Back Ground of the Company Xerox
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Haloed Corporation was renamed in 1961 as XEROX. Photocopier was their main product which was introduced in 1959.Xerox was the only company in the market providing photocopier. The company monopolized the market as the only seller of photocopier and this monopoly was well protected by patents. The logical result of this monopoly was the over confidence of the company. They made their own standards and trusted heavily on them.
Joint ventures were the method adopted by XEROX to hit the international market. In 1959 RANK XEROX was registered and was assigned a target to hit the market European and African market. In 1962 FUJI XEROX worked in the domain of FAR EAST and ASIAN PACIFIC. Average and high level market was the target of XEROX and had nothing to do with low level market.
Monopoly complaint against XEROX was filed by the Federal Trade Commission in 1973. In 1975 XEROX took away its patents. Many other companies jumped in and between1971 and 1980 about 147 companies got hold of the market. The result was obvious and XEROX lost about50%of the market share.
Middle and high level market was captured by IBM and Eastman Kodak . New technology was introduced by these companies and took a good share of the market from XEROX. The low level market was captured by Japanese firms. The products for the low level market were not in the domain of XEROX and that is why it could not compete the Japanese companies. The Japanese then came into the middle and high level industry. Their product was favored because it was easy to use and preserve.
In 1969, Xerox assumed technological information system also called scientific data system. With the help of scientific data system, Xerox developed mainframe computers. They afterward traded it off in 1975 at loss of 1.4 billion. In 1970 the company bought disables system; it developed daisy wheel printer and computer memories. Xerox merged memory writer, a company which was producing typewriters. This was a successful deal, as the company was able to capture 20% of the typewriter market. The Xerox developed its own research center which designed a new electronic printing technology. This also a lot the company to hold majority of the market purchasing foster in 1983, and then acquiring van Kampen market, company got good position in the market.
Xerox in the 1950 Peter McCullough wanted to implement quality circle activity in the company which he observed during his stay in Japan. A team was sent to Japan to study the activity in 1978, the team also
Study General Motors and the other US manufactures. The result of the study was the involvement of the employees in the company would be fruitful in future.
To implement the decision of involvement of employees in company. Dr. Harold J. Tragash was hired in 1979. The 30% of the work force was given training in 1980.the employees were divided into 100 groups. These groups participated into the fairs of company and the result were as listed:
- Cost reduction.
- Employee satisfaction.
- Improvement in product quality.
In 1982, David Keans become the CEO of the company, he placed off employees and quitted 2100 employees by 1983,
Business effectiveness in 1980, Dwight F. Ryan was made the dead of business effectiveness department. He was given the following tasks:
- Improve productivity
- Reduce cost
- Improve customer satisfaction.
The policy of the involvement of the employees in the affairs of the company became the first step towards the business effectiveness.
Company structure was changed in Ju8ly 1981 abd the business was made into strategic Business unitys. Business system department was handed over to Dwight F.Ryan. fifty Top managers along with David Kean held a meeting in September 1981.which was ended to strong suggestion s to implement business effectiveness with force on employee involvement and competitive benchmarking.
Keans, Rechired and Teagash worked very hard on three goals i.e. increase in productivity cost, effectiveness and customer orientation.
Fuji Xerox was facing new competition in the world market in 1970. Japan being the leader in business activity, posed though competition for Fuji Xerox which h had base in Japan. The solution came in 1976 in the shape of “ the New Xerox Movement “.
Demining award for quality was awarded to Fuji Xerox in 198. This was the result of this new movement.
David Kearns visited Japan to find out the causes of winning the award . He studied deeply the Fuji Xerox model.
In 1982 Targash Richard d and their staff worked o a business strategy effectiveness for Xerox. Theyir study was based upon the Fuji Xerox model. They had a number of meeting with David Kearns and finely on July 1980, a new strategy called “Pursuit og Execellence”was put forward by the team.the team consisted of Senior managers which worked hard to form new stretgy adnn method of its implementation .In 1982 David Nadler and Delta consulting groups was hired to follow the Fuji Xerox model.
