I was browsing through my October 24th issue of Bloomberg Businessweek and I skimmed past a colorful full page advertisement that consisted of passengers seated on a plane with a female office worker on the phone in her cubical. I continued to flip through the magazine, but quickly did a double take because I thought I saw the Xerox logo on the advertisement I just passed. I went back to the advertisement and was utterly confused by the verbiage displayed on the page. Xerox wasn’t advertising its latest high speed color copier; it was explaining how Virgin American Airlines benefited from Xerox’s new call center services.
Next, I visited www.RealBusiness.com which is a marketing tutorial that explains Xerox’s newly launched business services: IT, Finance & Accounting, Customer Care, and Human Resources. Xerox has repositioned itself as more than just a copier companies, but now into a complete office solutions management firm. Xerox underwent an extensive costly advertising campaign which has ideally paid off as the new offerings make up half of its current revenues.
Xerox has seen several ups and downs over the past decades including a resurgence to regain market share in the very competitive copier industry. Xerox began as an American copier company, with now 75% ownership residing with Japanese partner Fuji Photo Film Inc. Xerox is no doubt an international recognized as its office equipment offerings are used in offices all over the world. The Xerox name has always been one of the most identifiable in the copier industry as even Apple contemplated purchasing the company in the 1980s. Despite its strong brand presence, Xerox has battled and at times lost headway to the technology race with its competitors. For instance, Xerox was slow to reinvent itself and miscalculated the advancement of its consumer’s behavior and preferences, driving document technological advancements in the 1990s. Before its revival in the early 2000s, Xerox failed to recognize that businesses preferred to replace their paper flow with scanning and email capabilities. Konica Minolta and Ricoh for instance, jumped on the R&D band wagon sooner than Xerox, ultimately stealing away significant market share from Xerox.
Last year Xerox acquired Affiliated Computer Services Inc. (ACS), which was a Dallas based company that offered the outsourcing of business services, such as call center customer care. Through this acquisition, Xerox is hoping that hospitals for instance, will realize the combined benefits of its data management technology (proprietary software) and HR outsourcing offerings. Xerox is utilizing its strong international brand presence to offer a complete office management solution, or one-stop shopping.
Xerox earnings have been strong as many corporations are onboard with Xerox’s new endeavor, such as Michelin. The tire company has benefited from Xerox’s customer care solutions (outsourced call centers). Perhaps Xerox has learned from its past mistakes of not diversifying its offerings to offset possible future advancements in copier technology. Perhaps offices will go entirely paperless in the future, thus eliminating the need for scanning and copying all together… Consumer (B to B) behavior and their preferences will go green and more and more media will become digitized. Don’t get excited though because trees will still have to be knocked down for other paper products, including toilet paper. Unless of course, bidets make a marathon come back!
The evidence backs that Xerox is making a good move with its new campaign. Xerox’s new business service offerings are not unrelated to its existing copying and document management technologies – after all, the services rendered do occur in an office! Xerox has a powerful brand image and they aren’t veering away from its core competency, which is an inclusive office management solution. Xerox’s broker-type outsourcing of services for its clients, such as opening up call centers in India for Virgin America, is a great complimentary sales add-on. Xerox is simply making it easier for companies to gain access to outsourcing services. In my opinion, Xerox’s new offerings will sell well to smaller domestic businesses that have a need to save money by outsourcing their operations, but don’t have the resources or international know-how to set up their own outsourcing outfits in other countries.