Xerox Corporation

800 Long Ridge Road
Stamford, Connecticut 06904
U.S.A.
Telephone: (203) 968-3000
Toll Free: (800) 828-6396
Fax: (203) 968-3218
Web site: http://www.xerox.com

Public Company
Incorporated: 1906 as The Haloid Company
Employees: 59,300
Sales: $15.7 billion (2003)
Stock Exchanges: New York Chicago Boston Cincinnati Pacific Philadelphia London Swiss
Ticker Symbol: XRX
NAIC: 333315 Photographic and Photocopying Equipment Manufacturing; 334119 Other Computer Peripheral Equipment Manufacturing; 333313 Office Machinery Manufacturing; 518210 Data Processing, Hosting, and Related Services

Xerox Corporation, though virtually synonymous with photocopying, makes printers, scanners, fax machines, multifunction devices, and digital printing and publishing systems in addition to its flagship black-and-white and color copiers. The firm's related services operations encompass consulting, imaging, content management, and document outsourcing services. Increasingly expanding beyond its black-and-white offerings, Xerox now derives more then 20 percent of its revenues from color printers, copiers, digital presses, and related services and supplies. Approximately 45 percent of revenues are generated by the company's numerous overseas offices, subsidiaries, and joint ventures. Fuji Xerox Co., Ltd., a joint venture with Fuji Photo Film Co., Ltd., 25 percent owned by Xerox and 75 percent by Fuji, develops, manufactures, and distributes document processing products in Japan and the Pacific Rim (including Australia, New Zealand, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, Vietnam, China, and Hong Kong).

Origins As The Haloid Company in 1906

Xerox can trace its roots to 1906, when a photography-paper business named The Haloid Company was established in Rochester, New York. Its neighbor, Eastman Kodak Company, ignored the company, and Haloid managed to build a business on the fringe of the photography market. In 1912 control of the company was sold for $50,000 to Rochester businessman Gilbert E. Mosher, who became president but left the day-to-day running of the company to its founders.

Mosher kept Haloid profitable and opened sales offices in Chicago, Boston, and New York City. To broaden the company's market share, Haloid's board decided to develop a better paper. It took several years, but when Haloid Record finally came out in 1933 it was so successful that it saved the company from the worst of the Great Depression. By 1934 Haloid's sales were approaching $1 million. In 1935 Joseph R. Wilson, the son of one of the founders, decided that Haloid should buy the Rectigraph Company, a photocopying machine manufacturer that used Haloid's paper. To help pay for the acquisition, Haloid went public in 1936, and selling Rectigraphs became an important part of Haloid's business.

In 1936 Haloid's 120 employees went on strike for benefits and higher wages. When Mosher proved intransigent, Wilson stepped in and offered concessions. Tension and resentment between labor and management persisted until World War II. During the war the Armed Forces needed high-quality photo-graphic paper for reconnaissance, and business boomed. When the war ended Haloid faced stiff competition from new paper manufacturers.

Amidst this, Haloid needed to come up with new products, particularly following a showdown between Mosher, who wanted to sell Haloid, and Wilson, who did not. Wilson won, and in 1947 Haloid entered into an agreement with Battelle Memorial Institute, a nonprofit research organization in Columbus, Ohio, to produce a machine based on a new process called xerography.

Xerography, a word derived from the Greek words for "dry" and "writing," was the invention of Chester Carlson. Carlson was born in Seattle, Washington, in 1906 and became a patent lawyer employed by a New York electronics firm. Frustrated by the difficulty and expense of copying documents, Carlson in 1938 invented a method of transferring images from one piece of paper to another using static electricity. In 1944 Battelle signed a royalty-sharing agreement with Carlson and began to develop commercial applications for xerography.

Debut of the XeroX Copier in 1949

In 1949, two years after Haloid signed its agreement with Battelle, Haloid introduced the XeroX Copier, initially spelled with a capital X at the end. The machine, which required much of the processing to be done manually, was difficult and messy to use and made errors frequently. Many in the financial community thought that Haloid's large investment in xerography was a big mistake, but Battelle engineers discovered that the XeroX made excellent masters for offset printing, an unforeseen quality that sold many machines. Haloid invested earnings from these sales in research on a second-generation xerographic copier.

In 1950 Battelle made Haloid the sole licensing agency for all patents based on xerography, but Battelle owned the basic patents until 1955. Haloid licensed the patents liberally to spread the usage of xerography to such corporations as RCA, IBM, and General Electric. In 1950 Haloid sold its first commercial contract for a xerographic copier to the State of Michigan. Meanwhile, Haloid's other products were again highly profitable, with paper sales increasing and several successful new office photocopying machines selling well.

In 1953 Carlson received the Edward Longstreth Medal of Merit for the invention of xerography from the Franklin Institute. In 1955 Haloid revamped its 18 regional offices into showrooms for its Xerox machines instead of photo-paper warehouses, hired 200 sales and service people, began building the first Xerox factory in Webster, New York, and introduced three new types of photography paper. Haloid also introduced the Copyflo, Haloid's semiautomatic copying machine. In 1956 Haloid President Joe Wilson, Joseph R. Wilson's son, formed an overseas affiliate called Rank Xerox with the Rank Organisation Plc, a British film company seeking to diversify. This arrangement paved the way for Xerox factories in Great Britain and a sales and distribution system that brought Xerox machines to the European market.

1960: The Xerox 914 Copier, an Instant Hit

In 1958 Haloid changed its name to Haloid Xerox Inc., reflecting its belief that the company's future lay with xerography, although photography products were still more profitable. That balance quickly changed with the success of the Xerox 914 copier. Introduced in 1960, it was the first automatic Xerox copier, and the first marketable plain-paper copier. The company could not afford a blanket advertising campaign, so it placed ads in magazines and on television programs where it hoped business owners would see them. The company also offered the machines for monthly lease to make xerography affordable for smaller businesses.

Demand for the 650-pound 914 model exceeded Haloid Xerox's most optimistic projections, despite its large size. Fortune later called the copier "the most successful product ever marketed in America." Sales and rental of xerographic products doubled in 1961 and kept growing. In 1961 the company was listed on the New York Stock Exchange, changed its name to Xerox Corporation, and photography operations were placed under the newly created Haloid photo division. In 1962 Xerox formed Fuji Xerox Co., Ltd. in Japan with Fuji Photo Film Co., Ltd. Also during the 1960s Xerox opened subsidiaries in Australia, Mexico, and continental Europe. The company had sunk $12.5 million into developing the 914 copier, more than Haloid's total earnings from 1950 to 1959, and the 914 had led the company to more than $1 billion in sales by 1968. In 1963 Xerox introduced a desktop version of the 914, Although this machine sold well, it was not very profitable, and Xerox depended on its larger machines thereafter.

With its suddenly large profits, Xerox began a string of acquisitions, purchasing University Microfilms in 1962 and Electro-Optical Systems in 1963. The market for copiers continued to expand at such a rate that they remained Xerox's chief source of revenue. The 1960s were a tremendously successful time for Xerox, which became one of the 100 largest corporations in the United States and, in 1969, moved its headquarters to Stamford, Connecticut.

In the late 1960s Xerox began to focus its efforts on the concept of an electronic office that would not use paper. With this end in mind the corporation bought a computer company, Scientific Data Systems, in 1969, for nearly $1 billion in stock, only to have it fail and close down in 1975. Xerox also formed Xerox Computer Services in 1970, bought several small computer firms in the next few years, and opened the Xerox Palo Alto Research Center (PARC) in California.

In 1973 scientists at PARC invented what may have been the world's first personal computer. So innovative was the work of the PARC scientists that many features they invented later appeared on Apple Macintosh computers. In fact, in December 1989 Xerox would sue Apple Computer for $150 million, alleging that Apple had stolen the technology that helped make its computers so successful. Apple cofounder Steven Jobs, who later hired some researchers from PARC, claimed that his company had refined Xerox's work, and thus made it original.

PARC's innovations were largely overlooked by Xerox. The computer division and the copier division competed for resources and failed to communicate. Products were released by the office products division in Dallas, Texas, which PARC had never seen before. Disagreements broke out at Xerox headquarters at the suggestion of change, which further stifled innovation.

Company Perspectives:

Our strategic intent is to help people find better ways to do great work—by constantly leading in document technologies, products and services that improve our customers' work processes and business results.