Blue Book (a management-Change)
In1983, Kearns held a meeting with cooperate management committee and operating units heads about Blue Book. Twenty five executives gave their opinion about Blue Book.
The wuality experts Phil Crosly and W. Edwards were also invited to speak at the meeting. The main objective of the blue book were:
- Quality improvement, by doing things right and doing them well.
- To improve long term business success.
- Quality determined by customers.
- Provide training by all levels.
- To make the senior managers as role models.
- A system of employee quality reward system to be set up.
Quality strategy became the responsibility of 25 executives to whom David Kearns held a meeting in February in 1983.he explain the meaning of Quality as doing things right the first time.The blue book was not presented as finished product ,instead it was used for briefing product and discussion. The exective of Xerox were divided into two parts. One worked for communication and the other worked for reward and recognition.
The outcome of these groups were as follow:
- The concept of “Leadership through quality” was introduced.
- The idea of Xerox quality was given.
- Quality ws defined as meeting customer existing and their requirements in future.
- Improving quality means understanding and working to satisfy the customer's requirements.
Kearns emphasized on Quality as well as on keeping eye on the challenges going around in other industries. He was the opinion that is was the time to change the culture and timae to introduced the quality culture at Xerox .
In august 1983, the system for Xerox was changed to insure quality.
Cooperate Quality Office
On March 29, 1983, cooperate quality office started functioning. Fred. B. Henderson became vice president for quality. He was also elected as cooperate office by the board of directors. Henderson emphasized on employee involvement, competitive benchmarking and leadership through quality.
According to John Kelsch quality award business strategy are closely related. A change in quality would be a change in strategy. Quality strategy is more useful than product strategy.
Quality implantation team was selected which was working in cooperate quality office. Each business group was given representation in the office. Nine erecutive were from the field and six executives were from the cooperate office including Tragash and Richard.Each member was named as vice president for quality and had to report its departmental head.
In April 1983 a six a six month strategy was implanted by QIT. The member had their concern over its implantation. Firstly would it work and secondly will the company stick to the changes. There was another very important concern and that was about timeframe. There were of the view that it would change the culture and than larger period of time will be required for adjustment.
And other sections of member were of the opinion that too much work is required for this applications and the original task will be showed.
After the formation of quality implementation team (QIT),the quality training task force was made. The range of work set for QIT was to implement the change and quality training task force (QITF) would provide training to the employees. The member of QIT will share ideas, get input from the parent department.adn establish the home office stake in process.
In 1983 the team produce second blue book for implementation at the end of the meeting, they had a strategic plan in their hand and was named as green book.
The green book gave stress in quality strategy, and short term programs which produce long term leadership. The goals of green book were as follow:
- Setting goals which are yet to achieve.
- There must be a strategy for quality and implement.
- The working method.
The green book was consisted on 92 pages its range of study was consisted of 92 pages. Its range of study was the cost of quality, outline for quality implement process problem solving process and tool for served strategically problems. It gave the idea that competitive bench marking is the key tool for several statistical problems. it gave the idea that competitive bench marking is the key tool for evaluating Xerox. This green book was implanted from 1983 to 1987. The most important and positive aspect of
this whole exercise was the training. Each training was given a problem they would have to solve them. The training was given from top to bottom. Managers were trained first and then they participated in the training of their subordinates this training was named as cascade.
Changes and Opportunities Occurred In 40 Years
Strength in the Past:
In the beginning, Xerox enjoyed pure monopoly; there was no competitor in the market. The product of company was well protected by patents. This pure monopoly gave the following benefits to the Xerox.
- There was no price pressure from the competitors.
- It could fix and alter the price according to its own will.
- The company could increase their price by decreasing its production.
- There was no risk of over production.
- Other company completely controlled the market.
During first fifteen years the main products were Xerox 914, the first plane paper Xerox 813, the first desktop plain paper and first photocopier. By 1965, company revenues crossed $500 million.
In 1975, Xerox was forced by the federal trade communication to license its copies to other manufactures.
Xerox monopolized the upper level market for a long time and during this period; the company extended its product line.
The strength of the company lays the following facts:
- It had a good brand name image.
