QUESTION#1: Make a SWOT analysis of Xerox case before it embarked upon

the program of leadership through quality? (Group Question)

STRENGHTS
1. Xerox was the first to enter in the market of copiers and this gave it a first mover advantage
in terms of production experience, skills, cost control etc.
2. Xerox remained in monopoly for a long period of time that allowed Xerox to serve the
whole market without any competition. Xerox was shielded from direct competition by
several hundred patents so they were able to take the advantage of the full market.
3. The demand for Xerox products was very high. As we can estimate it through the following
statement made by an executive of Xerox:
My first day as a salesman, back in the 60s, I walked out of the office and looked at all the
buildings around me and thought, EVERY ONE OF THOSE OFFICES WANT WHAT I
HAVE TO SELL.
WEANKNESSES
1. Xerox was not ready for competition. When they realized that due to the monopoly
complaint to FTC their monopoly will soon come to an end, they should have took some
measures to be ready to face competition. They didnt focus on innovation and enhancing
their product efficiency and quality and features. As a result competitors came up with better
products and captured a lot of market share.
2. The absence of competitive benchmarking was another weakness of Xerox. They used to
measure the quality of one machine by the standards of other Xerox machine and compare
their sales result with the previous one.
3. Lack of research while diversifying was another weakness for Xerox. Xerox first venture in
information technology was the acquisition in 1969 for $967 million of Scientific Data
System (SDS), a mainframe manufacturer. The strategy of moving into larger product
backfired when minicomputer took off and Xerox lost $1.4 billion before selling SDS in
1975.
OPPORTUNITIES
1. Targeting the low volume market was an opportunity for Xerox. Their sales effort was
concentrated on high and the middle volume market and the low volume market was
comparatively neglected.
2. Well calculated diversifications in product line were another opportunity for Xerox. Xerox
also availed this opportunity by introducing the memory writer, a successful line of
electronic typewriters. With 20% of the US electronic typewriter market, Xerox was 1 st in
the market in 1984. Xerox also developed a new electronic printing technology using lasers
and xerography. Xerox quickly established a strong leading position in electronic printing.

3. Opportunity for expanding into more potential foreign markets.

THREATS
1. End of monopoly and entrance of many competitors in the industry. Between 1971 to 1978,
77 different plain copiers were introduced in US. From 1978 to 1980 another 70 entered the
domestic market place. Market share of Xerox dropped from nearly 100% in the 1960s to
below 50% in 1980.
2. Better products of the competitors were another threat. Xerox was facing lack of innovation.
IBM Copier 2, introduced in 1972 featured such attractions as document feed, image
reduction and 2 sided copying. The Kodak Ektaprint 100 copier/duplicators was the first to
use a microcomputer to monitor performance.
3. Competitors especially the Japanese manufacturer started targeting the low volume market
which was neglected by Xerox.
4. Entrance of Japanese into medium and high volume segments was another major threat for
Xerox.

QUESTION NUMBER# 2: What challenges Xerox faces today in terms of

Increased Competition, Sustained Growth, Profitability, Control Cost and Improved
Quality? (Group Question)
STRENGTHS
1. Extensive Research and Development
Xerox has widespread R&D. Xerox has research centers in a lot of countries like Europe,
New York, California and Canada etc. this is one of the reason of Xerox innovative products
which are made available all over the world. Xerox' Digital Imaging Technology Center
(DITC) is the focal point for Xerox' core competency in digital imaging. DITC's staff of
world-class scientists and engineers create Xerox' benchmark digital imaging technologies
and systems. Their knowledge and expertise will play an increasingly important role in
Xerox' future
2. Good Market share
Xerox is a technology and services corporation. Xerox enjoys a high level of customer
loyalty, and market share. According to a new report from Gartner, Inc., Xerox ranked as the
worldwide market share leader for 2007 in Managed Print Services (MPS) based on
revenue. Xerox believes this data further validates its approach to provide services and
solutions that deliver business value. Xerox/Fuji Xerox captured 53 percent of MPS
revenues worldwide in 2007 and in Western Europe alone, accounts for 50 percent of the
MPS market.1
1http://www.xerox.com/go/xrx/template/inv_rel_newsroom.jsp?
ed_name=CHE_fr_Managed_Print_Services&app=Newsroom&view=NewsroomLite&format=article&Xcn

3.

