Xerox Corporation – one of the oldest and leading companies. The firm has been working in the IT industry for one century now. It sells a wide variety of printing and office equipment comprising printers, scanners and beneficial systems. In this blog, we will read about the SWOT Analysis of Xerox.
Let us now look deeply into the company and explore its strengths, weaknesses, threats and opportunities.
Xerox is an American-based corporation that is providing its services in around 160 countries. It has its headquarters in Norwalk, Connecticut, United States. The American corporation Xerox is also known as Xerox Holding Corporation. It is a public company in the world of information technology, which was formerly known as ‘Haloid Photographic Company’. It was founded 115 years ago on 18th April 1906 in Rochester, Newyork, U.S. by Joseph C. Wilson and Chester Carlson.
Xerox has its subsidiary in India known as Xerox India initially, it was known as Modi Xerox. It was established in 1983 and is based in Gurgaon, India. The company has Mr Leo Joseph as their Managing Director.
With their persistent efforts, the company has positioned itself on the list of Fortune 500 companies. Currently, the focus of the company is on document technology and document outsourcing business and it also trades on the NYSE (New York Stock Exchange).
Now that we have a good knowledge of the company, let us now look at the product list of Xerox.
Xerox has mainly 2 product lines- Office solutions and production solutions and under these 2 sections, the company has a wide range of products to offer.
The following list covers the majority of its products:
- Office printers
- Production printers and digital presses
- Multi-function printers
- Wide-format printers
- Scanner copies
Xerox has maintained its dominant position in the market by critically analyzing and reviewing the SWOT analysis. What does SWOT mean and how is it helpful? Let’s have a look below
SWOT Analysis of Xerox
SWOT analysis is a planning tool that helps an organization to determine its strengths, weaknesses, opportunities and threats. This tool is useful for strategy building, corporate planning, marketing, and finding competitive advantages. These attributes are divided into two factors: internal and external. Strengths and weaknesses are considered to be the interior factors while opportunities and threats are considered to be the external factors.
A company has control over its internal factors and by slow and steady massive changes these factors can be changed or improved. An organization does not have major control over external factors but still, optimum utilization of opportunities skillfully can help the organization to achieve great success, and responding to threats correctly by taking necessary steps can help reduce the risk of loss.
Now that we have a brief understanding of SWOT analysis, let’s examine the strengths, weaknesses, opportunities, and threats of Xerox Corporation.
1. Strengths of Xerox
Strengths can be defined as the activities at which the organization is doing well, its unique resources, and its strong points which differentiate it from others.
Let’s see the strengths of Xerox Corporation
- Xerox has successfully integrated several technology companies and has streamlined its operations so that it can create a highly reliable supply chain.
- It has built a strong distribution network over the years so that it can tap the majority of its potential market
- Xerox has good results on capital expenditure as it has successfully executed the new projects and also has built new revenue streams.
- Xerox has a successful trade record in building new products. Thus, It is great at Product innovation
- The company has been able to achieve a high level of customer satisfaction since it has a dedicated customer relationship management department for its potential users
- It has a strong free cash flow that enables them to have resources in their hand which facilitates the expansion of the company
- Xerox has built a strong dealer community by building a culture towards dealers and traders to promote products and invest in training the sales team so that they can obtain maximum benefits from the product
- They have managed to be at the leading market position in document technology by establishing managed print services (MPS) and since then it has been the market leader
- The annuity revenue model provides the company security and strong cash generation
2. Weaknesses of Xerox
Weaknesses can be broken down into the places where the organization is lacking in terms of resources, and technology. Factors on which it can improve and perform better, let’s understand these of Xerox-
- As a major portion of revenue for xerox is generated from the mature markets of the U.S. and Europe, it has been overly dependent on mature markets
- Due to increasing competition especially in the document technology market, Xerox has been facing a decrease in revenue which indeed is a case of a concern
- With its present culture, Xerox has been facing challenges in moving to another product segment which has led to limited success outside the core business.
- The marketing of the products can be enhanced, the product is successful in terms of sales and orientation but the company needs to focus on the positioning and the USP for it.
- Xerox needs to upgrade its technology as its products are not in sync with today’s advancing technology.