- The company was the pioneer in its filed.
- Good quality products, best technologies and good services gave a stronger out look to the company.
- Even Japanese companies did not enjoy such a strong image.
- The slogan of total satisfaction guarantee according to which instead of monetary refund the products are replaced, became a reason for its bigger image.
- The company had excellent quality management team.
- Employee's participation in operational decisions made a very strong image of the company in local and international market.
- The people working in the organization are proactive in nature then re active.
- The employee participation in the affair of company to find out the demands of customers.
Weakness in the past
The company got over confident because of the monopoly enjoyed by it for a long time. The company started taking things causally. For Example “the receipt provided to purchaser had only product code on it rather than the product name. The purchaser would not know if he caught what he asked for.
Internal competition was another weakness in the past. There was a competition among the employees which badly affected the organization effectiveness. And knowledge management practices. The other result of this internal competition were the isolation of the information, lose of employees, breaks in the organizational flow charts and corporate disloyalty.
Another weakness of the company was that it was not targeting the low level market. Xerox only targeted higher market. Xerox could have increased its profits if they would have targeted low markets.
With the arrival of new competition, Xerox tried to improve its quality. It failed to do so because of its scattered efforts. There was a lack of collective efforts.
The following are the weaknesses of Xerox Corporation:
- Total quality management implementation resulted in high over head costs.
- Financial position of Xerox is not very good.
- 100% quality concept created a negative competitive position for Xerox. As customers are not ready to pay for exceptional quality and services.
- Fixed asset turn over as increase in recent years. But the total asset turnover ratio has decreased. It is because of the reason that the company has increased its inventory requirements by its product replacement concepts.
- Leverage ratios are increased where as profitability ratios are decreased.
Opportunities in The Past
Since Xerox enjoyed monopoly in its products therefore the whole world was its market. The company availed its opportunities and targeted the different regions of the world. This goal was achieved by joint ventures with other companies, the details of which furnished below:
- Xerox got into joint venture with a British company named as Rank Organization in 1959. The joint venture came in the market with the name Rank Xerox. The target of this company was to manufacture and market Xerox equipment in Europe, Africa and Asia.
- Modi Xerox (Xerox India) was a joint venture between Rank Xerox and Modi group in India and its rang was Indian subcontinent.
- Fuji Xerox was established in 1962. Which was a joint venture of Rank Xerox and the Japanese photography firm Fuji Photo Film Co. They aimed Far East and Asia Pacific region for the xerographic and document related products and services in these regions.
Following may be the opportunities of Xerox Corporation:
- Diversification into more product lines.
- Expansion into more production foreign market.
By diversifying into more product lines and by finding new potation markets such as Europe and South East Asia, the company can increase its business and establish its credibility in the international market.
Threats in the Past
There was no self benchmark in the company and it heavily relied own internal benchmark. There are positive points in internal benchmarking as it is cost effective. It is easy to gain access to all the information required. The negative aspect of the internal benchmarking is that we cannot get information about the competitors and the other outside parties. Internal benchmark may not be adequate to face the external pressure. Keeping in mind the drawbacks it is better to use external benchmarking.
External benchmarking is a useful way of studying of performance measured taken by successful organizations with in the same industries or the different industry and learning for them. It is also useful for studying the various systems and processes. The idea that benchmarking is done against in the company in the same industry is a miss concept.
Monopoly case was registered to Federal Trade Commission in 1973 and as a result of this Xerox had to take away its patents in 1975. Monopoly was changed into monopolistic competition in the market which was a great threat to the company.
Between 1971 and 1978, 77 different plain paper copiers came into the market and between 1978 to 1980, 70 more companies listed their mark in the market. This shattered the shares of the company which dropped from 100 % to 50 %.
After the removal of monopoly of Xerox, many Japanese companies entered in photocopy business. And targeted the low level markets. Xerox could not compete as it had no product to offer the low level market.
Japanese after getting the good position in the lower market, started to move toward the mid and upper level markets. Their products were better, easy to use, easy t maintain and more efficient. It was a big blow to Xerox.
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