Xerox and Fuji Xerox

What role has Fuji Xerox played in Xeroxs global strategy ? How do you expect this role to change in the future ?
Fuji Xerox has been the most successful joint venture ever between an American and Japanese firm. Over time it evolved into a fully integrated operation with strong research, development and manufacturing capabilities. While, Xerox concentrated heavily on globalization, it lost a big part of its market share in America to Canon. Canon attacked Xerox in the US market with its new liquid toner copiers and medium to low-end copiers. When Xerox began to rejuvenate, it hinged on Fuji Xerox for guidance and partnership in functional abilities. Xerox's global strategy was to combine "American ingenuity with Japanese manufacturing. Xerox gained the functions of quality programs, product technology from Fuji through adaptation of Leadership through Quality program" State-of-the art Product technology and business effectiveness Competitive Benchmarking JIT Manufacturing Exchange of personnel and evolving communication process.

Role in the future:

Intensify collaboration in development, manufacturing and marketing. Integration of the capabilities of both the companies to produce better quality products in lesser time. Fuji Xerox's aspirations to get worldwide market for low end can lead to better efficiencies. Improved coordination for serving the south-pacific operations. Fuji Xerox and Xerox Corporation should continue to keep the level of autonomy it has developed that allows them to competitively work off one another while at the same time using that ability to strengthen each company and any weakness they may have.

Is Fuji Xerox a successful joint Venture in 1990 ? How would you measure its performance ?Please be as concrete and specific as possible .
Yes. Reasons: The joint venture helps Xerox to compete against the dominant player Canon. Fuji Xerox revenues represented a significant portion of the xerox groups worldwide revenues Fuji xerox financial contribution to xerox net earnings in the form of royalties and profits has been growing rapidly Fuji xerox had been an important source of low end copiers for xerox Though Fuji xerox has developed its technological capabilities and invested heavily in R&D, it continued to rely on Xerox for basic research on new technologies (High end products) Collaboration between xerox and Fuji seemed to be most successful in research Both the companies have agreed upon who would take the lead and supporting roles, so there is no conflict of interest The trust between the companies is huge - exchange of personnel leads to constructive relationship

What were the key success factors in this alliance in the past? Do you expect these factors to change in the future?

Key Success factors

Trust and coordination between the two companies
Autonomy to Fuji Xerox Exchange of personnel- technology transfer

Strong research in both the companies

Xerox -basic research and software capabilities FX- Development and Hardware design

Xeroxs business strategy- rental system along with outright sale Fuji Xeroxs Total Quality Control Continuous review
Strategy summits Co-destiny task force

Fair and elaborative revenue sharing model

Change in Key Success Factors

Optimization in R & D The cost and interval of introduction of new products through the R&D should be optimized

Focus on Innovation With a view of possible increase in use of computers, Xerox must bring in new facilities to integrate printers, scanning and photocopying options

After Sale Service should be top notch

The service offered on the products after sale should be better than industry standards

Consider the different options for reorganization listed in Exhibit 11. Select one option in each functional area and be prepared to explain why you prefer it over the others ?

Marketing Relationship: Independent and Separate

The present model is independent and separate, so less BPR required Over 94% of the Xerox & Rank Xerox, low volume units were of Fuji Xeroxs design. Hence, overlapping of territories would essentially mean two separate companies selling the same product, leading to duplication of resources There would be duplication of resources in mid and high volume units as well Independent marketing provides leeway for individual organizations to leverage of competitive advantage in particular territories The pricing techniques differ in the 3 organizations ( from cost markup in FX to acceptable gross profit in Xerox) There is scope for renegotiation of territories especially in South Pacific region where Rank Xerox has control but Fuji Xerox would have competitive advantage Partners like Rank may not be willing to go for coordinated marketing scheme

Contd
Research: Coordinated
Goes in line with the continuing trend of cooperation in R&D Core competency of FX and Xerox are different with FX specializing in low volume units while Xerox focusing on mid and high volume units Manufacturing Licensing Fee offers incentives for continued innovation The skills complimented each other with Americans known for their ingenuity while Japanese being adept at manufacturing skills The coordinated development would allow them to be a step ahead of competitors due to better sharing of knowledge on changing technological environment especially coming from Japanese competitors Duplication of resources can be avoided

Contd
Development & Manufacturing: Complementary with Overlap
Various government policies (like Japanese governments restriction on imports, US governments policies to protect labor employment) prevent manufacturing facilities to exclusively manufacture and export products The cost of transporting products would be avoided Competency and knowledge sharing on R&D and best practices in manufacturing can be enjoyed by FX and Xerox Massive cost savings have been made in US manufacturing facility due to increased coordination and knowledge sharing with their Japanese counterparts Core competency of Xerox is in mid and high volume units while FX is in low volume units Concentrated efforts can go research in specific designs without duplication of resources

Thank you