printing firm to advertising agencies