Porter’s Five Forces Analysis of Xerox
|Industry||Business Services & Supplies|
|Founded||April 18, 1906|
|Headquarters||Norwalk, Connecticut in USA|
|Revenues||$ 7.04billion 2021, $ 7.11billion 2022|
|Profit/Loss||$ (455) million 2021, $ (328) million 2022|
|Competitors||Canon,HP, IBM, Accenture, Genpact, Konica Minolta and Ricoh|
Xerox is a multinational firm based in the United States that sells, print and digital document products as well as services. Through its subsidiary, the company offers printing and digital document goods and services globally. Xerox was created on April 18, 1906 and is based in Norwalk, Connecticut. Xerox produced around $7 billion in sales worldwide in 2021. The net value of Xerox Holdings as of January 3, 2023 is $2.27B. Xerox had a net income of 455 million US dollars from its ongoing activities in 2021. Printers and multi-functional peripherals are examples of their document management technology.
Porter’s Five Forces Analysis
Porter’s Five Forces Analysis is a widely used model to evaluate companies’ strategies in reference to its industry for neutralizing the competition and increase the margins, it is developed by Professor Micheal E. Porter in 1979, at Harvard Business School.
Xerox Rivalry among Existing Competitor
- Xerox Business Segments: Its digital technology offers customized and on-demand printing, which can save inventory and warehousing expenses. The Office segment caters to global, national, and small to medium-sized business clients. Xerox office segment also handles government, education, and even other public sector clients. Business operations for Paper and other substrates, wide format systems, consulting services, and Small Office or Home Office related supplies helps to generate revenue for Xerox.
- Xerox Global Operations Year 2021: Xerox has assets of worth US$13.22 billion. Xerox manufactures production publishers, electronic printers, fax machines, scanners, networks, software, and supplies in moreover to its famous copiers. In 2021 Xerox launched a business under the name of Xerox Financial Services and in 2022 it was rebranded to FITTLE. Xerox announced the launch of Eloque, an Australian joint venture to commercializeIoT sensor-based technologies and services for monitoring the structural health of bridges.
- Canon: Canon, Inc. develops, manufactures, and sells office multifunction devices, copiers, printers, cameras, and lithography equipment. Canon is headquartered in Tokyo, Japan. In 2022, it made $32 billion in revenue and $2 billion in profit. Its assets are valued at $41.3 billion.
- HP Inc.: HPprovides personal computer and other access devices, image and printing products, related technologies, solutions, and services.HP is headquartered in Palo Alto, California.In 2022, it made $65 billion in revenue and $6.5 billion in profit. HP has assets of worth $38.9 billion.
- Ricoh: Ricoh Co., Ltd. develops, manufactures, sells, and provides services for imaging systems, industrial printers, and network equipment. Ricoh is headquartered in Tokyo, Japan. In 2022, it created $16.1 billion in revenue and $117.7 million in profit. It has assets of $15.3 billion.
- Investment in Research & Development-Marketing Cost and Brand Image: Xerox noticed the changing business trends and in order to diversify the business they invested in digital and financial services. Xerox Holdings Corporationannounced the launch of CareAR Holdings LLC as a software company in September 2021, along with a $10 million investment from digital workflow provider ServiceNow, Inc.
Xerox Threat of New Entrants
- Global Printing and Office Supplies Industry: Xerox is an industry leader in document outsourcing services. According to a third-party research, the print technology and managed print services (MPS) industry will expand by 1% till 2024, and Xerox plans to increase its efficiency to meet the desired targets.
- High Capital Investment- Trained Human Resources: Global IT spending is predicted to rise by 2.4 percent in 2023. The Xerox Learning and Development (L&D) unit has been employing various types of digital technology to teach and reskill individuals. For example, Xerox is working with the second cohort of Vista, a one-year intensive development program designed to accelerate the careers of highest-potential employees and early-in-career professionals throughout the organization.
- High Research & Development Cost: In 2023, global IT spending is estimated to reach around $4.66 trillion USD. PARC at Xerox incorporates the research activities conducted at its locations of Palo Alto in California, Webster in New York, Cary Town in North Carolina, and Toronto, Canada. Majority of these technologies are in their early phases of development.
- Technological Advancement: ElemX, is a 3D liquid metal printer of Xerox brand. It is the simplest production-grade metal printer to set up. It provides a faster cycle time while reducing the expensive facility upgrades necessary for powder-based technologies by employing wire instead of powder.
Xerox Bargaining Power of Suppliers
- Supplies Industry Influencer: Xerox mentioned in their Annual Report 2021 that due to supply chain interruptions, their backlog of equipment and IT gear increased to approximately $350 million. However, in next years they expect growth in their IT services that will also help to reduce the impact of supply chain disruptions.
- Suppliers Collaboration:Xerox supply chain operations focus on a network of world-class logistics providers for warehousing and shipping. Reverse Logistics is an important component of their sustainability objective, and these activities are carried out attheir location of Cincinnati in Ohio, and also with a global network of partners in Canada and Europe.
Xerox Bargaining Power of Buyers
- High Product Differentiation: Xerox’s 3D liquid metal printer calledElemX installations at Vertex Manufacturing and Oak Ridge National Laboratory strengthened the market position of Xerox.ElemX was released in 2021 as part of a cooperation with the United States Naval Postgraduate School.
- Customer Satisfaction – After Sales Services: Xerox is providing diverse products and services in more than 160 countries. 40% of the sales revenue is generated from the customers based outside of USA. During pandemic with changing trends in workplace and customer demands Xerox adopted innovation and creative business methods.
- Government Rules & Regulations:Xerox has contracts with different local and international clients including the state Government. They have focused on providing the timely service and products while abiding by the laws and regulations formed within and outside of USA.
Xerox Threat of Substitute Products or Services
- IT, Printing and Office Supplies:The worldwide printer and copier market sales volume climbed by 2% in 2021 to 110.4 million units, up from 100.4 million units in 2020. To support innovation and development in market, Xerox is expanding its IT Services company globally and with increased capabilities, including an expansion of its products to encompass software, cyber security, Robotic process automation, and other digital solutions.
- Brand Loyalty: For Xerox as a brand technology, performance, pricing, quality, dependability, brand reputation, distribution, and customer service are all factors that provides it a competitive edge and customer loyalty in the industry.
- Post-COVID 19 Market: During COVID-19 supply chain disruptions and hybrid offices affected the revenue and demand of Xerox. In 2021, post-sale revenue accounted for 78% of overall revenue, which included contractual services, equipment maintenance, supplies, and finance.
- Forbes, Profile, Xerox
- Forbes, Profile, Canon
- Forbes, Profile, HP
- Forbes, Profile, Ricoh
- Statista (March 2022) Xerox’s global annual net income from 2008 to 2021(in million U.S. dollars). Statista.Availableat.Statista
Statista (March 2022) Xerox’s global annual revenue worldwide from 2008 to 2021(in billion U.S. dollars)| Statista. Statista.Availableat.Statista.
- Statista (September 2022) Printer and copier market volume growth worldwide from 2015 to 2027|Statista.Availableat Statista
- Statista (October 2022) |Information technology (IT) spending forecast worldwide from 2012 to 2023, by segment(in billion U.S. dollars)| Statista. Statista.Availableat. Statista.
- Xerox Full Year Results and Annual Report 2021.Available at Xerox
- Statista (January 2023) |Information technology (IT) spending year-over-year growth worldwide from 2016 to 2023, by segment| Statista. Statista.Availableat. Statista
- Xerox Takes On Supply Chain Complexity And Fragility With Metal 3D Printing (February,08, 2021) available atForbes