Xerox: Outsourcing Global Information Technology Resources SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Xerox: Outsourcing Global Information Technology Resources
In order to increase revenues, develop new technologies, and manage information technology more efficiently, Xerox decided to sign a 10-year, $3.2 billion contract with Electronic Data Systems (EDS). This case describes the events that preceded Xerox's decision to outsource information technology.
Swot Analysis of "Xerox: Outsourcing Global Information Technology Resources" written by Lynda M. Applegate, Kevin Davis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xerox 3.2 facing as an external strategic factors. Some of the topics covered in Xerox: Outsourcing Global Information Technology Resources case study are - Strategic Management Strategies, Innovation, IT, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Xerox: Outsourcing Global Information Technology Resources casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing transportation and logistics costs,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Xerox: Outsourcing Global Information Technology Resources
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Xerox: Outsourcing Global Information Technology Resources case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xerox 3.2, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xerox 3.2 operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Xerox: Outsourcing Global Information Technology Resources can be done for the following purposes –
1. Strategic planning using facts provided in Xerox: Outsourcing Global Information Technology Resources case study
2. Improving business portfolio management of Xerox 3.2
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xerox 3.2
Strengths Xerox: Outsourcing Global Information Technology Resources | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xerox 3.2 in Xerox: Outsourcing Global Information Technology Resources Harvard Business Review case study are -
Effective Research and Development (R&D)
– Xerox 3.2 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Xerox: Outsourcing Global Information Technology Resources - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Xerox 3.2 is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Xerox 3.2 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Xerox: Outsourcing Global Information Technology Resources Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Xerox 3.2 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xerox 3.2 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Technology & Operations field
– Xerox 3.2 is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Xerox 3.2 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Xerox 3.2 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xerox 3.2 has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Technology & Operations industry
– Xerox: Outsourcing Global Information Technology Resources firm has clearly differentiated products in the market place. This has enabled Xerox 3.2 to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Xerox 3.2 to invest into research and development (R&D) and innovation.
Analytics focus
– Xerox 3.2 is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lynda M. Applegate, Kevin Davis can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Xerox 3.2 are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Xerox 3.2 is one of the most innovative firm in sector. Manager in Xerox: Outsourcing Global Information Technology Resources Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Xerox 3.2 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Xerox: Outsourcing Global Information Technology Resources HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Xerox 3.2 is one of the leading recruiters in the industry. Managers in the Xerox: Outsourcing Global Information Technology Resources are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Xerox 3.2 has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Xerox: Outsourcing Global Information Technology Resources | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xerox: Outsourcing Global Information Technology Resources are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Xerox: Outsourcing Global Information Technology Resources, in the dynamic environment Xerox 3.2 has struggled to respond to the nimble upstart competition. Xerox 3.2 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynda M. Applegate, Kevin Davis suggests that, Xerox 3.2 is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Xerox: Outsourcing Global Information Technology Resources that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Xerox: Outsourcing Global Information Technology Resources can leverage the sales team experience to cultivate customer relationships as Xerox 3.2 is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Xerox 3.2 supply chain. Even after few cautionary changes mentioned in the HBR case study - Xerox: Outsourcing Global Information Technology Resources, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xerox 3.2 vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Xerox: Outsourcing Global Information Technology Resources HBR case study mentions - Xerox 3.2 takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Xerox 3.2 is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Xerox 3.2 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xerox 3.2 to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Xerox 3.2 has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Xerox 3.2 has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Xerox 3.2 has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Xerox: Outsourcing Global Information Technology Resources should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Xerox 3.2 has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Xerox: Outsourcing Global Information Technology Resources has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xerox 3.2 's lucrative customers.
Opportunities Xerox: Outsourcing Global Information Technology Resources | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Xerox: Outsourcing Global Information Technology Resources are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xerox 3.2 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Buying journey improvements
– Xerox 3.2 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Xerox: Outsourcing Global Information Technology Resources suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Xerox 3.2 has opened avenues for new revenue streams for the organization in the industry. This can help Xerox 3.2 to build a more holistic ecosystem as suggested in the Xerox: Outsourcing Global Information Technology Resources case study. Xerox 3.2 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xerox 3.2 can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Xerox 3.2 has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Xerox 3.2 can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Manufacturing automation
– Xerox 3.2 can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Learning at scale
– Online learning technologies has now opened space for Xerox 3.2 to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Xerox 3.2 can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Xerox 3.2 can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xerox 3.2 in the consumer business. Now Xerox 3.2 can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xerox 3.2 can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Xerox: Outsourcing Global Information Technology Resources, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Xerox 3.2 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Xerox: Outsourcing Global Information Technology Resources - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xerox 3.2 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Xerox 3.2 can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Xerox: Outsourcing Global Information Technology Resources External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Xerox: Outsourcing Global Information Technology Resources are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Xerox 3.2 business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Xerox 3.2 high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Xerox 3.2 is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xerox 3.2 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Xerox 3.2 can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Xerox 3.2 in the Technology & Operations sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xerox 3.2 can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Xerox: Outsourcing Global Information Technology Resources .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Xerox 3.2 needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xerox 3.2 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Xerox 3.2
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Xerox 3.2.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Xerox 3.2 needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Weighted SWOT Analysis of Xerox: Outsourcing Global Information Technology Resources Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Xerox: Outsourcing Global Information Technology Resources needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Xerox: Outsourcing Global Information Technology Resources is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Xerox: Outsourcing Global Information Technology Resources is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Xerox: Outsourcing Global Information Technology Resources is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Xerox 3.2 needs to make to build a sustainable competitive advantage.