CASE – 1
THE XEROX COMEBACK.
Xerox is a famous copier producer. Throughout the 1960 and early 1970s it had a strong hold
of the international market.
Mid 1970s the Japanese started to offer small, inexpensive copiers. At the time the company
was bureaucratic (functions contradicted). Constant bickering between operating people and the
corporate staff. As a result:
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product development was slow
manufacturing costs were high
Bad service
Low customer satisfaction
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Strategy of the Japanese
Aggressive pricing to gain a sizable market share (about 40% of Xerox price)
Produce copiers at lower costs
Much quicker than Xerox in bringing new products to the market
As a result by the end of 1970s Xerox market eroded at alarming rates. By 1980 it was
obvious that Xerox had enormous problems.
WHAT SHOULD XEROX SHOULD DO?
CASE 2:
HARLEY-DAVIDSON VS. THE JAPANESE.
Harley-Davidson is a manufacturer of motorcycles, it is relatively small firm (than X with
only 2000 employees. it had mare than 78% of the American market by 1973. By late 1970s it was hit
hard by Japanese competition (Honda and other makers).
The Japanese had:
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Lower production costs
Lower prices
As a result Harley-Davidson’s share of the market fell to 31% by 1980.
Harley-Davidson discovered that it wasn’t robotics, or culture, or morning calisthenics and
company songs. The Japanese are professional managers who:
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Understand their business
Paid attention to details
(External conditions are high value of the dollar)
WHAT HARLEY-DAVIDSON SHOULD DO?
WHAT DID XEROX AND HARELY DAVIDSON DO
XEROX
deal with a wide variety of fundamental problems
instituted a formal system of benchmarking to identify successful practices of most successful rivals.
By emulation Xerox was able to:
cut costs
reduce prices
changed the product development process to reduce time for new products
Xerox comeback
HARLEY-DAVIDSON
they use many techniques to:
reduce costs
adopt the just-in-time production technique
improve marketing production and financial activities
by 1992 Harley-Davidson reported to expand their sales in Japan.