Struggling Through the 1970s and 1980s

In April 1970 IBM introduced an office copying machine, giving Xerox its first real competition. IBM's machine was not as fast or as sophisticated as the Xerox copiers, but it was well built and was backed by IBM's reputation. Xerox responded with a suit charging IBM with patent infringement. The dispute was settled in 1978 when IBM paid Xerox $25 million. Meanwhile, Xerox itself became a defendant in several antitrust violation investigations, including a lawsuit by the Federal Trade Commission. Distracted from its market by legal battles, Xerox lost its lead in the industry when Kodak came out with a more sophisticated copier. IBM and Kodak followed a strategy similar to that of Xerox, leasing their machines and attracting many large accounts on which Xerox depended.

According to most critics, Xerox had become inefficient during this time, as its executives had concentrated too heavily on growth during the 1960s. Xerox had spent hundreds of millions of dollars on product development but introduced few new products. Engineers and designers were divided into small groups that fought over details as they missed deadlines. While the company sought to perfect the copying machine, it failed to challenge the new products on the market, and Xerox's market share dropped.

By 1985 Xerox's worldwide plain-paper copier share had dropped to 40 percent, from 85 percent in 1974. Yet Xerox's revenues grew from $1.6 billion in 1970 to $8 billion in 1980, partially because Xerox began to sell the machines it had been renting, thus depleting its lease base.

Beginning in the mid-1970s, Japanese products emerged as an even more dangerous threat. Xerox machines were big and complex and averaged three breakdowns per month. The Japanese firm Ricoh Company, Ltd., however, introduced a less expensive, smaller machine that broke down less often. The Japanese strategy was to capture the low end of the market and move up. By 1980 another Japanese competitor, Canon Inc., was challenging Xerox's market share in higher-end machines.

In the late 1970s Xerox began reorganizing, making market share its goal and learning some lessons about quality control and low-end copiers from its Japanese subsidiary. The company also cut manufacturing costs drastically. Xerox regained copier market share, but intense price competition kept copier revenues around $8 billion for most of the 1980s.

In 1981 Xerox finally began releasing new products, beginning with the Memorywriter typewriter. This typewriter soon outsold IBM's and captured over 20 percent of the electric typewriter market. By January 1983 Xerox had unveiled a Memorywriter that could store large amounts of data internally. In 1982 the 10-Series copiers, the first truly new line since the 1960s, was introduced. These machines used microprocessors to regulate internal functions and were able to perform a variety of complicated tasks on different types of paper. They were also smaller and far less likely to break down than earlier Xerox copiers. The 10-Series machines used technology developed at PARC, which was becoming more integrated with the company. Xerox began gaining market share for the first time in years, and morale improved.

Xerox also released computer workstations and software and built a $1 billion business in laser printers. The workstations proved an expensive flop, however, and by 1989 the company closed its workstation hardware business. Xerox also moved to protect its 50 percent share of the high-end market in the United States with machines that made 70 or more copies per minute. The major high-end competition was Kodak, but the Japanese, led by Ricoh, were again launching a drive for this market.

During the 1970s Xerox had also diversified into financial services. In 1983 it bought Crum and Forster Inc., a property casualty insurer, and in 1984 it formed Xerox Financial Services, Inc. (XFS), which bought two investment-banking firms in the next few years. By 1988 XFS supplied nearly 50 percent of Xerox's income—$315 million of the $632 million total. XFS performed well, able to raise funds at a low cost because it was backed by the Xerox "A" credit rating.

Key Dates:

1906:

The Haloid Company is founded in Rochester, New York, as a photography-paper business.

1935:

Haloid buys Rectigraph Company, a maker of photocopying machines.

1936:

Haloid makes its first public offering of stock.

1938:

Chester Carlson invents a method of transferring images from one piece of paper to another using static electricity, a process dubbed xerography.

1947:

Haloid enters into an agreement with Battelle Memorial Institute to produce a photocopying machine based on xerography.

1949:

Company introduces the XeroX Copier.

1956:

Haloid expands into Europe through the creation of Rank Xerox, a joint venture with the Rank Organisation Plc, a British film company.

1958:

Company changes its name to Haloid Xerox Inc.

1960:

Introduction of the Xerox 914, the first automatic, plain-paper copier, proves to be a huge success.

1961:

Company is renamed Xerox Corporation, and its stock is listed on the New York Stock Exchange.

1962:

Xerox joins with Fuji Photo Film Co., Ltd. in creating the 50–50 joint venture Fuji Xerox Co., Ltd.

1969:

Headquarters for Xerox are moved to Stamford, Connecticut.

1970:

Xerox Palo Alto Research Center opens in California.

1982:

The 10-Series copier line debuts.

1994:

Xerox begins touting itself as The Document Company and increases emphasis on digital products.

1995:

Company increases its stake in Rank Xerox to 80 percent.

1997:

Xerox buys out its European partner in Rank Xerox, which is subsequently renamed Xerox Limited.

1998:

XLConnect Solutions Inc. is acquired.

2000:

Xerox acquires Tektronix, Inc.'s color printing and imaging unit; as red ink begins to flow, massive restructuring is launched.

2001:

Xerox sells half of its stake in Fuji Xerox to Fuji Photo Film for more than $1.3 billion; manufacturing outsourcing relationship with Flextronics International Ltd. begins.

2002:

Company agrees to pay $10 million civil penalty to settle the charges of accounting fraud.

Xerox spent more than $3 billion on research and development in the 1980s looking for new technologies, such as those for digital and color copying, to promote growth. Xerox was a leader in developing technologies, but often had trouble creating and marketing products based on them, particularly computers.

A Late 1980s Comeback

In 1988 Xerox underwent a $275 million restructuring, cutting 2,000 jobs, shrinking its electronic typewriter output, dropping its medical systems business, and creating a new marketing organization, Integrated Systems Operations, to get new technologies into the marketplace more effectively. Xerox's comeback was so impressive that in 1989 its Business Products and Systems unit won the U.S. Congress's Malcolm Baldridge National Quality Award for regaining its lead in copier quality. Xerox had demonstrated its ability to change in the late 1970s when it responded to the first wave of Japanese competition.

In 1990 when David T. Kearns, CEO since 1932, retired to become U.S. Deputy Secretary of Education, and Paul A. Allaire, a career Xerox man, was named to replace him, industry analysts speculated that Allaire would have to repeat the feats of the 1970s if Xerox were to survive as an independent corporation. A restructuring of company management occurred almost immediately. The office of the president was transformed into a document processing corporate office led by Allaire and including Executive Vice-Presidents A. Barry Rand and Vittorio Cassoni, and Senior Vice-Presidents Mark B. Myers and Allan E. Dugan. Two years later, Xerox announced plans to restructure the company as well. Three customer service operations units were created in Connecticut, New York, and England. In addition, nine document processing business units were established, each of which was headed by a president responsible for the profitability of the unit.

During the seven-month period from September 1990 to March 1991, Xerox introduced five new types of computer printers: the Xerox 4350, Xerox 4197, Xerox 4135, Xerox 4235, and Xerox 4213. These printers were designed to handle a wide variety of office needs from two-color printing to desktop laser printing. In October 1990 the Docu-Tech Production Publisher signaled Xerox's intent to take advantage of what the company foresaw as an industry move from offset printing to electronic printing and copying.

The introduction of the Xerox 5775 Digital Color Copier was met with great fanfare and was expected to rejuvenate sales. Xerox also continued to update and improve its facsimile machines by developing a personal-sized model that could be used as a copier as well as a telephone, and by developing thermal, recyclable fax paper. In May 1992 Xerox introduced Paperworks, software making it possible to send documents to a fax machine directly from a PC.

Despite these new products, financial and legal woes continued to plague Xerox in the early 1990s as American economic conditions worsened. After earnings of $235 million in the fourth quarter of 1990, Xerox reported only $91 million in profits for the same period the following year. Earlier in 1990, just four months after the creation of the X-Soft division, which was to develop and market the company's software products, Xerox announced that it would lay off 10 percent of X-Soft's employees. In February 1992 the company offered severance pay to 6,000 of its American employees in an attempt to reduce the workforce by 2,500 by July.

