Post on 16-Feb-2017
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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
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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
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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