Xerox Corp: Surviving the Competitive Crisis

Xerox Corporation: Surviving the Competitive Crisis

Xerox introduced the plain-paper copier in 1959 inventing a whole new industry, by the middle of the 1970’s anti-trust legislation force the company to license its patents to its main competitors and its market share fell from 100% to less than 15%.

The case study below, Xerox Corporation: Surviving the Competitive Crisis* documents this rise, fall and reemergence as the world-class company it is today.

The following excerpts are from the document:

On November 2, 1989, Xerox’s Business Products and Systems organization, which accounted for about 75 percent of Xerox revenues, received the Malcolm Baldrige National Quality Award.

At the ceremony with President George Bush, Kearns expressed the need for continuing improvements, noting that quality was a race without a finish line. “As you get better, so does the competition.”

The Quality Improvement Strategy began in 1980.

Kearns, then senior vice president, recognized the need for a comprehensive quality strategy to meet and surpass the competition.

He had read Phillip Crosby’s “Quality is Free.” Crosby argued that 20% of a company’s costs were due to its lack of quality. For a company with $10 billion in revenues, that equaled $2 billion.

In consultation with two dozen of Xerox’s highest ranking executives, Kearns created a process that became known as Leadership Through Quality.

By the end of 1988, all 100,000 of Xerox employees had received a minimum of 28 hours of quality training. In four years, four million man-hours of training had been given at a cost of $125 million.

In 1987, president Paul A. Allaire changed the corporate priorities at Xerox Corporation. “Effective immediately, the order is number one: customer satisfaction; number two: ROA (return on assets); number three: market share.”

*©Copyright 1996 by William R. Boulton, Olan Mills Professor of Strategic Management, Auburn University. All rights reserved. This case was developed with the sponsorship of The Thomas Walter Center for Technology Management.

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