Businessmodel of RR Donnelley

Customer Segments

RR Donnelley provides a broad range of communications solutions to companies across all segments of the private and public sector. On its website, the Company lists several core industries in which it targets clients:

• Automotive, creating marketing and other external communications for automotive manufacturing companies;
• Industrial Manufacturing, providing various specialist packaging and labelling service to manufacturers of appliances, chemicals, construction equipment, electronics, medical devices, testing equipment, and other products;
• Insurance, offering multi-channel communication services to small, medium, and large insurance providers and specialist insurers;
• Pharmaceutical, providing cGMP-compliant packaging labels to pharmaceutical manufacturing companies and distributors;
• Consumer Goods, providing packaging and labelling services to various consumer goods companies, including food and beverage producers, confectioners, and others;
• Non-Profit, offering various communications services to non-profits, charitable organisations, and community foundations; and
• Government, offering a full suite of communications services to local, state, and federal government bodies, as well as various public institutions. RR Donnelley’s core market is its native US. The Company, however, also serves an international customer base spanning overseas markets in North America, Asia, and Europe.

Value Propositions

RR Donnelley provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as leading provider of communications services, both domestically and internationally, serving a number of high-profile clients around the world;
• Its international reach, with the Company serving a large customer base across Asia, the Americas, and Europe in addition to its large domestic customer base in the US;
• Its portfolio of offerings, with the Company offering a diverse range of communications products and services, including digital and print publishing, labelling, packaging, and other related services, catering to the needs of numerous sectors;
• Its industry expertise and experience, with the Company having considerable experience of its market and the likely issues it may face, employing specialist personnel and experienced industry executives. ### Channels

RR Donnelley operates a website at www.rrdonnelley.com, through which it provides information on its various products and services, target industries, and corporate activities. The Company does not operate an online sales platform, but does provide its clients with an online portal through which they are able to manage and track orders.

RR Donnelly makes its sales through an in-house direct sales force which deals directly with the Company’s clients. These sales personnel operate out of the Company’s various offices and facilities located across the US, the Americas, Asia Pacific, and Europe. The Company operates its own publishing and printing facilities through which client orders are completed.

RR Donnelley’s products are distributed to end-users through the US or foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Through its logistics operations, the Company manages the distribution of most customer products printed by the Company in the US and Canada to maximize efficiency and reduce costs for customers.

Customer Relationships

RR Donnelley does not sell products to customers on a self-service basis. It does, however, offer a client portal that enables customers to view order histories and manage their transactions.

RR Donnelley makes its sales after direct consultation with clients, in order to establish the exact brief and requirements of each individual client communication, and ensure that every product and service meets the customer’s needs. The Company principally makes sales to customers on a project-by-project basis.

RR Donnelley provides support to its customers, who are able to contact members of the appropriate team or office over the phone. Customers are also able to make more general enquiries through an online contact form via the RR Donnelley website. The Company additionally operates social media accounts, including with Twitter and LinkedIn, through which it is able to interact directly with existing and prospective clients.

Key Activities

RR Donnelley creates, manages, produces, distributes and processes content on behalf of its customers to ensure effective communications.

The Company operates through five reportable business segments: Publishing and Retail Services, offers products such as magazines, catalogues, retail inserts, directories and packaging; Variable Print, which offers products such as commercial and digital print, direct mail, office products, labels, statement printing, forms and packaging; Strategic Services, which provides logistics services, financial print products, print management offerings, and creative solutions; International, which covers the Company’s international printing and publishing operations; and Corporate, which is concerned with other corporate activities. RR Donnelley serves an international client base across the Americas, Asia Pacific, and Europe.

Key Partners

RR Donnelley works in close collaboration with a broad network of companies and organisations, in order to ensure that the need of its clients are met efficiently and effectively. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of raw materials, principally paper and ink, that is used in the Company’s printing processes, as well as suppliers of services, technologies, and equipment that are used more broadly across the enterprise;
• Distribution and Logistics Partners, comprising various distribution and logistics service providers that assist the Company in delivering the Company’s products to clients and end-users; and
• Strategic and Alliance Partners, comprising market-leading companies across multiple sectors, with which the Company collaborates on various branding, marketing, and other joint projects. RR Donnelley has launched a number of partnerships in recent years. This includes a tie-up with Adobe to deliver multi-channel communications solutions, a partnership with Context Labs to bring blockchain technology to the publishing industry, and a strategic partnership with Mediant Communications.

Key Resources

RR Donnelley’s key resources are its intellectual properties, its raw materials and supply chain, its printing and publishing facilities, its sales and distribution infrastructure, its IT and communications infrastructure, its partnerships, and its personnel.

RR Donnelley owns and number of intellectual properties that are utilised in its printing and publishing processes. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in RR Donnelley’s name, including applications entitled ‘Electrolyte material composition and method’, ‘Method of measurement of aromatic varnish application’ and ‘Sealed cards and methods of producing the same’.

RR Donnelley also owns a network of key physical properties across the Americas, Asia Pacific, and Europe. This comprises 368 US facilities and 137 international facilities, including warehouses, offices, distribution centres, and printing facilities.

Cost Structure

RR Donnelley incurs costs in relation to the procurement of raw materials – namely ink and paper, the procurement of services, the operation of its printing and publishing facilities, the operation of its sales and distribution channels, the management of its partnerships, the implementation of marketing campaigns, the maintenance of its IT and communications infrastructure, and the retention of its personnel.

Revenue Streams

RR Donnelley generates revenue through the provision of various printing, publishing, and other communications products and services. The Company principally derives revenue via sales contracts and in the form of related service fees.

In 2015 RR Donnelley recorded total net sales for the year in the amount of $11.26 billion, down slightly on the $11.60 billion recorded by the Company in 2014. The bulk of these sales, around $9.32 billion, was attributed to product sales, with the remainder attributed to service sales. The Company’s largest revenue generator was its Variable Print segment which alone accounted for 33.4% of the Company’s consolidated net sales in 2015.