By the end of 1991, Xerox was announcing the sale of three of its insurance wholesalers. Crum and Forster sold Floyd West & Co. and Floyd West of Louisiana to Burns & Wilcox Ltd. London Brokers Ltd. was sold to Crump E & S. Moreover, several lawsuits resulted in losses for Xerox during this time. In February 1992 Xerox was ordered to pay Gradco Systems, Inc. $2.5 million to settle a patent dispute, and a suit settled in favor of Monsanto a month later was expected to cost Xerox $142 million to clean up a hazardous waste dump site.

Emergence of The Document Company in the Mid-1990s

With its core office products businesses on the upswing, Xerox announced in January 1993 that it intended to exit from insurance and its other financial services businesses. Later that year Crum and Forster was renamed Talegen Holdings Inc. and was restructured into seven stand-alone operating groups in order to facilitate their piecemeal sale. This exit took several years, however, and was delayed when a 1996 deal to sell several units to Kohlberg Kravis Roberts & Company for $2.36 billion collapsed. During 1995 two of the groups were sold for a total of $524 million in cash. In 1997 three more were sold for a total of $890 million in cash and the assumption of $154 million in debt. Then in January 1998 Xerox completed the sale of Westchester Specialty Group, Inc. to Bermuda-based ACE Limited for $338 million, less $70 million in transaction-related costs. Finally, Xerox in August 1998 sold its last remaining insurance unit, Crum & Forster Holdings, Inc., to Fairfax Financial Holdings Limited of Toronto for $680 million.

As it was exiting from financial services, Xerox was also beginning to shed its image as a copier company. In 1994 Xerox began calling itself The Document Company to emphasize the wide range of document processing products it produced. A new logo included a red "X" that was partially digitized, representing the company's shift from analog technologies to digital ones. A number of new digital products were developed over the next several years, including digital copiers that also served as printers, fax machines, and scanners (so-called multi-function devices). From 1995 to 1997 revenue from analog copiers was virtually stagnant, even falling slightly, whereas revenue from digital products enjoyed double-digit growth, increasing to $6.7 billion by 1997.

Xerox also shifted focus from black-and-white to highly sought-after color machines, with revenues from color copying and printing increasing 46 percent to $1.5 billion in 1997. The most notable introduction here was the DocuColor 40, launched in 1996, which captured more than 50 percent of the high-speed color copier market based on its ability to print 40 full-color pages per minute. Revitalized new product development at Xerox resulted in the introduction of 80 new products in 1997 alone, the most in company history and twice the number of the previous year. More Xerox products were being developed for the small office/home office market, with prices low enough that the company increasingly marketed its products via such retailers as CompUSA, Office Depot, OfficeMax, and Staples.

However, the new Xerox was about more than just office products. The company introduced DocuShare document-management software in 1997, providing a system for users to post, manage, and share information on company intranets. Xerox also gained the leading market share position in the burgeoning document outsourcing services sector through the 1997-created Document Services Group. This group offered such services as the creation of digital libraries, the design of electronic-commerce systems for Internet-based transactions, as well as professional document consulting services. In May 1998 Xerox bolstered its Document Services Group through the $413 million acquisition of XLConnect Solutions Inc. (renamed Xerox Connect) and its parent Intelligent Electronics, Inc. XLConnect specialized in the design, building, and support of networks for companywide document solutions.

The mid-1990s also saw Xerox launch a restructuring in 1994, leading to 10,000 job cuts over a three-year period. In February 1995 the company paid The Rank Organisation about $972 million to increase its stake in Rank Xerox to 80 percent. Then in June 1997 Xerox spent an additional $1.5 billion to buy Rank out entirely. With full control of the unit, Xerox renamed it Xerox Limited. That same month G. Richard Thoman, who had been senior vice-president and chief financial officer at IBM, was named president and chief operating officer of Xerox, with Allaire remaining chairman and CEO.

In April 1998 Xerox announced yet another major restructuring, as its shift to the digital world led it to spend more on overhead than its competitors. The company eliminated 9,000 jobs over the next two years, taking a $1.11 billion after-tax charge in the second quarter of 1998 in the process. The cuts came at a time when Xerox was enjoying record sales and earnings as well as a surging stock price, so the company was clearly proactive in maintaining the momentum it had gained through its impressive 1990s resurgence.

Late 1990s Downfall/Early 2000s Turnaround Effort

This resurgence, however, came to a crashing halt during the later months of 1999. For both the third and fourth quarters, Xerox was forced to issue warnings that its profits would be well below the expectations of Wall Street analysts, sending its stock tumbling. Sales and profits were hurt by a number of factors, several of which were out of the company's control: the strength of the dollar against European currencies; heightened competition from Japanese rivals, particularly Canon, which launched new lines of midrange and high-end copiers that ate into Xerox's market share; a slump in the sales of high-end copiers and printing systems late in the year because of Y2K fears; and a severe economic downturn in Brazil, a longtime key market for Xerox that had been responsible for about 10 percent of sales and an even-larger portion of profits. On top of these challenges, Xerox shot itself in the foot by botching two corporate restructurings. A consolidation of customer administration centers launched in 1998 led to chaos, including delayed and lost orders, unreturned phone calls, and billing errors. During 1999 Xerox reorganized its worldwide sales force, shifting about half of the 30,000-person operation from a geographic focus to an industry focus. Although this change was long overdue, it was not implemented smoothly, leading to disgruntled staffers, furious customers, and lost sales. Also burdening the company was servicing some $16 billion in total debt.

Early in 2000 Xerox acquired the color printing and imaging unit of Tektronix, Inc. for $925 million. The move made Xerox the number two player in the U.S. market for color laser printers, trailing only Hewlett-Packard Company. The deal was an important one, coming at a time when in many offices the proliferating computer printer was taking over some of the functions of the copier. Before it could bear fruit, however, a management shakeup jolted the company. As the firm's financial performance deteriorated, Thoman was forced to resign as CEO in May 2000. Allaire temporarily reassumed that position, and company veteran Anne M. Mulcahy was named president. By this time, Xerox's stock had fallen 60 percent from its level one year earlier.

In October 2000 the company reported a third-quarter loss of $167 million—its first quarterly loss in 16 years—and initiated the first of a string of restructuring programs. Aiming to slash $1 billion in annual operating expenses (6 percent of its total costs), Xerox placed a number of assets on the block. Late in the year it sold its subsidiaries in China and Hong Kong to Fuji Xerox for $550 million. Then in March 2001 Xerox sold half of its stake in Fuji Xerox itself to Fuji Photo Film for more than $1.3 billion in cash, reducing its interest in the joint venture to 25 percent. In another key move, Xerox outsourced about half of its worldwide manufacturing operations to Flextronics International Ltd., at the same time selling to Flextronics plants in Canada, Mexico, Malaysia, the Netherlands, and Brazil. Several other noncore operations were also sold off as part of this overhaul, which in total culled 11,200 positions from the payroll. During 2001 a separate restructuring, which aimed to sharpen the company's focus, saw Xerox eliminate product lines aimed at the small office/home office business segment. Approximately 1,200 more employees were laid off. Xerox eliminated its stock dividend that year in order to conserve cash, and in August, Mulcahy was named CEO. She replaced Allaire as chairman in early 2002.

Late in 2000 the Securities and Exchange Commission (SEC) launched an investigation into Xerox's accounting practices for the period from 1997 to 2000. The SEC eventually found that the company had been improperly accounting for revenues associated with office equipment it leased to customers, booking more of the lease revenue up front than was proper and thereby artificially—if temporarily—inflating revenue and, according the SEC, misleading investors. In April 2002 Xerox agreed to pay a record $10 million civil penalty to settle the charges. A few months later it restated its results for 1997 to 2001, shifting $1.41 billion in pretax income among the years. For instance, for 1998 the company now reported a pretax loss of $13 million rather than the previously reported pretax profit of $579 million, whereas the pretax loss for 2001 of $293 million was trimmed to $71 million. The SEC went after several Xerox executives as well. In June 2003 the agency reached an agreement with six executives (five former and one current, including Allaire, Thoman, and former CFO Barry Romeril), who agreed to pay $22 million in fines and other penalties. The SEC was highly critical of the managers, contending that they had personally profited from bonuses and stock sales that had been based on false financial results.

