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 - – increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , there is backlash against globalization, technology disruption, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, 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 -
Ability to lead change in Technology & Operations field
– Xerox Acs 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 Acs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Innovation driven organization
– Xerox Acs is one of the most innovative firm in sector. Manager in Xerox and Affiliated Computer Services (ACS) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– Xerox and Affiliated Computer Services (ACS) firm has clearly differentiated products in the market place. This has enabled Xerox Acs to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Xerox Acs to invest into research and development (R&D) and innovation.
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.
Diverse revenue streams
– Xerox Acs is present in almost all the verticals within the industry. This has provided firm in Xerox and Affiliated Computer Services (ACS) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Xerox Acs 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.
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.
Organizational Resilience of Xerox Acs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Xerox Acs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 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 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.
Lack of clear differentiation of Xerox Acs products
– To increase the profitability and margins on the products, Xerox Acs needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Products dominated business model
– Even though Xerox Acs 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 and Affiliated Computer Services (ACS) should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Xerox and Affiliated Computer Services (ACS), in the dynamic environment Xerox Acs has struggled to respond to the nimble upstart competition. Xerox Acs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Xerox Acs 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.
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.
Skills based hiring
– The stress on hiring functional specialists at Xerox Acs has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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.
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 -
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.
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.
Loyalty marketing
– Xerox Acs 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xerox Acs can use these opportunities to build new business models that can help the communities that Xerox Acs operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
Developing new processes and practices
– Xerox Acs 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xerox Acs is facing challenges because of the dominance of functional experts in the organization. Xerox and Affiliated Computer Services (ACS) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xerox Acs can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
Technology acceleration in Forth Industrial Revolution
– Xerox Acs has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Xerox Acs needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Xerox Acs demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xerox Acs in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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) .
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Xerox Acs.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Xerox and Affiliated Computer Services (ACS), Xerox Acs may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
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.
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.
Stagnating economy with rate increase
– Xerox Acs 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.
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.
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.
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.