Strong Corporate Brand

Xerox has a strong corporate brand, which is synonymous with its products i.e. copiers,
printers, fax machines which it provides a range of document equipment, software solutions
and services. In addition the company provides paper services offering its customers 100%
recycled paper.

4. Strong environmental Focus Internally

The company has a strong environmental focus which it has developed internally into a
strategy of operations focused on environmental initiatives which has saved the company
hundreds of millions of dollars.
5. Environmental Friendly Products
Xerox is a green company as it has developed an internal policy of recycling copiers and
other equipment i.e. toners, paper etc, which it also offers the benefits of these
environmental solutions to its customers.
6. Wide Range Of Products
Wide ranges of products are being offered by Xerox. 2 It offers a wide range of office
supplies as well as production equipment, e.g. printers, copiers, work flow software and so
on.
First of all the strength of Xerox in 1960s was high demand of their products but now in 2009 the
competition is very tuff a lot of new companies have entered the copier and printer industry and due
to this the demand for such products has been distributed among the companies in whole industry.
The demand for Xerox is not high as was in 1970s.
The weakness of Xerox in the past that is lack of customer focus has been removed as it has a lot of
research labs where different products fulfilling the demands of customers are designed and
developed.
WEAKNESSES
1. Slow to Expand Solid Ink Into Broader Market. Xerox is unable to use solid ink technology
for satisfying the demands of many customers. It should extend this technology in different
technological devices.
2. Partnerships in Transition
3. Lack of Focus on Wide-Format Color Printing

try=CHE&Xlang=fr_CH
2 www.gartner.com/DisplayDocument?id=1064012

OPPORTUNITY
1. Diversifying in more product lines
Xerox as a very strong brand name can now diversify its products lines and can earn great
returns and can be more risk free from the negative effects of the economic recessions.
One of such step is the deal of Xerox acquiring Affiliated Computer Services (ACS) in a cash
and stock transaction valued at $63.11 per share or $6.4 billion as of the closing price of Xerox
stock on Sept. 25. This acquisition will transform Xerox into the leading global enterprise for
document and business process management, and will accelerate its growth in an expanding
market. The revenue generated from services is expected to triple after this acquisition from
$3.5 billion in 2008 to an estimated $10 billion in 2009.
2. Entrance to new potential foreign markets
The Xerox Global Services business is Document Management. Xerox knows more about
document-intensive business processes than anyone does. They understand how information is
created and shared. A recent IDC survey indicated that the current market for Xerox Global
Services (XGS) in the UAE alone is $39Million, with a growth rate over the next four years of
more than 20%. The biggest area of growth being imaging and Document Management.
Xerox Corporation has acquired Veenman B.V. for $68 million (43M). The acquisition pairs
Xerox's portfolio of document products and services with Veenman's distribution capacity in the
Dutch small- and medium-sized business (SMB) market. Xerox will more than double its sales
force and gain access to more than 4,000 SMB customers in the Netherlands. Veenman focuses
on SMB customers through six office locations in the Netherlands that sell and service
document management systems such as printers, copiers and multifunction devices. As the
country's leading independent office technology reseller, Veenman sells products from various
suppliers, including now Xerox.
Table of Xerox Acquisitions
Through this table we will come to know acquisitions of Xerox in different years and it will
give a rough idea that how much diversification Xerox has done in these years and in how many
new foreign markets it has entered. This shows that Xerox has availed its past opportunities of
Entering into new foreign markets and diversifying into new product lines and is currently
availing them as well.
YEAR
2009
2008
2007
2006
2005

ACQUISITION3
1
4
7
4
0

3 Source: www.alacrastore.com/mergers.../Xerox_Corporation-1018506

2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
TOTAL

0
1
0
0
2
4
4
5
2
0
0
0
2
0
1
1
1
1
0
0
2
4
1
47

THREATS
1. Eroding Traditional Copier Business is a big threat for Xerox already existing products
which cannot be included in MFP (multi-functional products). More than 50 products of
Xerox are not MFPs. MFPs have revolutionized the copier business. In the near future
products that arent MFPs wont be able to survive.
2. Printer-Centric Competitors e.g. HP and dell are also a threat for Xerox.
3. Market Consolidation means market saturation dell, hp, Kodak canon and many other
competitors exist in the industry.
4. Competition Introducing Lower-Cost Devices Featuring "Acceptable" Color is going to
cause problems in future.

