Xerox is a name synonymous with printers and copiers. For decades, the company has been at the forefront of innovation, with a relentless focus on improving its products’ quality and efficiency. However, innovation is not limited to products alone. Xerox has also mastered the art of business model innovation to stay ahead in the game.
The company’s history is marked by several instances of business model innovation. In the 1960s, Xerox introduced the world’s first plain paper copier, which revolutionized the document management industry. However, the company realized that its growth could not be sustained by copiers alone. It needed to diversify its product portfolio and find new revenue streams.
One of the earliest examples of Xerox’s business model innovation is the creation of the Xerox PARC (Palo Alto Research Center) in 1970. PARC was established as a separate research entity to explore new technologies and business opportunities beyond copiers. It was at PARC that the first personal computer was invented, as well as advanced graphical user interfaces, Ethernet networking, laser printing, and object-oriented programming.
However, Xerox failed to capitalize on these innovations and lost the market opportunity to its competitors. It was not until the 1990s that the company realized its mistake and began to focus on commercializing emerging technologies. Xerox started licensing its inventions to other companies, which became a significant revenue stream for the company.
Another example of Xerox’s business model innovation is the creation of the Managed Print Services (MPS) business unit in 2004. MPS is a subscription-based service that provides businesses with a comprehensive print management solution, including printer hardware, software, supplies, and maintenance. MPS allows Xerox to shift its focus from selling hardware to selling services, which generates recurring revenue and creates a more predictable revenue stream.
In 2009, Xerox acquired ACS (Affiliated Computer Services), which provided the company with a platform to expand its services portfolio beyond document management. With ACS, Xerox became a major player in the business process outsourcing (BPO) industry, offering services such as finance and accounting, human resources, and customer care.
Xerox’s business model innovation has enabled the company to adapt to changing market dynamics and stay ahead in the game. By diversifying its product portfolio and revenue streams, Xerox has reduced its dependence on one product and has created a more sustainable business model. The company’s focus on commercializing emerging technologies and offering services to complement its products has allowed it to create a unique value proposition for its customers.
In conclusion, Xerox’s mastery of business model innovation has been critical to its success over the years. By continuously adapting to changing market dynamics and diversifying its revenue streams, Xerox has been able to stay ahead in the game. The company’s focus on emerging technologies and service offerings has allowed it to create a unique value proposition for its customers and build a more sustainable business model.
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