To get an overview of the situation in which Kinko’s is operating a segmented look at the customers should be useful. The focus is the revenue potential, the customer expectations and how Kinko is serving these.
Consumer
Revenue pot. 600 mio. $ Revenue ~ 30% total revenues
Shrinking by about 6%
Technology substitutes at home office
Customer visits 15x per year
Share loss to competitors (better store locations, prices and customer approach)
Customer exp. Convenient locations
Quality
Low prices
Capabilities to serve Store locations -3,7% (1990-2000)
Customer service complains(26% of customers experienced confusion while in store/ 46% need assistance)
Competitors have lower prices
Local Business
Revenue pot. Customers visits 45x per year
1 Billion ~50 % of total revenue
Declining by 5%
Technology substitutes at offices
Share loss 1-2% per year
Customer values (similar to consumer market) convenient locations, service, quality and price
Customer exp. Convenient locations
Quality and speed
Variety of products
Low prices
Capabilities to serve Similar to consumer market
Locations not matching demand
Price to high in the eyes of clients
Quality not satisfying. Negative Customer experience while visiting shops
One size fits all approach is not working
Commercial
Revenue pot. Served by direct sales force
$350 mio. Revenue ~ 20% of revenue
Growing by 5% per year
Facilities Management business (outsourcing in-house operations) Non-Facilities Management business (drop-in jobs)
Growing market (1-3% per year)
Less than $30mio. Revenue (Market potential $12-$15 billion)
20 customers
30 locations
Sales force 500 reps (incl. Non FM) Market size $2-$5 billion
$300mio revenue
Substitution is also relevant. But declining.