Case Study Description of Xerox and Affiliated Computer Services (ACS)
In February 2010, Ursula Burns CEO of Norwalk, Connecticut-based Xerox Corporation wrapped up her first big move, just seven months after ascending to the top spot. Xerox-a document technology, software, services, and supplies company, had acquired Dallas-based Affiliated Computer Services (ACS), a major global player in business process outsourcing (BPO) and information technology services. The acquisition represented a bold move by Xerox into business process outsourcing, and the latest attempt to transform Xerox from a manufacturer of office equipment into a provider of business services. Burns argued that if she and her team could successfully combine Xerox and ACS, the company could achieve $100 million in synergies in the first year alone, with significant future growth prospects. External watchers and analysts, however, would be difficult to convince, though, as many argued that Xerox faced an uphill battle. This case explores Xerox's rationale for acquiring ACS and how Burns planned to achieve her vision of growth and expansion for a company well known for, but somewhat confined by its research and technology capabilities.
Swot Analysis of "Xerox and Affiliated Computer Services (ACS)" written by Jesper Sorensen, Victoria Chang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xerox Acs facing as an external strategic factors. Some of the topics covered in Xerox and Affiliated Computer Services (ACS) case study are - Strategic Management Strategies, Growth strategy, Leadership, Mergers & acquisitions, Strategic planning, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Xerox and Affiliated Computer Services (ACS) casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing commodity prices, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Xerox and Affiliated Computer Services (ACS)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Xerox and Affiliated Computer Services (ACS) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xerox Acs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xerox Acs 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 and Affiliated Computer Services (ACS) can be done for the following purposes –
1. Strategic planning using facts provided in Xerox and Affiliated Computer Services (ACS) case study
2. Improving business portfolio management of Xerox Acs
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 Acs
Strengths Xerox and Affiliated Computer Services (ACS) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xerox Acs in Xerox and Affiliated Computer Services (ACS) Harvard Business Review case study are -
Successful track record of launching new products
– Xerox Acs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xerox Acs 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Xerox Acs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xerox Acs has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Xerox Acs 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 Jesper Sorensen, Victoria Chang 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.
Highly skilled collaborators
– Xerox Acs 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 and Affiliated Computer Services (ACS) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Xerox Acs 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 and Affiliated Computer Services (ACS) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Xerox Acs in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Xerox Acs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Xerox Acs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xerox Acs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Xerox and Affiliated Computer Services (ACS) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Xerox Acs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Xerox and Affiliated Computer Services (ACS) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Xerox Acs is one of the leading recruiters in the industry. Managers in the Xerox and Affiliated Computer Services (ACS) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Xerox Acs in the sector have low bargaining power. Xerox and Affiliated Computer Services (ACS) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xerox Acs to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Xerox and Affiliated Computer Services (ACS) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xerox and Affiliated Computer Services (ACS) are -
Slow decision making process
– As mentioned earlier in the report, Xerox Acs has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Xerox Acs even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Xerox and Affiliated Computer Services (ACS), it seems that the employees of Xerox Acs don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Xerox and Affiliated Computer Services (ACS) HBR case study mentions - Xerox Acs 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xerox Acs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Xerox and Affiliated Computer Services (ACS) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Xerox and Affiliated Computer Services (ACS), it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Xerox Acs needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Xerox and Affiliated Computer Services (ACS), is just above the industry average. Xerox Acs needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Xerox Acs is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Xerox Acs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xerox Acs to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Xerox and Affiliated Computer Services (ACS) 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 and Affiliated Computer Services (ACS) can leverage the sales team experience to cultivate customer relationships as Xerox Acs is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Xerox and Affiliated Computer Services (ACS) 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 Acs 's lucrative customers.
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 Acs supply chain. Even after few cautionary changes mentioned in the HBR case study - Xerox and Affiliated Computer Services (ACS), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xerox Acs vulnerable to further global disruptions in South East Asia.
Opportunities Xerox and Affiliated Computer Services (ACS) | 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 and Affiliated Computer Services (ACS) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xerox Acs to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Xerox Acs to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Xerox Acs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xerox Acs 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.
Creating value in data economy
– The success of analytics program of Xerox Acs has opened avenues for new revenue streams for the organization in the industry. This can help Xerox Acs to build a more holistic ecosystem as suggested in the Xerox and Affiliated Computer Services (ACS) case study. Xerox Acs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Xerox Acs to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Xerox Acs 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 and Affiliated Computer Services (ACS) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xerox Acs to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Xerox Acs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Acs 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 Acs 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Xerox Acs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Xerox Acs can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xerox Acs 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 and Affiliated Computer Services (ACS), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Xerox Acs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Xerox and Affiliated Computer Services (ACS) 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.
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 Acs in the consumer business. Now Xerox Acs can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Xerox and Affiliated Computer Services (ACS) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Xerox and Affiliated Computer Services (ACS) are -
Environmental challenges
– Xerox Acs needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Xerox Acs can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
Increasing wage structure of Xerox Acs
– 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 Acs.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Xerox Acs will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Shortening product life cycle
– it is one of the major threat that Xerox Acs is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Acs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Regulatory challenges
– Xerox Acs 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.
High dependence on third party suppliers
– Xerox Acs 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.
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 Acs needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xerox Acs 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 and Affiliated Computer Services (ACS) .
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 Acs in the Technology & Operations sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xerox Acs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Xerox and Affiliated Computer Services (ACS) 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 and Affiliated Computer Services (ACS) 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 and Affiliated Computer Services (ACS) 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 and Affiliated Computer Services (ACS) 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 and Affiliated Computer Services (ACS) 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 Acs needs to make to build a sustainable competitive advantage.