Case study on Xerox's downfall - Analysis and remedies

Essay by satya255University, Bachelor'sA, June 2004

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Xerox Corporation, founded in 1906, is engaged in the document management business, offering an array of document products, services, and solutions. Being an icon of innovation for years (research carried out at Palo Alto Research Center) and a leader in the copier market, Xerox experienced decades of success. However, things drastically changed from the year 2000. Xerox's share price had fallen below $4, from a high of $64 a year earlier. Moreover, the copying and printing giants around the world (especially the Japanese companies) were taking chunks of its market share.

What caused the downfall of Xerox?

The downfall of Xerox is a result of technological change and management failure. The rapid change of the technology sector makes most of the technological companies suffer. However, the biggest problem of Xerox is internal. The failure includes all of the following: failure of protecting market share from competition; having been lagged in developing products with digital technology; board irresponsibility; traumatic sales-force reorganization; inefficient service-force reorganization; serious financial problems such as heavy short term debts, built up working capital and accumulated account receivables; ineffective transition from selling high-tech products to selling high-tech solutions and services which resulted in losing the direction of the company.

Why did management problems arise at Xerox?

There are many reasons: Lack of trust in CEO and dislike for CEO. Half-way measures, failure to commercialize innovations. To sum it up the problems are due to lack of proper leadership, cooperation and trust.

How would you characterize Xerox's managers' approach to planning, organizing, leading, and controlling over time?

In my opinion, Planning was good until the invention of ink-jet technology by HP. The company was also making profits and was doing well in the 'office and copying industry" until the managers at Xerox failed at planning by underestimating...