1

Xerox Business Design

GIE: 6087: Global Business Design

Report 3 by:Seyed- Morteza Lajevardi

Making the balance of payments 0

More money for reinvestment and

acquisitions Paying no dividends

Xerox has 1.01 billion outstanding share and paid about 0.27 dividends in currents year,By paying no dividends, Xerox could reinvest about 272,700,000 $ more in current year

1.https://finance.yahoo.com/q/ks?s=XRX 2. Baghai, M. Smith, S. Viguerie, P., Is your growth strategy flying blind?, Harvard Business Review

What if Xerox pays no dividends?

Advances in IT and Granular approach to dramatically growth

-Digging deeply the global market into micro markets; categorizing the global market to hundreds of micro segments-- Taking more rational and more rewarding investment decision

Granular approach and 2 dimensions to seize market

Portfolio momentum Mergers and acquisitions Market share gains1st dimension:

• Granular approach looks at portfolio momentum of market in extremely fine detail, It divides the business into geographic, customer and business slices and can make up to 4000 pockets

2d dimension in granular approach to seize the market: Company performance; the use of MRI tool

The conceptual of MRI approach is to find the relationship between shareholder value creation and three market potential components; which are Portfolio momentum, Mergers and acquisitions, Market share gains.Xerox can benchmark net growth rating of each fine segment to the net growth rating of related industry thus finding areas of weak and strong growth and quickly point to priorities for investment and divestment. The power of MRI is because of granularity. It is possible to analyse thousand of fine segments of market to get extremely detail data to find out areas of opportunity based on region and type of business.

Xerox will need a big team to implement granular approach

Xerox needs to develop responsibility for the pursuit of fine- grained opportunities to its 200 plus top leaders and all these leaders have to be well trained about granular approach.

Baghai, M. Smith, S. Viguerie, P., Is your growth strategy flying blind?, Harvard Business Review

http://www.xerox.com/corporate-citizenship-2015/our-commitment/company-profile.html

Xerox 2014 revenue by geography

The revenue stream is mostly from U.S, while there are good opportunities in Asia and other parts of the world, which currently has just small portion of Xerox revenue stream.

Xerox has dominated a small portion of 5.6% of 120 billion printers/supplies and has focused on service industry mainly in U.S

Source: IT Condor

Xerox current global research centers and suggested new research centers

: Xerox current research centers in U.S, Canada, India and France that are centralized to the Xerox Headquarters in U.S

: Suggested research centers to be established in Eastern Europe, Middle East, Africa and South America. It is recommended that all research centers become semi autonomous to discover local needs and research on projects that responds to the local needs.

Xerox current global research centers and suggested new research centers and their subordinate centers

: Xerox current research center in U.S, Canada, India and France that are centralized to the Xerox Headquarters in U.S

: Suggested research centers to be established in Eastern Europe, Middle East, Africa and South America. It is recommended that all research centers become semi autonomous to discover local needs and research on projects that responds to the local needs.

Fuji- Xerox zone

: Semi autonomous subordinate research centers that study on adaptation of products, services and needs of local markets and work closely with research centers

7

Global Printing industry

In north America, western Europe, and Australia the trend of printing growth is negative, while in the rest of the world is positive.

• Xerox has to reallocate its resources in printing industry from north America, western Europe, and Australia to Asia, Latin America , Eastern Europe, Middle East and Africa

8

Mission: Giving our client freedom to focus on their real businessValues: -Deliver quality and excellence – behave responsible as corporate citizen - use technology to develop market leadership- Require premium return on assets- Becoming “Glocal” to dominate new markets, Delivery of customized and diversified products based on local needs

-By innovation and R& D, Xerox creates world- class technology- Services-Worldwide suppliers’ network-- Manufacturing-- HR -- New Semi autonomous research center and their subordinates

- Diverse employees - Global partners and supply chain- Global clients with global and local needs-- Local clients with local needs- Shareholders- More diverse and customized products- More profitable investments benefits shareholders more- Attraction of more local talents

