Themes: Operational Restructuring
Period : 1982 - 2002
Organization : Xerox
Pub Date : 2006
Countries : USA
Industry : Office Automation
In the early 1980s, Xerox found itself increasingly vulnerable to intense competition from both the US and Japanese competitors. According to analysts, Xerox's management failed to give the company strategic direction. It ignored new entrants (Ricoh, Canon, and Sevin) who were consolidating their positions in the lower-end market and in niche segments. The company's operating cost (and therefore, the prices of its products) was high and its products were of relatively inferior quality in comparison to its competitors. Xerox also suffered from its highly centralized decision-making processes. As a result of this, return on assets fell to less than 8% and marketshare in copiers came down sharply from 86% in 1974 to just 17% in 1984. Between 1980 and 1984, Xerox's profits decreased from $ 1.15 billion to $ 290 million (Refer Exhibit I).
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Benchmarking can be defined as a process for improving performance by constantly identifying, understanding and adapting best practices and processes followed inside and outside the company and implementing the results. The main emphasis of benchmarking is on improving a given business operation or a process by exploiting 'best practices,' not on 'best performance.'
Simply put, benchmarking means comparing one's organization
or a part of it with that of the other companies. Companies can adopt one or
more of the following types of benchmarking -
• Strategic Benchmarking: Aimed at improving a company's overall performance by studying the long-term strategies and approaches that helped the
'best practice' companies to succeed. It involves examining the core competencies, product/service development and innovation strategies of such companies.