CASE STUDY 11:

How Xerox Lost and Regained International Competitiveness

Question: Explain and illustrate how Xerox improved efficiency and international
competitiveness.
Case Analysis
Before the Arrival of Japanese firms in the Market:
o Xerox Corporation was a monopoly as it was the only corporation to manufacture
copying machine.
o They were the one who sets the price of the product.
o They didnt pay attention on improving quality, increasing customers satisfaction as well
as reducing the manufacturing cost.
o As can be seen in the graph at the right, there is a little decrease
in quantity demanded for an increase in price.

After the Arrival of Japanese firms in the Market

Quantity Demanded

o In 1970, the Japanese firms came into the picture which targeting the lower end of the
market and offering better copiers at lower costs.
o Japanese firms positioned themselves to move up the more profitable mid and high-end
segments of the market.
o Xerox finally got alarmed about the seriousness of the Japanese threats and starting to
lose their shares.
o Xerox begins to implement steps in regaining its market.

Corrective Measures Taken by Xerox Corporation

1. Benchmarking is the process of comparing ones business processes and performance
metrics to industry bests and/or best practices from other industries.
o Why are others better?
o How are others better?
o What can we learn?
o How can we catch up?

o How can we become the best in our industry?

PROCESS OF BENCHMARKING

2.

Implementation of quality control

How to Implement Total Quality Management?

o There must be a quality commitment from all employees of the organization.
o Organization must follow a modern quality improvement culture on a constant basis.
o Continuous improvement must take place in all policies, procedures and activities laid
down by management for the organization.
o Cooperation and experience of employees must be utilized to improve strategies and
enhance performance.
o Focus on customers requirements and satisfaction of their expectations is very important
for a long-term survival of the business.
o Effective control must be laid down to monitor and measure the real performance of the
business.
3. Adoption of management by objectives (Employee involvement was greatly increased.)

It is important that employees are involved or have knowledge about whats going on
the organization in order to increase their commitment on the organizational success.
Employee involvement was based on the following practices:
o Sharing information to one another.
o Increasing the knowledge of the employees about the operation and activities of
the company.
o Giving rewards to the best performance an employee have done.
o Redistributing power within an organization, putting labor on more equal footing
with the interest of management by letting workers be represented by a small
group of employees who actually participate.
4. Reduction of cost on suppliers and inventories
Working with a smaller group of suppliers who understands the needs of your
business and priorities can still be possible to make the business succeed. Use the
suppliers expertise to improve design manufacturability and reduce product cost.
Suppliers may suggest alternatives or different material to produce a specific
design. As a result, the end product may be easier to produce, and if the
production lead time is decreased, you wont need to keep as much inventory.
CASE STUDY 12:

To Reduce Costs, Firms Often Look Far Afield

Q1. How does looking from outside the box find ways to improve efficiency?
What does it mean to think from outside the box?
It means that it is to think beyond the ordinary or the obvious. It also means approaching
problems in new and innovative ways; conceptualizing problems differently; and understanding
your position in relation to any particular situation in a way youd never thought of before.
The following may help to stay out of the box and come up with new creative ways to
improved efficiency in businesses:
o It pays to keep an open mind.
- Look beyond the traditional ways of accomplishing tasks. We should always look for a
new strategy that could prove more productivity and improved work efficiency.
o Challenge yourself, and you will grow.

Learning new things and ideas will help in making sense of the things around us. We
should be willing to take new perspectives to day-to-day work.

Find a new door.

-

Figuring out what could be improved, challenged, done differently,

and done with less effort to achieve more.

Stop speaking and start listening.

-

It is about respecting the suggestions and ideas of others and

giving them a chance to speak for themselves.

A great to-do list is what you need

-

When an idea comes to you or you see something that you think could be
useful later, don't hesitate to save or jot down it.

Get rid of habits that inhibit your ability to change.

-

Avoid the negative attitudes like fear of failures which may hinder or
discourage a person to aim for the best.

Never rule out a new location.

-

Go to a place where you can encounter different kinds of people and share
ideas with them to learn something new.

Start reading outside your scope

-

Expose yourself in business magazine, journal or blog in an industry other

than your own that teaches how tasks or business processes are
accomplished in that sector. Those ideas that you can get from those could
be apply as a new strategy in improving business efficiency.

Q2: How does efficiency result in unit cost reduction in this reading?
Efficiency is about making the best possible use of resources. An increase in
productivity without any increase in cost means that the firm has improved
efficiency. Efficient firms maximize in producing outputs out of the given inputs
without affecting its cost. By improving efficiency, a business can reduce its costs
and improve its competitiveness.

Better productivity means increased in efficiency which results in a higher level of

competitiveness. In this case study, a firm improves their production by seeking creative insights
in industries far afield from their own means that they collect information from other industries.
Firms are increasingly looking after on other industries to come up with the new products and
better ways of doing things. If they achieved the techniques and strategies from the other
industries, firms can easily reduce the unit cost of products because it will b asy for the to
produce a better product.

CASE STUDY 13:

Tomorrows Factory

Q1: Compare and explain the average lost curves of todays and tomorrows factory.
Todays Factory focuses on producing different products. It has large factory enabling the
workers to manufacture easily. It employs for about 1,200 workers.
Tomorrows Factory focuses only on producing one or a very few related products. The
factory is generally small which limits the production. It gives employment to 400-600 workers
only. It will be located closer or exposed to potential customers for them to entice to buy the
products. The factory of the future will be incredibly efficient which has 100 times more
productive workers.

Q2: Explain each of the factors that will affect unit lost and capacity of tomorrows factory.

o The tomorrows factory will be generally smaller than todays factory

Production capacity is the volume of products that can be generated by a
production plant in a given period by using current resources. Since it will only
have a small space, the production capacity of the factory is also limited.
o The average factory is likely to employ from 400-600 workers only.
Technological advances like computer-aided design and computer-aided
manufacturing are widely used in any production line which greatly reduced the
man power in the factory.
o Only few related products are manufactured.
The workers of the factory will not be exposed in manufacturing and producing
different products. The choice of the customers will also be limited because the
products that will be available are also limited.