Xerox cuts prices in a bid to reclaim the office

NEW YORK — Xerox Corp. is focusing its efforts on aggressive pricing and bringing more value to customers in an attempt to reclaim the office.

That’s the message Ann Mulcahy, chairman and CEO of the Stamford, Conn.-based company, sent

out to customers, analysts and media in New York on Wednesday as 21 new office products were launched.

“”Growth is critical to our economy and to all of our customers, and I can tell you first hand that business as usual will not make it happen,”” she said, referring to the financial difficulties Xerox has publicly weathered over the past few years.

“”Despite a $65-billion investment in technology, despite cost cuts, rate cuts, tax cuts and every other cut you can think of, businesses today are still faced with one question: where is the growth? I won’t pretend to have the answer, but I think it boils down to the way that work gets done. That means taking a hard look at how people, processes and technology work together.””

This shift in strategy has been embraced by Xerox itself, which has not only enhanced its product lineup, but has revamped its own processes and changed the focus of some of its personnel.

Jim Miller, president of Xerox Office Group, said that one of these changes is in the way that its products are sold. Xerox will begin using resellers and distributors to sell multifunction devices, which is new territory for the company. It will also feature pricing online, which Miller described as typically vague in the past.

“”This is quite a departure for this marketplace. What we’re seeing and hearing from customers is that a high percentage — 35 to 40 per cent — visit Web sites of potential vendors as an early part of the decision process. So from our perspective, we felt it was critical to ensure that we were in a position of getting a higher percentage of customers to react with a realistic understanding of what the price would be,”” he said.

This is not a completely new approach for Xerox, according to Frank Albanese, research manager at IDC Canada Ltd. in Toronto.

“”They’ve always had pricing on the Web site, but now the prices will be lower,”” he said.

Another shift for the company will be a more serious focus on the small and medium business market. This segment has been overshadowed in the past with most Xerox sales professionals traditionally focused on major accounts, Miller said.

“”Small and medium business represents the biggest opportunity for us, which is why we’re attacking from a product, price and coverage solutions standpoint — you need to have all three elements to get at this market,”” he said.

This strategy features entry-level configurations of products so that customers can have access to appropriate technology at a more reasonable price.

“”There is no place for cookie cutter solutions,”” Mulcahy said. “”In the past, when Xerox lost to competition, we lost on price, not capability. Now we’re positioned to win on both.””

Also announced, was the launch of Xerox’s Office Document Assessment (ODA), a tool designed to evaluate a company’s document output and pinpoint areas for cost reductions. This is a positive repositioning for Xerox as more than a hardware provider, Albanese said.

“”Xerox is on the right track with ODA. With businesses continually looking for ways to save money, printing has been put under scrutiny and rightly so. By focusing on this area, Xerox is positioning itself as a solutions provider, and not only to major clients, but small and medium businesses to,”” he said. “”Expect other printing companies to try this as well.””

Whether they are successful or not, Xerox appears serious about being a true contender in the competition to take back the office, Albanese said, which Xerox estimates at being a market worth US$52-billion.

“”They’ve put into place certain things which would indicate that they’re serious about gaining market share in Canada and the U.S.,”” Albanese said. “”They’ve really lowered their prices, which is going to make it rough and tumble out there as more traditional printing companies compete for fewer and fewer dollars. Execution will tell the story in a few quarters.””

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