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 energy prices, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
High cash cycle compare to competitors
Xerox Acs 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
