Xerox Analysis

1047 Words Oct 14th, 2008 5 Pages
Xerox: Value Chain Analysis
Overview
Xerox Corporation (Xerox) values its research and development activity as one of its core competencies and primary profit engines. Xerox specifically states that it views its technology and the development thereof as being a key link in its value chain: “technology-a past, present and future strong suit for Xerox. We routinely invest 6 percent of our revenues in research, development and engineering”(“True” 5). This amount of financial investment in this core competency informs both analysts and stakeholders where the first link in Xerox’s value chain is. The value chain can be described as, “...the sequence of major business activities that add utility (usefulness) to the products or services
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This is the case with Xerox’s new market creation in its digital technology solutions for traditional printing enterprises which was simply linked up with its other core competencies in printing and document management.
Financial Analysis
Overview
Xerox reported stellar performance figures for 2005 and it appears set to match or exceed those figures for 2006. In 2005 Xerox reported earnings of $978m which amounted to 94 cents per outstanding share and represented an increase of 9% year on year over the previous reporting period (“True” 5). While it is certain that Xerox, being technology company heavily dependent on a value chain centred on intangible services, is susceptible to a certain amount of instability in the global market, its financial health should allow it to weather any periodic downturn. Especially since Xerox has reduced its debt structure from approximately $10b to $7.3b which is offset by operating cash flows of $1.4b (“True” 5). It is clear the Xerox not only redefined its value chain but it correctly assigned the appropriate resources to its key profit centres as well. Xerox’s

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