In addition to shedding unprofitable businesses and lines of business, and eliminating tens of thousands of workers from the workforce (which was reduced by one-third from the beginning of 2001 to the end of 2003, from 92,500 to 61,100), Xerox vastly improved its balance sheet. During 2002 a $7 billion line of credit was successfully renegotiated, while the following year saw the completion of a $3.6 billion recapitalization plan that included public offerings of common stock, the issuance of convertible preferred stock, and the securing of a new $1 billion credit facility. Total debt was reduced from $18.64 billion in 2000 to $11.17 billion in 2003. Perhaps most importantly, Xerox moved aggressively to regain lost market share by introducing 38 new products during 2002 and 2003 as well as a wide range of new document-related services. The product line placed particular emphasis on digital and color copiers and enhanced multifunction devices capable of printing, copying, scanning, faxing, and e-mailing.

Through Mulcahy's able leadership and dogged pursuit of a turnaround, Xerox was able to post strong results for 2003. Net income of $360 million was the firm's highest profit level since 1999. Xerox's stock rebounded in 2003 and 2004, although it remained well below the levels of 1999 and early 2000. Debt was reduced further during 2004 to less than $10 billion, and the now cash-rich company was poised to begin pursuing acquisitions again. From the real possibility of bankruptcy when she took over, Mulcahy had engineered at least the beginnings of a remarkable comeback, though the competitive environment showed no sign of becoming less brutal.

Principal Subsidiaries

Palo Alto Research Center Incorporated; Xerox Credit Corporation; Xerox Financial Services, Inc.; Xerox Canada Inc.; Xerox GmbH (Germany); Xerox Limited (U.K.). The company also lists some 250 additional subsidiaries in the United States, Canada, Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Nicaragua, Panama, Peru, Venezuela, Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, Yugoslavia, Egypt, Morocco, China, India, and elsewhere.

Principal Competitors

Canon Inc.; Ricoh Company, Ltd.; Hewlett-Packard Company; Sharp Corporation; Konica Minolta Holdings, Inc.

Further Reading

Alexander, Robert C., and Douglas K. Smith, Fumbling the Future: How Xerox Invented, Then Ignored, the First Personal Computer, New York: William Morrow, 1988, 274 p.

Arner, Faith, and Adam Aston, "How Xerox Got Up to Speed," Business Week, May 3, 2004, p. 103.

Bandler, James, and John Hechinger, "Six Figures in Xerox Case Are Fined $22 Million," Wall Street Journal, June 6, 2003, p. A3.

Bandler, James, and Mark Maremont, "Xerox to Pay $10 Million in SEC Case," Wall Street Journal, April 2, 2002, p. A3.

Bianco, Anthony, and Pamela L. Moore, "Downfall X: The Inside Story of the Management Fiasco at Xerox," Business Week, March 5, 2001, pp. 82–88, 90, 92.

Brady, Diane, Ira Sager, and Janet Rae-Dupree, "Xerox: Can New CEO Rick Thoman Turn Its Digital Dreams into Reality?," Business Week, April 12, 1999, pp. 92–96, 98, 100.

Byrne, John A., "Culture Shock at Xerox," Business Week, June 22, 1987, pp. 106+.

Byrnes, Nanette, "Xerox Is Dreaming in Color," Business Week, December 13, 2004, p. 70.

Byrnes, Nanette, and Anthony Bianco, "Xerox Has Bigger Worries Than the SEC," Business Week, August 12, 2002, pp. 62–63.

Campanella, Frank W., "Versatile Xerox: Company Builds Up Basic Copier Line, Moves to Diversify," Barron's, September 29, 1980, pp. 9+.

Dessauer, John H., My Years with Xerox, Garden City, N.Y.: Doubleday, 1971.

Deutsch, Claudia H., "Original Thinking for a Digital Xerox," New York Times, April 15, 1997, pp. D1, D6.

Driscoll, Lisa, "The New, New Thinking at Xerox," Business Week, June 22, 1992, pp. 120+.

Eisenberg, Daniel, "An Image Problem at Xerox," Time, October 30, 2000, pp. 63–64.

Hamilton, David P., "United It Stands: Fuji Xerox Is a Rarity in World Business: A Joint Venture That Works," Wall Street Journal, September 26, 1996, p. R19.

Jacobson, Gary, and John Hillkirk, Xerox: American Samurai, New York: Macmillan Publishing, 1986, 338 p.

Kahn, Jeremy, "The Paper Jam from Hell," Fortune, November 13, 2000, pp. 141–42, 146.

Kearns, David T., and David A. Nadler, Prophets in the Dark: How Xerox Reinvented Itself and Beat Back the Japanese, New York: Harper Business, 1992, 334 p.

Moore, Pamela L., "She's Here to Fix the Xerox," Business Week, August 6, 2001, pp. 47–48.

Morris, Betsy, "The Accidental CEO," Fortune, June 23, 2003, pp. 58–60+.

Narisetti, Raju, "Pounded by Printers, Xerox Copiers Go Digital," Wall Street Journal, May 12, 1998, pp. B1, B6.

——, "Xerox Aims to Imprint High-Tech Image," Wall Street Journal, October 6, 1998, p. B8.

——, "Xerox to Cut 9,000 Jobs Over Two Years," Wall Street Journal, April 8, 1998, pp. A3, A6.

——, "Xerox to Sell Crum & Forster for $565 Million," Wall Street Journal, March 12, 1998, p. B6.

——, "Xerox to Sell Resolution Group for $612 Million in Cash, Securities," Wall Street Journal, September 10, 1997, p. B4.

Nevans, Ronald, "Xerox's Billion-Dollar Mistake," Financial World, June 18, 1975, p. 9.

——, "Xerox Comes Through Its Mid-Life Crisis," Financial World, July 15, 1979, p. 18.

"The New Lean, Mean Xerox: Fending Off the Japanese," Business Week, October 12, 1981, pp. 126+.

Norman, James R., "Xerox Rethinks Itself—and This Could Be the Last Time," Business Week, February 13, 1989, pp. 90+.

Palmer, Jay, "Ready to Copy?," Barron's, May 29, 2000, pp. 27–28, 30.

Rudnitsky, Howard, "World's Largest Up and Comer," Forbes, May 18, 1987, pp. 78+.

Santoli, Michael, "Copy This: Xerox Image Is Brightening Again," Barron's, November 1, 2004, pp. 13–14.

Sheridan, John H., "A CEO's Perspective on Innovation," Industry Week, December 19, 1994, pp. 11–12, 14.

Siwolop, Sana, "Man of the Year: Xerox Chairman and CEO David T. Kearns," Financial World, December 12, 1989, pp. 56+.

Smart, Tim, "Can Xerox Duplicate Its Glory Days?," Business Week, October 4, 1993, pp. 56, 58.

——, "So Much for Diversification," Business Week, February 1, 1993, p. 31.

Smart, Tim, and Peter Burrows, "Out to Make Xerox Print More Money," Business Week, August 11, 1997, pp. 81+.

The Story of Xerography, Stamford, Conn.: Xerox Corporation, n.d.

Taub, Stephen, "Will Xerox Keep on Fading?," Financial World, February 15, 1983, pp. 14+.

Uttal, Bro, "Xerox Xooms Toward the Office of the Future," Fortune, May 18, 1981, pp. 44+.

Verespej, Michael A., "Xerox at a Crossroads," Industry Week, May 28, 1984, pp. 21+.

Vogel, Todd, "At Xerox, They're Shouting 'Once More into the Breach,' " Business Week, July 23, 1990, pp. 62+.

Weber, Thomas E., "Xerox to Pay $1.5 Billion to Buy Rank's Stake in Copier Venture," Wall Street Journal, June 9, 1997, p. B4.

Wysocki, Bernard, Jr., "Change Machine: Xerox Recasts Itself As Formidable Force in Digital Revolution," Wall Street Journal, February 2, 1999, p. A1.

"Xerox Tries to Capture Some IBM Territory," Business Week, October 12, 1974, p. 28.

Ziegler, Bart, "Success at IBM Gives Thoman Edge at Xerox," Wall Street Journal, June 13, 1997, pp. B1, B8.

Ziegler, Bart, and Leslie Scism, "Xerox Shares Fall 5.6% After Collapse of the Sale of Insurance Units to KKR," Wall Street Journal, September 13, 1996, pp. A2, A4.

