A Case Study Documenting Xerox’s Success and Challenges.
Xerox is the world’s leading manufacturing company of copiers (black and white, colour), printers, scanners and fax machines. It is also a leader in document management software and office consumables. In 1997, it had sales of 8,261 million and growth of 8.4%, employing over 57,400 people worldwide.
Some of the key reasons for Xerox’s success include:
Xerox was particularly successful because it developed a strong brand and enviable position with high end customers. Manufacturing excellence, total customer satisfaction and leading customer services underpinned the Xerox brand.
Xerox had successful partnerships. One of which was the Fuji-Xerox joint venture established in 1962, brought the best of both companies together. Initially Xerox set out to license manufacturing to enter the Japanese market, Xerox provided management know-how, resources and skills, whereas Fuji had local market knowledge, distribution channels, and operational skills. The alliance enabled mutual learning to take place - which led to some of the most successful advances in technology and manufacturing excellence.
New technologies, new patents and new manufacturing processes resulted from the alliance. TQM - total quality management was developed with lots of successes for the company, including the number of defective parts from suppliers falling from 25 per million in 1983 to 300 per million, 1992. Xerox saved at least a year in new product development, through specific project teams - that were tasked to design new products and bring to the market new products quicker. Fuji Xerox developed a new focus towards quality - which helped the company itself and reputation with the customer.
The business was regularly challenged. It need to restructure its business to keep in touch with the changes in consumer requirements. By the late 1990’s Xerox had grown into a large corporation. To keep itself innovative and entrepreneurial it needed a structure that would ensure that it was responsive to the market.
Significant changes were made including a new matrix structure for management and the organization. Nine independent business units were created for its different product groups and markets, supported by organization wide R&D, and sales and service teams. By changing its structure it was closer to the customer and offered a single point of contact.
The Xerox culture - encouraged employees to innovate all the time, helping the company to stay ahead.
Challenges and outlook for Xerox:
Some of the threats to the industry include the internet. The internet and e-mail have led to a reduction in the demand for printing, copying, and paper based products.
Competitors, such as IBM, Canon and Kodak have been particularly effective at gaining low-end customers; they have entered the high end market at lower prices which have affected profit margins.
Worldwide recession is affecting the capital expenditure on IT. Companies are withdrawing from non priority investments. Xerox has diversified its business to include consulting, workflow and document management services. Software development has become a greater cash cow for the business.
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