The Xerox Business Model: How It Revolutionized the Copier Industry
In the 1960s, Xerox Corporation revolutionized the copier industry with its unique business model. The company became a household name for providing the first plain paper copier that could produce permanent copies. This revolutionary business model made Xerox a leading company in the photocopy industry for decades. In this article, we’ll dive into Xerox’s business model and how it drastically changed the industry.
The Early Days of Xerox
Before its major breakthroughs, Xerox Corporation was known as The Haloid Photographic Company, a small company famous for producing photographic paper. In the early 1950s, Haloid was looking for new markets to expand its business, and that’s how they became interested in photocopy technology. They found a small firm called Battelle Memorial Institute, which had developed a new type of copier that used electrostatic charges to produce copies.
The Xerox 914
In 1959, Xerox introduced the first plain paper copier that could produce permanent copies, the Xerox 914. This copier was a game-changer for the industry. Prior to Xerox’s introduction, copier machines were expensive and time-consuming to operate, often making blurry or smudged copies.
The Xerox 914 was easy to operate and provided reliable results. It was also affordable, costing around $27,500, which was cheaper than other copiers on the market at the time. The Xerox 914 was an immediate success, and within a few years, the company had sold over 200,000 units worldwide.
The Xerox Business Model
The Xerox business model was the core of the company’s success. The company realized that even though the copier machine was revolutionary, it was the ongoing use of the copier, maintenance, and services that was where the real profit lay. By providing low-cost rentals, Xerox attracted a large customer base who were hooked on the convenience of using copiers.
Xerox also invested heavily in developing a team of knowledgeable technicians who could install, maintain, and repair machines. The company also provided around-the-clock support to ensure the machines were operational, which made the company stand out in the photocopy industry. With a focus on customer service and support, Xerox developed a loyal customer base that was hard to break.
The Evolution of Xerox’s Business Model
By the end of the 1970s, Xerox was a household name in the photocopy industry. While it continued to focus on its core business model, the company also diversified its business to other industries such as computers and printers.
However, by the late 1990s, the company began to struggle due to an increase in competition from cheaper copiers produced in Japan and China. Xerox moved to restructure its business, cutting costs and streamlining its operations. The company also developed new products that were more affordable and user-friendly, such as the WorkCentre printer.
Key Takeaways
Xerox’s business model revolutionized the copier industry by providing low-cost rentals, a team of knowledgeable technicians, and around-the-clock support. The company’s focus on customer service and support developed a loyal customer base. Xerox’s success inspired other companies to emulate its business model, leading to increased competition in the industry. However, Xerox’s business model continues to influence the industry to this day.
