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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing commodity prices, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, 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 -
Learning organization
- Xerox Acs 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 Acs is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Xerox and Affiliated Computer Services (ACS) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
High switching costs
– The high switching costs that Xerox Acs 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.
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.
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.
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.
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.
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.
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.
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 -
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.
Low market penetration in new markets
– Outside its home market of Xerox Acs, firm in the HBR case study Xerox and Affiliated Computer Services (ACS) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
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.
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.
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.
Need for greater diversity
– Xerox Acs has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Xerox Acs 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.
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.
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.
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.
Building a culture of innovation
– managers at Xerox Acs 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Xerox Acs to increase its market reach. Xerox Acs will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
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.
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 -
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 Acs business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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 .
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.
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.
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 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.
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.
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.
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.
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.
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.