Question 4: Explain how quality culture was built on Xerox and integrated with
functions of Xerox business? (Prepared by Ayesha Ikram)
QUALITY CULTURE

Culture is the shared beliefs, values, attitudes, institutions, and behavior patterns that characterize
the members of a community or organization. In a healthy business culture, what's good for the
company and for customers comes together and becomes the driving force behind what everyone
does. It is a culture that naturally emphasizes continuous improvement of processes, one that results
in a healthy workplace, satisfied customers, and a growing, profitable company. 4
CULTURE OF XEROX BEFORE KEARN
Before discussing the cultural changes it is very important to understand the culture of Xerox before
these cultural changes. Xerox had a very rigid culture. Problem of organization were not known at
the middle level due to which a communication barrier existed between the management and other
employees. Employees were not involved in finding the solution to the problems being faced by
the organization. Infact they werent even informed of these problems.
These lines clearly show this Maybe at the very highest level there was a sense of crisis, but not if
you looked down through the company.
Employees lacked a sense of association with the company as they werent even informed of the
problems the company faced. Customers demands were not any motivation for the employees they
werent enforced to consider customers while developing new products.
CHANGE IN CULTURE
Changing culture of a company is a time consuming and a very difficult process. Xerox defined the
norms, beliefs and the expected attitudes for its employees.
1. Reward and Recognition
First of all the company in order to increase the commitment of employees to organization
which was lacking in Xerox employees; in February 1983, while deciding blue book it was
decided to revise reward and recognition system to recognize and appreciate the employees
using quality tools.
2. Problem Solving Training and Development
As the quality culture requires that the employees get a right to take decisions regarding the
quality of products and their work it is important that all the employees from the shop level
to top level are given good training and development so that they are trained to apply
problem solving techniques. Quality culture affirms that improvement happens when people
understand, measure, and reduce variation or reengineer those processes to be more efficient
and effective at delivering value for customers. In order to implement this quality training
plan was devised.
The training was carried out in family groups which included a manager and his reporters.
The manager along with the professional trainer carried out a week long problem solving
and quality improvement training. During this week the group had to select a problem or
4 John A. Woods from The Quality Yearbook, 1998 Edition

process and apply quality tools and processes to solve it. After the training each member of
the group trained their subordinates with the help of a professional trainer. This training
approach was called cascade or LUTI. This would not only boost employees moral and
motivation but would also make them more committed towards Xerox.
3. Personal Modeling
Senior management took the initiative in personal modeling. They exhibited behavior they
wanted the employees of each level employee to show. In American corporate culture it was
difficult to stick to a certain behavior for a long time so by doing this the senior management
was not only changing the work related behaviors of the employees but also the their old
practices and beliefs.
4. Change In Value System
Blue book quality statement emphasized that the quality means providing satisfaction to its
customers by providing quality and innovative products and services. As it is stated quality
means providing our external or internal customers innovative products and services that
fully satisfy their requirements case study page 8. This shows that Xerox does not only take
care of changing demands of its external customers but also consider satisfaction of
requirements of its internal customers equally important.
Unless the quality is integrated in the value system it is not possible for the organization to
implement a quality culture. Quality in Xerox was communicated as the imperative value to
the organization. Quality culture cant be achieved until the value system is changed and this
is exactly what Xerox did it changed the value system.
5. Clear Goals and objectives
The organization before quality efforts was very autocratic in nature, but Kearns wanted to
create a quality culture. Vision and goals of the company were made clear to each level
employee. This gave them direction and a challenge which was achievable. In a company
having a quality culture it is very important that each and every employee knows the goals
and objectives of the organization.
6. Slow and Steady Implementation
Kearns decided to take this quality implementation slow so that the employees can master or
get used to one thing and then they moved to the next rule or next step that way the
employees when mastered one step they could easily accept the next step. By this slow and
steady approach the employees would be fully trained according to the new processes and
techniques and would take less time to do them.
I think the training method helped the management to integrate quality culture in the cross function.
If the employees are given problem solving training using the quality tools and processes they
would be able to perform the tasks assigned to them in an effective and efficient way. They will
have practice and confidence to work differently using the quality processes and tools in performing
the tasks assigned to them.

