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Marketing Strategy Analysis

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Read and reflect on the case study involving the CEO of Xerox on page 145 of your textbook. In a two-to-three page paper, describe the principles of the bureaucratic structure. Explain why flattening hierarchies and empowering teams is a strategy. Analyze what divisional structures are presented (product, geographic, and market). Conclude with your thoughts on how organizational design models and structures impact organizational development. CASE FOR ANALYSIS Ursula Burns Succeeds Anne Mulcahy as CEO of Xerox In the early 2000s Xerox, the well-known copier company, was near bankruptcy because aggressive Japanese competitors were selling low-priced digital copiers that made Xerox’s pioneering light-lens copying process obsolete. The result was plummeting sales as U.S. customers bought Japanese copiers and Xerox was losing billions of dollars. Xerox searched for a new CEO who had the management skills to revitalize the company’s product line and the person chosen to lead the company’s transformation was Anne Mulcahy, a 26-year Xerox veteran. Mulcahy had begun her career as a Xerox copier salesperson, transferred into human resource management, and then used her considerable leadership and communication skills to work her way up the company’s hierarchy to become its president. As the new CEO, the biggest organizational challenge Mulcahy faced was to find ways to reduce Xerox’s high operating costs but, at the same time, find ways to develop innovative new lines of copiers. Specifically, she had to decide how to invest the company’s research dollars to develop desperately needed new kinds of digital copiers that would attract customers back to the company and generate new revenues and profits. Simultaneously achieving both these objectives is one of the biggest challenges a manager can face, and how well she performed these tasks would determine Xerox’s fate—indeed its very survival.4 To find a solution to this problem, Mulcahy, known as an unassuming person who as CEO prefers to stay in the background, focused her efforts on involving and listening to Xerox’s managers, employees, and customers describe its problems. Mulcahy began a series of “town hall” meetings with Xerox employees, asked them for all kinds of creative input and their best efforts, but told them that tough times were ahead and that layoffs would be necessary. At the same time she emphasized that only their motivation to work hard and find ways to reduce costs and develop new products could save the company. To discover how the company should best invest its R&D budget, Mulcahy made reaching out to customers her other main priority. She insisted that managers and engineers at all levels should visit, meet, and talk to customers to uncover what they most wanted from new digital copiers—and from Xerox. During one of her initiatives, called “Focus 500,” which required Xerox’s top 200 managers to visit its top 500 customers, Mulcahy came to increasingly appreciate the skills of Ursu.

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