- Inefficiency while financial planning has led to lesser effective cash use according to current asset ratio and liquid asset ratio
- The profitability ratio and Net Contribution % of Xerox are below the industry average which is not a good sign
- Long term growth of xerox is impacted by higher days inventory as compared to competitors.
- Xerox only uses 1-2% of the research and development budget on new technology and evolution on their products, they should focus more on feature advancement.
3. Opportunities of Xerox
It refers to the chances whereby working smartly, an organization can turn its strengths into opportunities. By the knowledge of current trends and future planning, they can open new chances. Let’s see some examples of it for Xerox-
- The global printing market in the last few years has grown significantly which gives a positive outlook for digital printing
- Xerox can expand in new markets by introducing new strategies and bringing changes in the culture
- By entering new markets, Xerox can dilute its competitor’s market stake and eventually bring an increase in its market share
- By the year 2024 growth at a CAGR of 14.8% is expected in the managed print service market
- By the end of this year, growth at a CAGR of 10% is expected in the global healthcare BPO market, since Xerox also offers various health services, expansion of the company is possible
- To reduce its competition and expand geographically, Xerox has adopted strategic acquisition
- Lower shipping prices can lead to a decrease in the cost of transportation which will eventually lead to a decrease in production cost and hence Xerox has an opportunity to increase its profitability
- Online is the new normal – investing and focusing more on online channels and sales through them, is a significant opportunity for the company
- Xerox has a stable cash flow so it can invest in new technology and products to ultimately enter a new market
- The company should advance in human resource features and bring in relevant changes in services that are currently in demand
4. Threats of Xerox
Threats simply mean factors that can harm your company or the things that expose you to your company’s weaknesses. Keeping a check on the activities of your competitors is a way to reduce that harm. Let’s understand them for Xerox-
- It is an era of digitalization, people prefer paperless work and soft copies, which is a serious threat to the organization as an increase in the number of people preferring digitalization will lead to a decrease in the number of customers
- Xerox is driven by technological developments and there is intense competition in the market-leading to pricing pressure and hence the profitability gets affected
- The trends show a continuous decline in document technology as organizations are moving towards becoming carbon neutral, due to this Xerox will need to invest more in environmentally friendly products to stay competitive and relevant
- Growing strengths of local distributors also present a threat in some markets because the competition is paying higher margins to the local distributors
- With the advancing evolution of new technologies, competitors, and market disruptors introducing new products will be a major threat to the IT industry
- Xerox provides its services in various countries and liability laws in those countries are different, so it needs to change its policies frequently, and accordingly, otherwise it will face liability claims
- Xerox is majorly exposed to currency fluctuations given in the uncertain environment across different markets globally
- The fluctuating interest and exchange rates in different countries lead to unstable incomes and economic environments
- There is a rise in substitute products which is a collective threat for the whole industry
- There is a rise in new entries in the industry, which are gaining market share by diluting the existing market leaders’ share. It is a threat for Xerox as it can easily lose its existing customers
Now that we have understood SWOT analysis for Xerox, let’s understand the Industry analysis for it.
Industry Analysis of Xerox
Xerox comes under the IT industry which is very volatile as there are constant inventions and developments, even then Xerox has built its image. It has been called synonymous with print and photocopy which reflects its impact and dominance in the industry.
Although with the coming future everything is shifting towards online, and soft copies are replacing prints and papers. To cope with it, new entrants and competition- Xerox will need to work on its products and evolve with the technology, or else it will face the same repercussions that Kodak faced due to old technology. Xerox earned the number one position in worldwide market share and it’s been a market leader for several years for providing print solutions due to its services and products but it will have to enter new markets to maintain its growth and sustain its position in the market.
The company will have to launch new products which are relevant today and will have to focus more on the research and development part to evolve and invent new products. Growth in this industry is rising at a fast speed and there are a lot of scopes ahead.
Xerox is a remarkable and established company, the way it has maintained its position as a market leader is commendable. As far as its threats are concerned, the company needs to maintain relevance with time and enter new markets with new products.
By grasping opportunity at the right time and preventing threats from coming on their way it can overrule its competitors easily. The company has a significant market share and strong brand identity in the industry, it is just required to maintain and grow it in the coming years.
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