Xerox

1. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
TO : MARIA THERESA ALBAÑA
UNIVERSITY OF THE PHILIPPINES – VISAYAS
RE : CASE STUDY REPORT XEROX
Dear Sir/Madam:
Herewith please find the Case Study Report in compliance with the course
requirements of the course.
Areas of Consideration:
SWOT Analysis
Strengths Weaknesses
 Introduced the first plain-paper office
copier 50 years ago
 Market leader in copier industry
 Perfected copy machines
 Large and long respected workforce
 Stock price plunged from $70 in 1999 to
$5 in 2001
 On the brink of bankruptcy
 Inability to adapt to rapidly changing
marketing environment
 Traditional workforce expert in copy
machines but not on technology
Opportunities Threats
 Increasing demand for document
management systems
 Huge market
 Increasingly digital world
 Less reliance on stand-alone copiers to
share information and documents
 Need for document management
solutions instead of simple copy
machines
 New competition from information
technology companies like HP and IBM
1. How did changes in the marketing environment create opportunities and
threats for Xerox?
YEAR EVENT OPPORTUNITIES THREATS
1906 Haloid Photographic Company founded
1958 Renamed Haloid Xerox
1959 Introduction of Xerox 914
 Strong patents
 Few competitors
 Growing Market
 High costs of
production
 Fledgling technology

2. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
1961
Renamed Xerox Corporation and listed on
the NYSE
 Access to capital
 Small technology
companies up for
sale
 Public ownership of
shares
 Loss of control
1970 Entry into market by IBM and Kodak
 Market leadership
 Technology
advantage
 Ever increasing
demand for copiers
 Growing
competition
 Expiring patents
 Anti trust suit from
Japanese competitors
1980 Market share falls to less than 50%
 Market leadership
 Low production
costs
 Technological
advantage
 Increased
competition
 Loss of patent
protection due to
anti trust ruling
1983 Near collapse, restructured and reorganized
 Large workforce
 Advanced products
(Memorywriter)
 Low cost, high
quality competitor
products
1990 Retooled and reorganized processes
 Streamlined
workforce
 Efficient processes
 Ever increasing
demand for digital
copiers, network
printers, and faxing
 Increased demand
for high quality
products
 Technological
changes
1994
Corporate signature “Xerox: The
Document Company”
 Existing technology
for digital copiers
 Competitors
catching up
2003 Adoption of Lean Six Sigma and TQM
 Full year profitability
 Decreasing debt
 Increasing cash
 Investment in R&D
 XMPIe – cross
media, variable data,
one to one marketing
solutions
 Customer focus on
digital technology
 Demand for sharing
instead of copying
2010 Focus on customer needs
 Ever growing
demand
 Focus on digital
instead of analog
processes
 Need for
interconnection
 Increased
competition
 No technology
protection
Capitalizing on the need to share documents easily and quickly, in the late 1950s,
Xerox Corporation (then known as the Haloid Photographic Company) introduced the
Xerox 914, the first affordable, commercially available copier. This catapulted what was then
a struggling photographic equipment company into one of the largest companies in the US,

3. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
creating and gaining almost total dominance over the copier market. It held market share at
almost 100% until the entry of other players in the late 1970s and early 1980s.
In the 1970s, new entrants IBM and Kodak grabbed a share of the copier pie but
only gained a toehold in the market. It was only in the 1980s, after Xerox lost a hotly
contested antitrust suit filed against it by Japanese competitors, that it was forced to license
its photocopying technology to other companies which led to its losing market share in the
middle of the decade to Japanese competitors who capitalized on low cost, high volume
copiers. By 1983, Xerox was in near collapse, being US$2B in debt and losing significant
market share to its competitors. Its business model, that of a standalone copier serviced by
an army of technicians, was no longer viable in an increasingly digital world where people
were more interested in sharing rather than printing.
In an attempt to reinvent itself, Xerox changed its logo to the pixellated X and called
itself Xerox : The Document Company. It invested in retooling its facilities, streamlined
its processes, and reorganized itself to meet the growing digital demand of its customers. It
adopted Lean Six Sigma and Total Quality Management (TQM) practices to meet the ever
challenging and cutthroat copier market.
By 2010, Xerox again reinvented itself and focused on customer needs, creating a
new logo for the digital age, and abandoning its product centric business model. It no longer
sells single purpose photocopiers, instead producing high quality, low maintenance network
solutions to copying, sharing, and distributing files and documents among organizations and
people.
In the 1960s to the late 1990s, Xerox was a cumbersome organization, reacting
sluggishly to changes in customer taste and preferences and adamantly resisting new
technology to address stronger competition. It focused more on selling and servicing its
existing products rather than creating new products to meet customer demand.
Changes in the marketing environment that consisted of changing consumer
demands, development of new technology, and entry of new competitors created
opportunities and threats for Xerox that were not adequately addressed by the company.
Xerox failed to listen to its customers, ignoring their need for a more sophisticated
way of sharing, insisting on developing the same products, only with more and improved
features instead of developing other means of sharing documents. It eschewed new
technology for tried and tested methods and processes of production, missing being the
innovator of new technology. It also underestimated its competition, relying on the loyalty of
its customer base.
2. How well has Xerox adapted to the changing marketing environment over the
years? What impact has its ability to adapt had on company performance?
During its heyday in the 1960s to the early 1980s, Xerox was characterized by a rigid
and inflexible organizational structure, resisting changes in technology and market demands,

4. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
instead relying on the patent protection of its photocopying technology to grab and maintain
an almost totally dominant share in the market. This was because Xerox had strong patent
protection for its copying technology, the market for which was increasing exponentially,
and it had little to no competition.
This brought about its downfall in the early 1980s, when it failed to focus on its
customers and anticipate the decline in market share brought about by aggressive product
lines and marketing strategies of its competitors. It was only in the late 1990s that it
reinvented itself to be more customer-centric, capitalizing on the digital technology it
acquired from smaller companies earlier in the decade but were never fully utilized.
Xerox was not able to adapt to the changing marketing environment in the early part
of its existence, relying instead on its market leadership and protected processes to keep the
enemy at bay and remain the dominant player in the market. In 1983, Xerox had 9 times
more suppliers, 2 times more employees, had double the cycle times for production, had 10
times more rejects, and 7 times more manufacturing defects than its competitors. Due to
this, its market share plummeted from almost total dominance to less than half of the
market, losing market share to upstarts like Kodak, IBM, Sharp, Canon, and Ricoh.
Realizing these, David T. Kearns planned a long range quality strategy, adopting
Total Quality Management (TQM) and Lean Just In Time (JIT) Six Sigma practices to pull
the company out of the depths and into the twenty first century. While widely criticized,
these best practices streamlined the production of its products, bringing production and
inventory costs down and decreasing defects and customer complaints. The new strategy
brought changes in product planning and distribution, established unit objectives, and
shifted the focus to the customer instead of the product.
These changes have helped Xerox regain some of what it lost. It is nowhere near the
dominant player it was before, but it is no longer the terminal patient waiting to die.
3. Is the transformed Xerox well-positioned to meet the opportunities and
challenges of the future marketing environment?
Yes.
The transformed Xerox is a far cry from the rigid structure it was in the 1980s and
early 1990s. It has developed its supply chain using JIT, its manufacturing processes by
TQM, its business processes by Six Sigma, and its marketing strategies to take advantage of
current and future demands. It is more flexible now to meet changes in the market
environment.
4. How does the chapter opening Xerox story relate to what comes later in the
chapter?
In the early days of the copying business, with little to no competing companies and
products and a huge untapped market to exploit, inflexibility and a focus on its products
enabled Xerox to survive. However, with the entry of new players, changing market

5. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
demands and preferences, and new technologies, the company had to adapt and change its
organizational structure and processes to survive.
The opening story showed Xerox at the peak of its strength, where it could do no
wrong, where despite lapses and mistakes, it could flourish because customers who needed
its products had nowhere else to turn. The ending story showed a reinvented and totally
different Xerox, one that focused not on the products it sold, copy machines, but on the
core concept of its business, the ability to share documents and information.
Hoping the same meets your standards.
Thank you, I remain
Very truly yours,
MARCELO AUGUSTO A. COSGAYON