QUESTION#5: How top management communicated the need for quality

throughout Xerox and what structural changes were framed and implemented to
achieve quality? (Answered by Nadine Mughal)
STRUCTURAL CHANGES
Following are the structural changes that were framed and implemented in order to achieve quality
in Xerox:
1. Organizational Effectiveness Office
In 1978 Peter McColough chartered a task force in personnel to study the application of quality
of work life at General Motors and other US manufacturers as well as the Japanese model and
concluded that there was a place for employee involvement at Xerox. The task force
recommended establishing Employee involvement function at corporate level. As a result
Organizational Effectiveness Office was made at Xerox and Dr.Harold was appointed as its
head. Main responsibility of this office was to foster employee involvement.
2. Business Effectiveness Office
In august 1980, Kearns appointed Dwight F.Ryan to head up a new function by the name of
Business Effectiveness. Business Effectiveness office was charged with Improving Productivity,
Cost Effectiveness and Customer Satisfaction.
3. Strategic Business Units
In 1981, Xerox announced a major restructuring of its businesses intro Strategic Business Units.
A Business Equipment group led by Executive Vice president William
F.Glavin was organized along product lines.
Business System group was organized for handling all sales and services.
4. Hiring A Consultant
Kearns hired a consultant in Oct 1982. The consultant was David Nadler from the Delta
Consulting Group. He worked as an adviser to Kearns.
5. Corporate Quality Office
Corporate quality was created on March 29, 1983. Fred B.Henderson was named the Vice
President of Quality. It emphasized on employee involvement and competitive benchmarking as
the key tools to achieve leadership through quality.
6. Formation Of Quality Implementation Team (Qit)

With the creation of Corporate Quality Office, a companywide Quality Implementation Team
(QIT) was formed Executives of each business group selected a representative to the QIT. QIT
developed strategy and detailed implementation guidelines

7. Formation Of Quality Training Task Force (Qttf)

After QIT, a Quality Training Task Force (QTTF) was established. This group worked parallel
to QIT. When QIT used to finish work on one aspect of the action plan, QTTF starts designing
the training for it.
8. Problem Solving And Quality Training
According to the blue book recommendations, Problem solving and Quality training was
introduced at all levels of management at Xerox.
COMMUNICATION
Following are the ways through which the top management communicated the need of quality
in Xerox:
1. Pursuit Of Excellence
On July 28, 1982, a meeting was arranged to discuss the quality strategy by the name of
Pursuit of Excellence. In this meeting a task force was basically made who will work with
senior managers on further developing the strategy and an implementation plan.
2. Leesburg Meeting
In Feb. 1983, Kearns conducted the 1st Leesburg meeting with Xerox top 25 executives. The
executives spend two and a half days discussing the broad strategy and gave it a name of
Leadership through Quality and Xerox policy statement was formulated:
Xerox is a quality company. Quality is the basic business principle of Xerox. Quality
means providing our external and internal customers with innovative products and
services that fully satisfy their requirements. Quality improvement is the job of every
Xerox employee
3. Communicating The Commitment Of Management
For QIT, successful, well-regarded, upwardly mobile managers just one level below Business
Group president were selected. The reason for their selection was to communicate the top
managements commitment to Leadership through Quality.
4. Top Management As The Role Models
The top management communicated the need of quality through their behaviors. The top
management walked liked they talked. They themselves became the role model to support the
quality process.