The document discusses Xerox Corporation and its relationship with Fuji Photo Film through their joint venture Fuji Xerox. It provides background on Xerox's history and partnerships. A SWOT analysis identifies strengths like its strong brand but also weaknesses like being slow to change. The optimal solution is discussed as rebuilding the relationship between Xerox and Fuji Xerox at an upcoming meeting, as separating could allow competitors like Canon to threaten their market share. Alternative solutions of a licensing agreement or completely separating are also considered.

1. XEROX AND ITS
SUBSIDIARIES
GROUP 5 – MRKT 620

2. CONTENTS
• Xerox Case Background
• Addressing the problem
• SWOT analysis
• Comparison to competition
• Problem Statement
• Potential solutions to the problem
• Optimal solution
• Reasoning for Optimal Solution
• Alternative solutions
• Reasoning behind alternative solutions

3. XEROX HISTORY
• Funded by Haloid Corporation (Rochester, NY) in 1948
• Formed their first Joint Venture with British company Rank Organiation (became Rank
Xerox) in 1950
• Had JV subsidiaries in Mexico, Italy, Germany, France and Australia by 1960
• Became Xerox Corporation in 1961
• Formed JV with Japanese Fuji Photo Film and Ranx Xeros (Fuji Xerox)
• 1973: Fuji Xerox launched FX2200, the worlds smallest copier
• Relationship began to decline, there were series of meetings to try to realign the
companies
• Codestiny I in 1982, Codestiny II in 1984 and Codestiny III scheduled for 1993

4. XEROX SWOT ANALYSIS
Strengths
• Strong brand reputation as an
established company in the industry
• Has subsidiaries and partners around
the world that helped them expand
from a US company to a global
company
• Already have patents and copyrights
established for their technologies
Weaknesses
• Strict structure and beliefs, does not
support growth of subsidiaries
• Lack of leverage as Fuji Xerox has
leapt ahead and developed an
advantage in manufacturing and
product development
• Very slow in reacting to change

5. XEROX SWOT
• Opportunities
• Ability to continue a partnership and hold majority of the market share in the industry
• Successful experience with multinational partners could attract additional future partners
for mutually beneficial relationships
• Threats
• Threat of competition is high as Canon develops and becomes a prominent threat to their
market share
• Threat of internal conflict could lead to the company collapsing from within
• Threat of splitting partnership could lead to an additional company competing for market
share
• Canon has developed a razor-razor blades model as laser printers have become a primary
compliment to computers

6. OPTIMAL SOLUTION
• The optimal solution for Xerox group would be to discuss rebuilding the
relationship between Xerox and Fuji Photo Film at Codestiny III in 1993.

7. PRIMARY THREAT: CANON
• Xerox
• $6.6 billion revenue in US
• $3.5 b in Japan, ally with Fuji Photo Film
• $4.0 b in Europe, alliance with Rank Organization
• $1.7 b in Latin/South America
• Canon
• $2.9b in North America, alliances with HP and Kodak
• $2.9 b in Japan
• $2.9 b in Europe, alliance with Olivetti

8. THE PROBLEM
• The relationship between Fuji Xeros (Japan) and Xerox Corporation is beginning
to fade. Fuji feels that they are being restricted by their agreement, that they
would be able to develop and sell products in other markets, including the
Americas and Europe. There are several competitors emerging in the market,
most notably Canon, that are a legitimate threat to Xerox’s market share

9. POSSIBLE SOLUTIONS TO THE PROBLEM
• Rebuild the relationship between Xerox and Fuji Xerox and keep an established
relationship between the two
• Come to a licensing agreement, where the companies share brand names and
products while working as separate entities
• Cut all ties with the relationship and operate as two separate companies

10. WHY REBUILD THE RELATIONSHIP
• Sustaining their market share will be easier to do together than separately, Canon is a
major threat to become the leader in the industry
• R&D costs have skyrocketed throughout the 1980s, keeping this partnership would
reduce those costs for both parties rather than having to pursue future projects on
their own
• Canon already has alliances with other prominent companies in the United States: HP
and Kodak, providing them with resources to grow and limiting potential partners if
Xerox decided to pursue another partner

11. POTENTIAL DOWNFALL OF REBUILDING
RELATIONSHIP
• Issues may not be able to be resolved, conflict may arise and may not be able to
be peacefully resolved the next time around
• May lose some control to the partner, what is designed to be a 50-50 relationship
could sway more to one side than the other
• 70% of JVs last less than 3.5 years
• If the rebuild fails, Xerox and Fuji Photo will be fighting for market share that they
previously shared as one

12. ALTERNATE SOLUTIONS
• Xerox and Fuji Photo film can come to a licensing agreement, to share patents
and technology
• Sharing technology would lead to one party receiving royalty commissions, while the
other receives technology that may be better than what they have
• Keeps companies working together but provides each with the flexibility and freedom
to pursue future ventures as they please
• Completely abandon the business relationship between the two parties

13. WHY A LICENSING AGREEMENT?
• Pros
• Reduce risk when entering a new market
• Provide access to markets with high entry barriers
• Quicker access to markets
• Cons
• Restricts the licensor’s activities
• May lead to global inconsistencies with the product
• Licensee may become a competitor or not committed to building the brand
• Risk of licensee not keeping up to the high standard and sustaining brand reputation

14. WHY CUT TIES WITH EACH OTHER?
• Pros
• Ability to develop projects as they see fit without needing approval from another
member
• No time/resources need to be spent to monitor and sustain relationship
• Cons
• Increased risk while operating as individual companies as the partner is not there to
mitigate
• Previous partner becomes competitor, companies would be fighting for previously
shared market share
• Competitors have an easier chance at taking over, as one company will be weaker than
it would be with a partner