Zweig, Phillip, "A Pale Copy," Financial World, October 20, 1987, pp. 20+.

—Scott M. Lewis

—updates: Mary McNulty;

David E. Salamie

Xerox Corporation

800 Long Ridge Road
Stamford, Connecticut 06904
U.S.A.
(203) 968-3000
Fax: (203)968-4312

Public Company
Incorporated: 1961
Employees: 111,400
Sales: $17.64 billion
Stock Exchanges: New York Midwest Boston Cincinnati Pacific Philadelphia London Paris Basel Berne Geneva Lausanne Zürich Amsterdam Düsseldorf Frankfurt

Xerox has become virtually synonymous with photocopying. Xerox was a small company in 1960 when its first practical copier was introduced, but the company zoomed into the Fortune 500 during the next few years. About 1,800 people worked there in 1959, and 55,000 in 1969.

The company began in 1906 as a photography-paper business named the Haloid Company, in Rochester, New York. Its neighbor, Kodak, ignored the company, and Haloid managed to build a business on the fringe of the the photography market. In 1912 control of the company was sold to Rochester businessman Gilbert E. Mosher for $50,000. Mosher became president but left the day-to-day running of the company to its founders. Mosher kept Haloid profitable and opened sales offices in Chicago, Boston, and New York City. To broaden the company’s market share, Haloid’s board decided to develop a better paper. It took several years, but when Haloid Record finally came out in 1933 it was so successful that it saved the company from the worst of the Great Depression. By 1934 Haloid’s sales were approaching $1 million. In 1935 Joseph R. Wilson, the son of one of the founders, decided Haloid should buy the Rectigraph Company, a photocopying-machine manufacturer that used Haloid’s paper. Haloid went public to raise the money, and selling Rectigraphs became an important part of Haloid’s business.

In 1936 Haloid’s 120 employees struck for benefits and higher wages. Mosher proved intransigent, and Wilson stepped in and offered concessions. Tension and resentment between labor and management persisted until World War II. During the war the armed forces needed high-quality photographic paper for reconnaissance, and business boomed. When the war ended Haloid faced stiff competition from new paper manufacturers.

Haloid needed to come up with new products, particularly after a showdown between Mosher—who wanted to sell Haloid to another company—and Wilson—who did not. Wilson won, and in 1947 Haloid entered into an agreement with Battelle Memorial Institute, a nonprofit research organization in Columbus, Ohio, to produce a machine based on a new process called xerography.

Xerography, a word derived from the Greek words for “dry” and “writing,” was the invention of Chester Carlson. Carlson was born in Seattle, Washington, in 1906, and was a patent lawyer employed by a New York electronics firm. Frustrated by the difficulty and expense of copying documents, in 1938 Carlson invented a method of transferring images from one piece of paper to another using static electricity. In 1944 Battelle signed a royalty-sharing agreement with Carlson and began to develop commercial applications for xerography.

In 1949, two years after Haloid signed its agreement with Battelle, Haloid introduced the XeroX Copier, spelled with a capital “X”. The machine required much of the processing to be done manually. The XeroX was difficult and messy to use and made errors frequently. Many in the financial community thought that Haloid’s large investment in xerography was a big mistake, but Battelle engineers discovered that the XeroX made excellent masters for offset printing, an unforeseen quality that sold many machines. Haloid invested earnings from these sales in research on a second-generation xerographic copier.

In 1950 Battelle made Haloid the sole licensing agency for all patents based on xerography, but Battelle owned the basic patents until 1955. Haloid licensed the patents liberally to spread the usage of xerography to corporations like RCA, IBM, and General Electric. In 1950 Haloid sold its first commercial contract for a xerographic copier to the state of Michigan. Meanwhile, Haloid’s other products were again highly profitable, with paper sales increasing and several successful new office photocopying machines selling well.

In 1953 Carlson received the Edward Longstreth Medal of Merit from the Franklin Institute, for the invention of xerography. In 1955 Haloid revamped its 18 regional offices to make them showrooms for its Xerox machines instead of photo-paper warehouses, hired 200 sales and service people, began building the first Xerox factory in Webster, New York, and introduced three new types of photography paper. Haloid also introduced the Copyflo, Haloid’s semi-automatic copying machine. In 1956 Haloid president Joe Wilson, Joseph R. Wilson’s son, formed an overseas affiliate called Rank Xerox with The Rank Organisation, a British film company seeking to diversify. This arrangement paved the way for Xerox factories in Great Britain and a sales and distribution system that brought Xerox machines to the European market. In 1958 Haloid changed its name to Haloid Xerox, reflecting its belief that the company’s future lay with xerography, although photography products were still more profitable. That balance quickly changed with the success of the Xerox 914 copier, introduced in 1960. It was the first automatic Xerox copier, and the first marketable plain-paper copier. The company could not afford a blanket advertising campaign, and placed ads in magazines and on television programs where it hoped business people would see them. The company also offered the machines for monthly lease to make xerography affordable for smaller businesses.

Demand for the 650-pound 914 exceeded Haloid-Xerox’s most optimistic projections, despite its large size. Fortune later called it “the most successful product ever marketed in America”. Sales and rental of xerographic products doubled in 1961, and kept growing. In 1961 the company was listed on the New York Stock Exchange and changed its name to the Xerox Corporation; photography operations became the Haloid photo division. In 1962 Xerox formed Fuji Xerox in Japan with Fuji Photo Film Company. Also during the 1960s Xerox opened subsidiaries in Australia, Mexico, and continental Europe. The company had sunk $12.5 million into developing the 914, more than Haloid’s total earnings from 1950 to 1959, but the 914 led the company to more than $1 billion in sales by 1968. In 1963 Xerox introduced a desktop version of the 914. Although this machine sold well, it was not very profitable, and Xerox has depended on its larger machines ever since.

With its suddenly large profits, Xerox began a string of acquisitions, purchasing University Microfilms in 1962 and Electro-Optical Systems in 1963. The market for copiers continued to expand at such a rate that they remained Xerox’s chief source of revenue. The 1960s were a tremendously successful time for Xerox, which became one of the 100 largest corporations in the United States, and, in 1969, moved to Stamford, Connecticut.

In the late 1960s Xerox began to focus less on copiers and more on designing an electronic office that would not use paper. With this end in mind the corporation bought a computer company, Scientific Data Systems, in 1969, for nearly $1 billion in stock, only to have it fail and close down in 1975. Xerox also formed Xerox Computer Services in 1970, bought several small computer firms in the next few years, and opened the Xerox Palo Alto Research Center (PARC) in California.

Scientists at PARC invented what may have the world’s first personal computer. So innovative was the work of the PARC scientists that many features they invented later appeared on Apple Macintosh computers. In December 1989 Xerox sued Apple Computer for $150 million, alleging that Apple had stolen the technology that helped make its computers so successful. Apple co-founder Steven Jobs, who later hired some researchers from PARC, claimed that his company had refined Xerox’s work, and thus made it original.

PARC’s innovations were overlooked by Xerox; the computer division and the copier division competed for resources and failed to communicate. Products were released by the office products division in Dallas, Texas, that PARC had never seen before. Disagreements broke out at Xerox headquarters at the suggestion of change, further stifling innovation.

In April 1970 IBM introduced an office copying machine, giving Xerox its first real competition. IBM’s machine was not as fast or as sophisticated as the Xerox copiers, but it was well built and was backed by IBM’s reputation. Xerox responded with a suit charging IBM with patent infringement. The dispute was settled in 1978 when IBM paid Xerox $25 million. Meanwhile, Xerox itself became the defendant repeatedly for antitrust violations, including a suit by the Federal Trade Commission.

Distracted from its market by these legal battles, Xerox lost its lead in the industry when Kodak came out with a copier that was more sophisticated than Xerox’s. IBM and Kodak followed a strategy similar to that of Xerox, leasing their machines and attracting many large accounts on which Xerox depended.

Xerox had become inefficient as its executives concentrated on growth during the 1960s. Xerox had spent hundreds of millions of dollars on product development but introduced few new products. Engineers and designers were divided into small groups that fought over details as they missed deadlines. While the company sought to perfect the copying machine it failed to challenge the new products on the market, and Xerox’s market share dropped.

