Xerox Holdings Corporation, commonly referred to as Xerox is an American corporation that distributes print and digital document services and products to more than 150 nations. The company’s headquarters are in Norwalk, Connecticut. However, most of the organization’s employees are based within New York, because that is where the firm was founded. Xerox is a large developed firm which is consistently listed amongst the fortune 500 companies. Nonetheless, the organization still has several weaknesses which the firm’s management needs to improve upon to create a competitive advantage in the industry.
Xerox is mainly dependent on mature markets for revenues. Markedly, the company raises a significant amount of income from the mature markets in Europe and the U.S. Nonetheless, the high dependence on these specific markets exposes the firm to the volatile economic and political conditions for these markets.
Then, Xerox is faced with the challenge of decreasing revenues. The firm has gone through the problem of its revenues, reducing in the recent past. The main cause for the decrease is an increase in competition, especially on the document technology market. Similarly, although the products which the company produces are a success regarding sales, the positioning and unique selling proposition is not defined clearly. Consequently, this results in the competitors attacking this segment of the firm. This makes the company be at risk because a decrease in revenue translates to mean the company is not competitive, and the rivals in the industry can push them out of the market.
Furthermore, Xerox Company has an issue with its strategic direction. The company is not highly efficient in integrating organizations which have different work culture from itself. Despite the company being successful at integrating small firms, it has its share of failure for merging firms that have diverse work culture. Thus, the challenges which are brought about by the new entrant in the industry results to Xerox losing the small market share, which it has in its niche categories. The firm needs to build an internal feedback mechanism from its sales team for it to tackle the challenge effectively.
The firm also mainly employees local workers, and there are very few staff from diverse racial backgrounds. Consequently, the lack of diversification makes it hard for people from different racial background to adjust to the workplaces. Thus, the company loses various competent employees due to lack of cultural diversification in the firm.
The financial planning of Xerox is not efficiently and properly done. Currently, the liquid asset ratio and current asset ratios show that the firm can use its money in a more efficient manner than how it is doing it now. The company has a low current ratio which shows that the ability of the firm to meet its short term financial obligations is below the industry average. Markedly, this translates to mean that the firm can end up having liquidity issues in the future. Moreover, the firm has low amounts of current assets compared to current liabilities, which can also result in liquidity issues for its operations.
Furthermore, high employee turnover rates are also a weakness of Xerox. When compared to its competitors, Xerox has more employees leaving the firm. Consequently, the company spends more on recruitment and training of employees because they keep on joining and leaving. Similarly, there is a decrease in the morale of the workers who are left in the firm after their peers leave. The people left behind feel discouraged since their peers get greener pastures, which can lower their productivity at work.
Additionally, Xerox has a weakness in its research and development strategies. Although Xerox spends a significant amount of money on research and development expenditure, most of the firm’s competitors in the industry are devoting more resources. Consequently, the firm’s competitors have a significant advantage which results in the production of re competitive products.
Xerox lacks effective workforce both at junior and even managerial levels. For instance, the company has a very low budget on quality control department when compared to competitors. Consequently, the end products are not consistent, which can possibly damage. Similarly, the firm lacks effective managerial talent, which results in long-lasting effects that adversely affect the whole organization. Likewise, the company workload is a high per worker because they are fewer workers as compared to the actual work needed. Consequently, the workers go through psychological stress which makes them less productive. The company only has few goods that have a high market share, but most of its products have a low percentage in the market. The over-reliance on only a few products makes the firm vulnerable to external threats because the new products can suffer from various market conditions.
Therefore, there are several weaknesses which Xerox needs to deal with for the firm to have a competitive advantage against its rivals in the industry. There is low employee morale, and the turnover rate is high, which results in the firm spending enormously on recruitment and training. Similarly, there is an issue with the firm’s financial planning, and the firm only relies on very few products in the product line. Therefore, the principal shareholders should put into consideration all the weaknesses and come up with effective strategies for the business to increase productivity.