Vistaprint 2006 Annual Report Download - page 24

Table of Contents
The graphic design and printing markets are intensely competitive and we may be unsuccessful in competing against current and future
competitors, which could result in price reductions and/or decreased demand for our products.
The printing and graphic design industries are intensely competitive, with many existing and potential competitors, and we expect
competition for online graphic design services and printed products to increase in the future. Competition may result in price pressure, reduced
profit margins and loss of market share, any of which could substantially harm our business and results of operations. The graphic design and
printed product markets traditionally are highly fragmented and geographically dispersed. The increased use of the Internet for online commerce
and other technical advances have allowed traditional providers of graphic design services and printed products to improve the quality of their
products and services, produce those products and deliver those services more efficiently and reach a broader purchasing public. Current and
potential competitors include:
Ÿself−service desktop design and publishing using a combination of (1) software such as Microsoft Publisher, Microsoft Word and
Broderbund PrintShop; (2) desktop printers or copiers and (3) specialty paper supplies;
Ÿtraditional printing and graphic design companies;
Ÿproviders of emerging technologies, such as websites, e−mail and electronic files, which may act as a substitute for printed materials;
Ÿoffice supplies and photocopy companies such as Office Depot, FedEx Kinko’s, OfficeMax and Staples;
Ÿwholesale printers such as Taylor Corporation and Business Cards Tomorrow International; and
Ÿother online printing and graphic design companies.
Many of our current and potential competitors have advantages over us, including longer operating histories, greater brand recognition,
existing customer and supplier relationships, and significantly greater financial, marketing and other resources. Many of our competitors work
together. For example, Taylor Corporation and Business Cards Tomorrow International sell printed products through office superstores such as
OfficeMax, Staples and Office Depot.
Some of our competitors who either already have an online presence or are seeking to establish an online presence may be able to devote
substantially more resources to website and systems development than we can. In addition, larger, more established and better capitalized entities
may acquire, invest or partner with traditional and online competitors as use of the Internet and other online services increases. Competitors may
also seek to develop new products, technologies or capabilities that could render many of the products, services and content we offer obsolete or
less competitive, which could harm our business and results of operations.
Our failure to meet our customers’ price expectations would adversely affect our business and results of operations.
Demand for our products and services has been sensitive to price. Changes in our pricing strategies have had, and may continue to have,
a significant impact on our revenues and net income. We offer free products and services as a means of attracting customers and we offer
substantial pricing discounts as a means of encouraging repeat purchases. Such free offers and discounts may not result in an increase in
revenues or the optimization of profits. In addition, many external factors, including our production and personnel costs and our competitors’
pricing and marketing strategies, can significantly impact our pricing strategies. If we fail to meet our customers’ price expectations in any given
period, our business and results of operations would suffer.
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