How Fuji Xerox Saved Xerox
How Fuji Xerox Saved Xerox
The Xerox story is a classic one of a once- dominant company that lost its edge and was overcome by new rivals from unexpected sources. The difference this time is that Xerox relied on a constellation of allies to defend itself and ultimately to regain leadership in its industry.
The story begins in the 1960's, when the company's revolutionary plain-paper copiers took the industry by storm and made the name Xerox synonymous with photocopying. Xerox revenues grew at a record pace for an American business -- doubling every 10 months, from $40 million in 1960 to $1.2 billion in 1966.
Xerox patents on plain-paper copier technology and the company's extensive sales and service network sustained its virtual monopoly in the field.
Beginning in 1970, however, new competitors started chipping away at the
Xerox empire. Many of these competitors came from Japan and produced high- quality, low-cost machines. Some developed new technologies that circumvented Xerox patents; others benefited from American antitrust pressure on Xerox that led the company to license its key technologies.(2) More than 20 plain-paper copier vendors operated worldwide in 1975; by then the
Xerox share of worldwide copier revenues had plummeted to 60 percent, from 93 percent in 1971. Ricoh, the traditional leader in the Japanese market, became the top seller in the United States market in 1976.
David Kearns, who was then Xerox's chief executive, recalled the crisis his company faced at the end of the decade: "The
Japanese were selling products in the
United States for what it cost us to make them. We were losing market share rapidly, but didn't have the cost structure to do anything about it. I was not sure if
Xerox would make it out of the 1980's." 3
Initially, Xerox had done little to respond to the rising tide of Japanese competitors in the low-volume end of the business.
The Xerox story is a classic one of a once- dominant company that lost its edge and was overcome by new rivals from unexpected sources. The difference this time is that Xerox relied on a constellation of allies to defend itself and ultimately to regain leadership in its industry.
The story begins in the 1960's, when the company's revolutionary plain-paper copiers took the industry by storm and made the name Xerox synonymous with photocopying. Xerox revenues grew at a record pace for an American business -- doubling every 10 months, from $40 million in 1960 to $1.2 billion in 1966.
Xerox patents on plain-paper copier technology and the company's extensive sales and service network sustained its virtual monopoly in the field.
Beginning in 1970, however, new competitors started chipping away at the
Xerox empire. Many of these competitors came from Japan and produced high- quality, low-cost machines. Some developed new technologies that circumvented Xerox patents; others benefited from American antitrust pressure on Xerox that led the company to license its key technologies.(2) More than 20 plain-paper copier vendors operated worldwide in 1975; by then the
Xerox share of worldwide copier revenues had plummeted to 60 percent, from 93 percent in 1971. Ricoh, the traditional leader in the Japanese market, became the top seller in the United States market in 1976.
David Kearns, who was then Xerox's chief executive, recalled the crisis his company faced at the end of the decade: "The
Japanese were selling products in the
United States for what it cost us to make them. We were losing market share rapidly, but didn't have the cost structure to do anything about it. I was not sure if
Xerox would make it out of the 1980's." 3
Initially, Xerox had done little to respond to the rising tide of Japanese competitors in the low-volume end of the business.