By 1985 Xerox’s worldwide plain-paper copier share had dropped to 40%, from 85% in 1974. Yet Xerox’s revenues grew from 1.6 billion in 1970 to $8 billion in 1980, partially because Xerox began to sell the machines it had been renting, depleting its lease base.

Beginning in the mid-1970s, Japanese products emerged as an even more dangerous threat. Xerox machines were big and complex and averaged three breakdowns a month. Ricoh introduced a less expensive, smaller machine that broke down less often. The Japanese strategy was to capture the low end of the market and move up. By 1980 another Japanese competitor, Canon, was challenging Xerox’s market share in higher-end machines.

In the late 1970s Xerox began reorganizing, making market share its goal, and learning some lessons about quality control and low-end copiers from its Japanese subsidiary. The company also cut manufacturing costs drastically. Xerox regained copier market share, but intense price competition kept copier revenue around $8 billion for most of the 1980s.

In 1981 Xerox finally began releasing new products, beginning with the Memorywriter typewriter. This typewriter soon outsold IBM’s and captured over 20% of the electric typewriter market. By January 1983 Xerox had unveiled a Memorywriter that could store large amounts of data internally. In 1982 the 10-series copiers, the first truly new line since the 1960s, was introduced. These machines used microprocessors to regulate internal functions and were able to perform a variety of complicated tasks on different types of paper. They were also smaller and far less likely to break down than earlier Xerox copiers. The 10-series machines used technology developed at PARC, which was becoming more integrated with the company.

Xerox began gaining market share for the first time in years, and morale improved. It also released computer workstations and software and built a $1 billion business in laser printers. The workstations proved to be an expensive flop, and by 1989 the company planned to close its workstation-hardware business. Xerox also moved to protect its 50% share of the high-end market in the United States with machines that make 70 or more copies a minute. The major high-end competition was Kodak, but the Japanese—led by Ricoh—were again launching a drive for this market.

During the 1970s Xerox had also diversified into financial services. In 1983 it bought Crum and Forster, a property-casualty insurer, and in 1984 it formed Xerox Financial Services (XFS), which bought two investment-banking firms in the next few years. By 1988 XFS supplied nearly 50% of Xerox’s income—$315 million of the $632 million total. XFS performed well, able to raise funds at a low cost because it was backed by the Xerox “A” credit rating.

Xerox spent more than $3 billion on research and development in the 1980s, looking for new technologies, such as those for digital and color copying, to promote growth. Xerox was a leader in developing technologies, but often had trouble creating and marketing products based on them, particularly computers.

In 1988 Xerox underwent a $275 million restructuring, cutting 2,000 jobs, shrinking its electronic typewriter output, dropping its medical systems business, and creating a new marketing organization, Integrated Systems Operations, to get new technologies into the marketplace more effectively. Xerox’s comeback was so impressive that in 1989 its Business Products & Systems unit won Congress’s Malcolm Baldridge National Quality Award for regaining its lead in copier quality. Xerox demonstrated its ability to change in the late 1970s when it responded to the first wave of Japanese competition. Many analysts believe that Paul A. Allaire, a career Xerox man named CEO in 1990, must repeat that performance if Xerox is to survive as an independent corporation.

Principal Subsidiaries

Rank Xerox (U.K., 51%); Xerox Financial Services, Inc.; Crum and Forster, Inc.; Xerox Credit Corporation; Van Kampen Merritt Inc.; Furman Selz; Xerox Life; Fuji Xerox (Japan, 51%).

Further Reading

Dessauer, John H., My Years with Xerox, Garden City, New York, Doubleday & Company, Inc., 1971; The Story of Xerography, Stamford, Connecticut, Xerox Corporation, 1978; Jacobson, Gary, and John Hillkirk, Xerox: American Samurai, New York, Macmillan Publishing Company, 1986; Alexander, Robert C., and Douglas K. Smith, Fumbling the Future, New York, William Morrow and Company, Inc., 1988; 1988 Fact Book, Stamford, Connecticut, Xerox Corporation, 1988.

—Scott M. Lewis

Xerox Corporation

800 Long Ridge Road
Stamford, Connecticut 06904
U.S.A.
(203) 968-3000
Fax: (203) 968-4312

Public Company
Incorporated: 1961
Employees: 109,400
Sales: $17.8 billion
Stock Exchanges: New York Midwest Boston Cincinnati Pacific Philadelphia London Paris Basel Berne Geneva Lausanne Zürich Amsterdam Düsseldorf Frankfurt

Xerox has become virtually synonymous with photocopying. Xerox was a small company in 1960 when its first practical copier was introduced, but the company zoomed into the Fortune 500 during the next few years. About 1,800 people worked there in 1959, and 55,000 in 1969.

The company began in 1906 as a photography-paper business named the Haloid Company in Rochester, New York. Its neighbor, Kodak, ignored the company and Haloid managed to build a business on the fringe of the photography market. In 1912 control of the company was sold for $50,000 to Rochester businessman Gilbert E. Mosher, who became president but left the day-to-day running of the company to its founders. Mosher kept Haloid profitable and opened sales offices in Chicago, Boston, and New York City. To broaden the company’s market share, Haloid’s board decided to develop a better paper. It took several years, but when Haloid Record finally came out in 1933 it was so successful that it saved the company from the worst of the Great Depression. By 1934 Haloid’s sales were approaching $1 million. In 1935 Joseph R. Wilson, the son of one of the founders, decided that Haloid should buy the Rectigraph Company, a photocopying machine manufacturer that used Haloid’s paper. Haloid went public to raise the money, and selling Rectigraphs became an important part of Haloid’s business.

In 1936 Haloid’s 120 employees struck for benefits and higher wages. Mosher proved intransigent, and Wilson stepped in and offered concessions. Tension and resentment between labor and management persisted until World War II. During the war the armed forces needed high-quality photographic paper for reconnaissance, and business boomed. When the war ended Haloid faced stiff competition from new paper manufacturers.

Haloid needed to come up with new products, particularly after a showdown between Mosher, who wanted to sell Haloid to another company, and Wilson, who did not. Wilson won, and in 1947 Haloid entered into an agreement with Battelle Memorial Institute, a nonprofit research organization in Columbus, Ohio to produce a machine based on a new process called xerography.

Xerography, a word derived from the Greek words for “dry” and “writing,” was the invention of Chester Carlson. Carlson was born in Seattle, Washington in 1906 and was a patent lawyer employed by a New York electronics firm. Frustrated by the difficulty and expense of copying documents, in 1938 Carlson invented a method of transferring images from one piece of paper to another using static electricity. In 1944 Battelle signed a royalty-sharing agreement with Carlson and began to develop commercial applications for xerography.

In 1949, two years after Haloid signed its agreement with Battelle, Haloid introduced the XeroX Copier, spelled with a capital “X”. The machine, which required much of the processing to be done manually, was difficult and messy to use and made errors frequently. Many in the financial community thought that Haloid’s large investment in xerography was a big mistake, but Battelle engineers discovered that the XeroX made excellent masters for offset printing— an unforeseen quality that sold many machines. Haloid invested earnings from these sales in research on a second-generation xerographic copier.

In 1950 Battelle made Haloid the sole licensing agency for all patents based on xerography, but Battelle owned the basic patents until 1955. Haloid licensed the patents liberally to spread the usage of xerography to corporations like RCA, IBM, and General Electric. In 1950 Haloid sold its first commercial contract for a xerographic copier to the State of Michigan. Meanwhile, Haloid’s other products were again highly profitable, with paper sales increasing and several successful new office photocopying machines selling well.

In 1953 Carlson received the Edward Longstreth Medal of Merit for the invention of xerography from the Franklin Institute. In 1955 Haloid revamped its 18 regional offices into showrooms for its Xerox machines instead of photo-paper warehouses, hired 200 sales and service people, began building the first Xerox factory in Webster, New York, and introduced three new types of photography paper. Haloid also introduced the Copyflo, Haloid’s semi-automatic copying machine. In 1956 Haloid president Joe Wilson, Joseph R. Wilson’s son, formed an overseas affiliate called Rank Xerox with the Rank Organisation, a British film company seeking to diversify. This arrangement paved the way for Xerox factories in Great Britain and a sales and distribution system that brought Xerox machines to the European market. In 1958 Haloid changed its name to Haloid Xerox, reflecting its belief that the company’s future lay with xerography, although photography products were still more profitable. That balance quickly changed with the success of the Xerox 914 copier. Introduced in 1960, it was the first automatic Xerox copier, and the first marketable plain-paper copier. The company could not afford a blanket advertising campaign, and placed ads in magazines and on television programs where it hoped business people would see them. The company also offered the machines for monthly lease to make xerography affordable for smaller businesses.

