PLEASE DONT COPY FROM INTERNET PLAGIRISM IS PROHIBITED Questions for Discussion

Question

PLEASE DONT COPY FROM INTERNET PLAGIRISM IS PROHIBITED

Questions for Discussion

1. Critically analyze the situation given above.

2. Perform SWOT analysis.

3. What micro environmental factors have affected Xerox’s performance since the late 1990s?

4. What alternative strategy might Xerox have followed in responding to the first signs of declining revenues and profits?

5. Given Xerox’s current situation, what recommendations would you make to Burns for the future of Xerox?

Case Study: Xerox: Adapting to the Turbulent Marketing Environm ent Xerox introduced the first plain-paper office copier more than 50 years ago. In the decades that followed, the company that invented photocopying flat-out dominated the industry it had created The name Xerox became almost generic for copying (as in I'll Xerox this for you). Through the years, Xerox fought off round after round of rivals to stay atop the fiercely competitive copier industry. Through the late 1990s, Xerox's profits and stock price were soaring Then things went terribly wrong for Xerox. The legendary company's stock and fortunes took a stomach-churning dive. In only 18 months, Xerox lost some $38 billion in market value. By mid- 2001, its stock price had plunged from almost $70 in 1999 to under $5. The once-dominant market leader found itself on the brink of bankruptcy. What happened? Blame it on change or rather-on Xerox's failure to adapt to its rapidly changing marketing environment. The world was quickly going di gital, but Xerox hadn't kept up In the new digital environment, Xerox customers no longer relied on the company's flagship products-standalone copiers-to share information and documents. Rather than pumping out and distributing stacks of black-and-white copies, they created digital documents and shared them electronically. Or they printed out multiple copies on their nearby networked printer. On a broader level, while Xerox was busy perfecting copy machines, customers were looking for more sophisti cated "document management solutions." They wanted systems that would let them scan documents in Frankfurt; weave them into colorful, customized showpieces in San Francisco; and print them on demand in London-even altering for American spelling This left Xerox on the edge of financial disaster. "We didn't have any cash and few prospects for making any," says current Xerox CEO Ursula Burns. "The one thing you wanted was good and strong leaders that were aligned and could get us through things and we didn't have that." Burns didn't realize it at the time, but she would one day lead the company where she had been groomed for over 20 years. In tact, she was on the verge of leavng the company when her colleague and friend, Anne Mulcahy, became CEO and convinced Burns to stay. Burns was then given charge to start cleaning house The Turnaround Begins Task number one: outsource Xerox's manufacturing. An often criticized and unpopular move, outsourcing was critical to Xerox's cost-saving efforts. Burns oversaw the process in a way that preserved quality while achieving the desired cost benefits. And she did so with the blessing of Xerox's employee union after convincing the union that it was either lose some jobs or have no jobs at all. With the restructuring of manufacturing, Xerox's workforce dropped from 100,000 employees to 55,000 in just four years. Although this and other efforts returned Xerox to profitability within a few years, the bigger question still remained: What business is Xerox really in? To answer this question, Xerox renewed its focus on the customer. Xerox had always focused on copier hardware. But 'we were being dragged by our customers into managing large, complex business processes for them" says Burns. Before developing new products, Xerox researchers held seemingly endless customer focus groups. Sophie Vandebroek, Xerox's chief technology

Explanation / Answer

1. Critically analyze the situation given above.

Xerox was a pioneer in copying machines and remained on top of the business, Xerox start witnessing a decline in business and the stocks plummet in just 18 months from $70 to $5. All this happened because Xerox failed to keep up with the changing market Scenario and customer needs. Xerox was just focused on augmenting the copier machine but never paid attention to customer who wanted better ways to share data and not just copy the documents. When company was on the brink of filing bankruptcy, they started to change and listen to customers. Xerox went for a big overhaul and instead of just being labeled as a copier company it moved to document management. They along with cutting on manufacturing cost, started acquiring companies which will help them make products in line with their new strategy of document management. It started supplying solutions which helped customers to cut out on their cost and improve their processes. With new strategy on board, company’s revenue increased and stocks showed signs of improvement. In this case, Xerox overlooked the chances of new technology replacing its product and faltered. If they have not continued to focus on product and instead focus on customer requirement or even think beyond it, it would have always remained on top of its business.

2. Perform SWOT analysis for Xerox- during early 2000

Strength-

Weakness

Opportunity

Threat

3. What micro environmental factors have affected Xerox’s performance since the late 1990s?

Xerox failed to respond to customer changing needs on time and instead focused on just making its core product copier work better. Companies were not willing to buy the same product over and over again and their revenues first hit a plateau and then start declining really fast.

4. What alternative strategy might Xerox have followed in responding to the first signs of declining revenues and profits?

During the first sign of declining revenues and profits, Xerox should have listened to customer’s needs and moved to new products and services that were actually for customer benefits.

5. Given Xerox’s current situation, what recommendations would you make to Burns for the future of Xerox?

Xerox has now build a good product portfolio and is helping customer’s solutions which make them reap benefits. Xerox should now listen to its customers more often and continue building and improving its product portfolio. It should also go beyond the customer requirements and should also focus on things of future.

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