- No dividends Most productive and multi function products in the industry-Cost efficient - Helps companies become greener- Customers’ satisfaction-- Value our employees- More customized and diversified products and services with focusing on local market trends and needs

Offer

Creation

Character

Stakeholders

Xerox poles after changes

More customized

and diversified products and services with

focusing on local market trends

and needs

Attracts more customers, Builds

loyalty, responds to customers'’ needs,

stimulates customers’

engagement and make customers

recommenders for Xerox

More local research centers attracts local talents, help talents to think globally but

act locally, Helps local talents to develop

their skills and knowledge, builds loyalty with local

talents

Profitable investments

increases Xerox net profit, Xerox stock

price increases, builds investor

loyalty and make investors

recommenders for Xerox

Offer

Clients Shareholders

Talents

Xerox

Working capital

High revenue

Net cash from operating activities

Revenue from Annuity

Higher Net income from operating

Capitalizing on Xerox and market opportunities

Technological leadership

Optimize internal productivity and

infrastructure

Leverage distribution investment

Higher rate of Customer retention

and attraction

Employee benefit programs

Xerox partner programs and

incentives

Investment in semi autonomous local

subordinate research centers around the glob

along with research centers

Green strategy and solution , Six Sigma

approach

Customer brand trust

Quality after- sales support and worldwide

presence

Efficiency and productivity of

products

Differentiation in products and services

and global sales

Financing more customers and

partners

Higher Service sales growth

Total satisfaction guarantee

Xerox closed- loop supply chain

http://www.xerox.com/annual-report-2014/financial-highlights.html, https://www.macroaxis.com /invest/ratio/XRX--Working-Capital

Xerox Green operation

Xerox Prosperity Model

More rational acquisitions and more rewarding investments

Increasing partners globally

Costs reduction

Economy of scale and scope

No dividends payment

More diversified and localized products and

services

Granular approach; Using MRI tools

LearningsXerox and industry:1. Coherency among business poles2. Importance of supply chain • particularly Xerox use Closed- loop supply chain to increase efficiency and reducing costs• Xerox uses Supply Chain Management to achieve excellence supply chain• Financing partners and reward system3. Link between financial success and good business model 4. Xerox uses Six Sigma to achieve operational excellence5. The shift in document process management market from product industry to service

industry; Xerox has changed its business model to service industry to respond to the market shift

6. Xerox business model is annuity based to recruit significant revenue and cash generation; Xerox policy is to repurchase share, acquire and expand and pay stable dividends

7. The more competitive advantage the company has in market for its stakeholders, the lower the Porter forces on company will be

Key learning of business model:1. The link between credo, offer , creation and business success2. The business canvas; effective way to simplify any business model3. The effect of change in value proposition on different parts of business model such cost

structure4. Analysis of business models5. Typology in business model • Identifying the key drivers models• Proposing the taxonomy of business model• Offer and the level of diversification• Type of market

• Type of revenue streams• Origin of creation pole 6. Each business model has 4 poles•The character pole; which describes the DNA of company• The creation pole, which involves core processes and strategic resources• The stakeholders; which involves talent, enablers and clients• The offer pole; which describes offers proposed to stakeholders7. Designing the value creation network• Phase 1. List of all activities• Phase 2. Choosing stakeholders• Phase 3. Choosing the type of relationship and IT infrastructure 8. Purpose of being, Credo , mission, hypothesis, values & principles and vision 9. Reaction to Hypothesis by creation and offer10. Though in business model based on Tetrahedron, poles and flows are distinct, but

they are in connection with holistic business model, so analysis of business model will be easier (Tetrahedron is holistic business model)

11. Poles can help for taking important decision in designing business and its implementation

Though the Canvas are very useful to simply show the entire business model elements, but it does not have credo, mission, hypothesis, values & principles and vision of

business model

Thank you