Xerox and Fuji Xerox

1. ** Is Fuji Xerox a successful joint venture in 1990? How do you measure its performance?

Fuji Xerox was definitely a successful joint venture in 1990s, and its performance is measured by three different types of category as follows
 Financial measures
Its revenue out of Xerox’s increased by over 20% from less 5% in 1970s to approximately 30% in 1990s. (Refer to Exhibit 1). Also, during 1981-1989, while Xerox Corporation’s net income increases by only 17.7% from $598 million to $704 million, Fuji Xerox’s increased by approximately 252.2% from $46 million to $162 million. (Refer to Exhibit 5 & 7).
 Market measures
In 1989, Fuji Xerox holds 21% of total market share in Japan which is higher than Xerox’s 15% in the U.S. and Rank Xerox’s 12% in Western Europe. (Refer to Exhibit 3)
 Technology measure
Fuji Xerox’s technological competiveness rapidly grows: While its royalty payment to Xerox decreases, R&D spending and technology receipts increase. (Refer to Exhibit 9). As compared with the number of patents granted to Fuji Xerox in the U.S., Fuji Xerox’s number of patent registrations is much greater, and its growth is much faster as well. (Refer to Exhibit 10)

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

The following list summarizes the key success factors in their alliance in the past.

 Market environment in Japan (government policies)
 Fuji Xerox’s long-sighted management
 Ownership structure between Xerox and Fuji Xerox
 Lack of overlapping business activities between Xerox and Fuji Xerox
 Flexibility in contract/agreement process
 Effective and strategic exchange of technology

Of all the factors listed above, the most significant success factor is the 50/50 ownership of Fuji Xerox alliance which gave a level of autonomy to Fuji Xerox’s managers. As a result, it allowed them to carry forward a new product development and new marketing approaches in