Demand for the 650-pound 914 exceeded Haloid-Xerox’s most optimistic projections, despite its large size. Fortune later called it “the most successful product ever marketed in America.” Sales and rental of xerographic products doubled in 1961, and kept growing. In 1961 the company was listed on the New York Stock Exchange and changed its name to the Xerox Corporation; photography operations became the Haloid photo division. In 1962 Xerox formed Fuji Xerox in Japan with Fuji Photo Film Company. Also during the 1960s Xerox opened subsidiaries in Australia, Mexico, and continental Europe. The company had sunk $12.5 million into developing the 914, more than Haloid’s total earnings from 1950 to 1959, but the 914 led the company to more than $1 billion in sales by 1968. In 1963 Xerox introduced a desktop version of the 914; although this machine sold well, it was not very profitable, and Xerox has depended on its larger machines ever since.

With its suddenly large profits, Xerox began a string of acquisitions, purchasing University Microfilms in 1962 and Electro-Optical Systems in 1963. The market for copiers continued to expand at such a rate that they remained Xerox’s chief source of revenue. The 1960s were a tremendously successful time for Xerox, which became one of the 100 largest corporations in the United States and, in 1969, moved to Stamford, Connecticut.

In the late 1960s Xerox began to focus less on copiers and more on designing an electronic office that would not use paper. With this end in mind the corporation bought a computer company, Scientific Data Systems, in 1969, for nearly $1 billion in stock, only to have it fail and close down in 1975. Xerox also formed Xerox Computer Services in 1970, bought several small computer firms in the next few years, and opened the Xerox Palo Alto Research Center (PARC) in California.

Scientists at PARC invented what may have been the world’s first personal computer. So innovative was the work of the PARC scientists that many features they invented later appeared on Apple Macintosh computers. In December of 1989 Xerox sued Apple Computer for $150 million, alleging that Apple had stolen the technology that helped make its computers so successful. Apple co-founder Steven Jobs, who later hired some researchers from PARC, claimed that his company had refined Xerox’s work, and thus made it original.

PARC’s innovations were overlooked by Xerox; the computer division and the copier division competed for resources and failed to communicate. Products were released by the office products division in Dallas, Texas that PARC had never seen before. Disagreements broke out at Xerox headquarters at the suggestion of change, further stifling innovation.

In April of 1970 IBM introduced an office copying machine, giving Xerox its first real competition. IBM’s machine was not as fast or as sophisticated as the Xerox copiers, but it was well built and was backed by IBM’s reputation. Xerox responded with a suit charging IBM with patent infringement. The dispute was settled in 1978 when IBM paid Xerox $25 million. Meanwhile, Xerox itself became the defendant repeatedly for antitrust violations, including a suit by the Federal Trade Commission. Distracted from its market by legal battles, Xerox lost its lead in the industry when Kodak came out with a more sophisticated copier. IBM and Kodak followed a strategy similar to that of Xerox, leasing their machines and attracting many large accounts on which Xerox depended.

Xerox had become inefficient as its executives concentrated on growth during the 1960s. Xerox had spent hundreds of millions of dollars on product development but introduced few new products. Engineers and designers were divided into small groups that fought over details as they missed deadlines. While the company sought to perfect the copying machine it failed to challenge the new products on the market, and Xerox’s market share dropped.

By 1985 Xerox’s worldwide plain-paper copier share had dropped to 40%, from 85% in 1974. Yet Xerox’s revenues grew from $1.6 billion in 1970 to $8 billion in 1980, partially because Xerox began to sell the machines it had been renting, thus depleting its lease base.

Beginning in the mid-1970s, Japanese products emerged as an even more dangerous threat. Xerox machines were big and complex and averaged three breakdowns a month. Ricoh introduced a less expensive, smaller machine that broke down less often. The Japanese strategy was to capture the low end of the market and move up. By 1980 another Japanese competitor, Canon, was challenging Xerox’s market share in higher-end machines.

In the late 1970s Xerox began reorganizing, making market share its goal, and learning some lessons about quality control and low-end copiers from its Japanese subsidiary. The company also cut manufacturing costs drastically. Xerox regained copier market share but intense price competition kept copier revenues around $8 billion for most of the 1980s.

In 1981 Xerox finally began releasing new products, beginning with the Memorywriter typewriter. This typewriter soon outsold IBM’s and captured over 20% of the electric typewriter market. By January of 1983 Xerox had unveiled a Memorywriter that could store large amounts of data internally. In 1982 the 10-Series copiers, the first truly new line since the 1960s, was introduced. These machines used microprocessors to regulate internal functions and were able to perform a variety of complicated tasks on different types of paper. They were also smaller and far less likely to break down than earlier Xerox copiers. The 10-Series machines used technology developed at PARC, which was becoming more integrated with the company. Xerox began gaining market share for the first time in years, and morale improved.

Xerox also released computer workstations and software and built a $1 billion business in laser printers. The workstations proved to be an expensive flop, however, and by 1989 the company planned to close its workstation hardware business. Xerox also moved to protect its 50% share of the high-end market in the United States with machines that make 70 or more copies a minute. The major high-end competition was Kodak, but the Japanese—led by Ricoh— were again launching a drive for this market.

During the 1970s Xerox had also diversified into financial services. In 1983 it bought Crum and Forster, a property casualty insurer, and in 1984 it formed Xerox Financial Services (XFS), which bought two investment-banking firms in the next few years. By 1988 XFS supplied nearly 50% of Xerox’s income—$315 million of the $632 million total. XFS performed well, able to raise funds at a low cost because it was backed by the Xerox “A” credit rating.

Xerox spent more than $3 billion on research and development in the 1980s looking for new technologies, such as those for digital and color copying, to promote growth. Xerox was a leader in developing technologies, but often had trouble creating and marketing products based on them, particularly computers.

In 1988 Xerox underwent a $275 million restructuring, cutting 2,000 jobs, shrinking its electronic typewriter output, dropping its medical systems business, and creating a new marketing organization, Integrated Systems Operations, to get new technologies into the marketplace more effectively. Xerox’s comeback was so impressive that in 1989 its Business Products & Systems unit won Congress’ Malcolm Baldridge National Quality Award for regaining its lead in copier quality. Xerox had demonstrated its ability to change in the late 1970s when it responded to the first wave of Japanese competition.

In 1990 when David T. Kearns, CEO since 1932, retired to become U.S. Deputy Secretary of Education, and Paul A. Allaire, a career Xerox man, was named to replace him, industry analysts speculated that Allaire would have to repeat the feats of the 1970s if Xerox was to survive as an independent corporation. A restructuring of company management occurred almost immediately. The office of the president was transformed into a document processing corporate office led by Allaire and including executive vice presidents A. Barry Rand and Vittorio Cassoni, and senior vice presidents Mark B. Myers and Allan E. Dugan. Two years later, Xerox announced plans to restructure the company as well. Three customer service operations units were created in Connecticut, New York, and England. In addition, nine document processing business units were established, each of which is headed by a president responsible for the profitability of the unit.

During the seven-month period from September of 1990 to March of 1991, Xerox introduced five new types of printers: the Xerox 4350, Xerox 4197, Xerox 4135, Xerox 4235, and Xerox 4213. These printers were designed to handle a wide variety of office needs from two-color printing to desktop laser printing. In October of 1990 the Docu-Tech Production Publisher signaled Xerox’s intent to take advantage of what the company foresees as an industry move from offset printing to electronic printing and copying.

The introduction of the Xerox 5775 Digital Color Copier was met with great fanfare and was expected to rejuvenate sales. Xerox has also continued to update and improve its facsimile machines by developing a personal-sized model that can be used as a copier as well as a telephone, and by developing thermal, recyclable fax paper. In May 1992, Xerox introduced Paperworks, software that makes it possible to send documents to a fax machine directly from a PC.

