Running Head: ZINK IMAGING VALUE CHAIN

Case Study: Zink Imaging Value Chain

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ZINK IMAGING VALUE CHAIN

Case Study: Zink Imaging Value Chain

How was the value chain for the ZINK technology different from traditional printing
technologies? What stage in the value chain had the highest value in each case?
A value chain refers to all the production activities a business has to indulge in to facilitate
product or service delivery. It entails all the production steps from conception to final delivery.
These activities include product design, manufacturing, marketing and finally, distribution. For a
company to produce quality commodities for the consumer market, then the value chain begins
at collecting the raw materials for the product, and covers all steps in manufacturing before the
final product is sold to the consumers.
The value chain for Zink Technology was different from the traditional printing technologies
because it entailed bringing in a new concept not common in the printing technology. The
companys focus was to commercialize a new method of printing whereby instead of using ink
cartridges or toner, they would embed billions of micro-sized crystals whose color would be
activated using heat. The final product, ZINK paper, was offered high quality color printing
when combined with a thermal print device.
For Zink Technologies, the stage in the value chain that had the highest value was in the design,
and this is because they wanted to offer a product that was unique in an already crowded
industry. While most companies focused on developing printing tools that use ink cartridges and
toner, Zink technologies wanted to design a paper that would instead use a thermal head to
activate the color crystals embedded in the paper. This value was important because if formed the
base of their business model, especially since their long term goal was to open up a possibilities
for new types of printers. Their target was to take over digital printing, starting will unlocking
billions of photos trapped in camera phones.
What were ZINKs core competencies (reference week 2 notes/reading)? How did they impact
its business strategy?
A firms core competency refers to that unique element that provides competitive advantage in
the industry and contributes to the organizations growth. For Zink Technologies, the core
competency was its unique product line that had the potential of changing the dynamics of the
printing industry. The company had a unique concept that would make printing more efficient by
not using the regular ink cartridges or toner, but instead use color crystals and a thermal head for
printing. Zink had the fundamental knowledge in printing technology that would open
opportunities for the development of new types of printers and new methods of digital printing.
Zink paper used a thin-film coating process limited to only a few companies in the world, and
this enabled them to partner with other key players in the industry to develop products using the
Zink technology for digital printing consumers.

ZINK IMAGING VALUE CHAIN

What were the tradeoffs ZINK faced for outsourcing vs. internal development of:
a. Paper manufacturing
Zink Imaging had to refine the process of embedding the color crystals into a paper-like
substrate, and they had to scale up this operation to manufacturing level. Thus, they opted to
outsource the process, which meant long-term business risk.
b. Print engine manufacturing
Zink Imaging had to share their intellectual property with PTP, including their patent, trade
secrets, and know-how and in return their product, ZINK-bases printers, would be
commercialized.
c. Finished printer manufacturing/branding
Zink Imaging had to partner with an OEM supplier, which meant that all the ZINK-enabled
products would have the logo of ZINK Imaging.
4. What was ZINKs business model, and what challenges did it pose?
ZINK Imaging did not want their technology to have a limited definition and be considered for
only a small niche of the market. Their objective was to have a magical ingredient brand
where many products could be developed under the brand of Zink Imaging. They wanted their
own platform with various products using their technology for digital printing. The challenge,
however, was to establish an environment that would allow different brands to develop products
on Zink Imaging platform, which was feasible through the OEM business model.
5. How did the manufacturing asset that ZINK acquired impact the companys choice of initial
market?
Zink Imaging had acquired a manufacturing plant, which means that the production scale was
high and therefore, they had to target consumer market application which could sustain their
manufacturing level. The mobile printing market was the right fit.
How did that choice of market differ from what would be chosen from following Moores
beachhead market strategy?
The consumer market application meant that digital printing companies would develop products
on Zink Imaging platform, and this meant long term business for the company. However, for
beachhead market strategy, it meant that Zink Imaging would take longer to enter the digital

ZINK IMAGING VALUE CHAIN

printing market because this strategy is considered a learning opportunity for companies wanting
to venture into a targeted market.
6. How did the characteristics of ZINKs technology impact its choice of initial market?
Zink Imaging printing technology would allow many companies to develop digital printing
products using Zink platform. The advantage is that the disruptive technology would be applied
in consumer market application considering that many companies would adapt to this technology
and provide products for consumers to use.
7. Discuss the challenges ZINK faced in entering that initial market in terms of:
a. Customer behavior
The main challenge was on pricing considering that competitors had flooded the market with
cheaper options. Therefore, Zink Imaging had to consider an appropriate end-user process that
allowed for competitive margins, and would be favorable such that customers would not have to
think twice whether to print or not.
b. Competition
The challenge faced by Zink in entering the initial market was pricing. The competitors had
products selling for low prices and Zink had to deal with this when entering the market.