Despite these new products, financial and legal woes continued to plague Xerox in the early 1990s as American economic conditions worsened. After earnings of $235 million in the fourth quarter of 1990, Xerox reported only $91 million in profits for the same period the following year. Earlier in 1990, just four months after the creation of the X-Soft division, which was to develop and market the company’s software products, Xerox announced that it would lay off 10% of X-Soft’s employees. In February of 1992, the company offered severance pay to 6,000 of its American employees in an attempt to reduce the work force by 2,500 by July.

By the end of 1991, Xerox was announcing the sale of three of its insurance wholesalers. Crum and Forster sold Floyd West & Co. and Floyd West of Louisiana to Burns & Wilcox Ltd. London Brokers Ltd. was sold to Crump E & S. Moreover, several lawsuits resulted in losses for Xerox. In February of 1992 Xerox was ordered to pay Gradco Systems, Inc. $2.5 million to settle a patent dispute; and a suit settled in favor of Monsanto a month later was expected to cost Xerox $142 million to clean up a hazardous waste dump site.

Principal Subsidiaries

Rank Xerox (U.K., 51%); Xerox Financial Services, Inc.; Crum and Forster, Inc.; Xerox Credit Corporation; Van Kampen Merritt Inc.; Furman Selz; Xerox Life; Fuji Xerox (Japan, 51%).

Further Reading

Dessauer, John H., My Years with Xerox, Garden City, New York, Doubleday & Company, Inc., 1971; The Story of Xerography, Stamford, Connecticut, Xerox Corporation, 1978; Jacobson, Gary, and John Hillkirk, Xerox: American Samurai, New York, Macmillan Publishing Company, 1986; Alexander, Robert C., and Douglas K. Smith, Fumbling the Future, New York, William Morrow and Company, Inc., 1988; 1988 Fact Book, Stamford, Connecticut, Xerox Corporation, 1988; 1990 Fact Book for the News Media, Xerox Corporation, 1990; Norman, James R., “Xerox on the Move,” June 10, 1991; 1991 Annual Report, Xerox Corporation, 1992; Kearns, David, et al, Xerox: Prophets in the Dark, Harper Business, 1992; 1992 Fact Book for the News Media, Stamford, Connecticut, Xerox Corporation, 1992.

—Scott M. Lewis

update by Mary McNulty

Xerox Corporation

800 Long Ridge Road
Stamford, Connecticut 06904
U.S.A.
(203) 968-3000
(800) 828-6396
Fax: (203) 968-4312
Web site: http://www.xerox.com

Public Company
Incorporated: 1906 as The Haloid Company
Employees: 91,400
Sales: $18.17 billion (1997)
Stock Exchanges: New York Midwest Boston Cincinnati Pacific Philadelphia London Basel Berne Geneva Lausanne Zürich
Ticker Symbol: XRX
SICs: 3577 Computer Peripheral Equipment, Not Elsewhere Classified; 3579 Office Machines, Not Elsewhere Classified; 5044 Office Equipment; 7374 Computer Processing & Processing & Data Preparation Services; 7375 Information Retrieval Services; 7379 Computer Related Services, Not Elsewhere Classified

Xerox Corporation, virtually synonymous with photocopying, now touts itself as The Document Company. In addition to its flagship copiers, Xerox also makes production publishers, electronic printers, fax machines, scanners, networks, software, and supplies. The company is also a market leader in the area of document outsourcing services. Xerox markets its products in more than 130 countries. Its Xerox Limited subsidiary (formerly Rank Xerox, a joint venture with the Rank Organisation Pic of the United Kingdom) distributes Xerox products in Europe, Africa, the Middle East, and parts of Asia (including Hong Kong, India, and China). Xerox Co., Limited—a joint venture with Photo Film Company Limited —develops, manufactures, and distributes document processing products in Japan and the Pacific Rim (including Australia, New Zealand, Singapore, and Malaysia).

Origins As The Haloid Company in 1906

Xerox can trace its roots to 1906, when a photography-paper business named the Haloid Company was established in Rochester, New York. Its neighbor, Kodak, ignored the company, and Haloid managed to build a business on the fringe of the photography market. In 1912 control of the company was sold for $50,000 to Rochester businessman Gilbert E. Mosher, who became president but left the day-to-day running of the company to its founders.

Mosher kept Haloid profitable and opened sales offices in Chicago, Boston, and New York City. To broaden the company’s market share, Haloid’s board decided to develop a better paper. It took several years, but when Haloid Record finally came out in 1933 it was so successful that it saved the company from the worst of the Great Depression. By 1934 Haloid’s sales were approaching $1 million. In 1935 Joseph R. Wilson, the son of one of the founders, decided that Haloid should buy the Rectigraph Company, a photocopying machine manufacturer that used Haloid’s paper. Haloid went public to raise the money, and selling Rectigraphs became an important part of Haloid’s business.

In 1936 Haloid’s 120 employees went on strike for benefits and higher wages. When Mosher proved intransigent, Wilson stepped in and offered concessions. Tension and resentment between labor and management persisted until World War II. During the war the Armed Forces needed high-quality photographic paper for reconnaissance, and business boomed. When the war ended Haloid faced stiff competition from new paper manufacturers.

Amidst this, Haloid needed to come up with new products, particularly following a showdown between Mosher, who wanted to sell Haloid off, and Wilson, who did not. Wilson won, and in 1947 Haloid entered into an agreement with Battelle Memorial Institute, a nonprofit research organization in Columbus, Ohio, to produce a machine based on a new process called xerography.

Xerography, a word derived from the Greek words for “dry” and “writing,” was the invention of Chester Carlson. Carlson was born in Seattle, Washington, in 1906 and became a patent lawyer employed by a New York electronics firm. Frustrated by the difficulty and expense of copying documents, Carlson in 1938 invented a method of transferring images from one piece of paper to another using static electricity. In 1944 Battelle signed a royalty-sharing agreement with Carlson and began to develop commercial applications for xerography.

The XeroX Copier Debuts in 1949

In 1949, two years after Haloid signed its agreement with Battelle, Haloid introduced the XeroX Copier, initially spelled with a capital X at the end. The machine, which required much of the processing to be done manually, was difficult and messy to use and made errors frequently. Many in the financial community thought that Haloid’s large investment in xerography was a big mistake, but Battelle engineers discovered that the XeroX made excellent masters for offset printing—an unforeseen quality that sold many machines. Haloid invested earnings from these sales in research on a second-generation xerographic copier.

In 1950 Battelle made Haloid the sole licensing agency for all patents based on xerography, but Battelle owned the basic patents until 1955. Haloid licensed the patents liberally to spread the usage of xerography to such corporations as RCA, IBM, and General Electric. In 1950 Haloid sold its first commercial contract for a xerographic copier to the State of Michigan. Meanwhile, Haloid’s other products were again highly profitable, with paper sales increasing and several successful new office photocopying machines selling well.

In 1953 Carlson received the Edward Longstreth Medal of Merit for the invention of xerography from the Franklin Institute. In 1955 Haloid revamped its 18 regional offices into showrooms for its Xerox machines instead of photo-paper warehouses, hired 200 sales and service people, began building the first Xerox factory in Webster, New York, and introduced three new types of photography paper. Haloid also introduced the Copyflo, Haloid’s semiautomatic copying machine. In 1956 Haloid president Joe Wilson, Joseph R. Wilson’s son, formed an overseas affiliate called Rank Xerox with the Rank Organisation, a British film company seeking to diversify. This arrangement paved the way for Xerox factories in Great Britain and a sales and distribution system that brought Xerox machines to the European market.

1960: The Xerox 914 Copier Becomes an Instant Hit

In 1958 Haloid changed its name to Haloid Xerox, reflecting its belief that the company’s future lay with xerography, although photography products were still more profitable. That balance quickly changed with the success of the Xerox 914 copier. Introduced in 1960, it was the first automatic Xerox copier, and the first marketable plain-paper copier. The company could not afford a blanket advertising campaign, so it placed ads in magazines and on television programs where it hoped business owners would see them. The company also offered the machines for monthly lease to make xerography affordable for smaller businesses.

Demand for the 650-pound 914 model exceeded Haloid-Xerox’s most optimistic projections, despite its large size. Fortune later called the copier “the most successful product ever marketed in America.” Sales and rental of xerographic products doubled in 1961 and kept growing. In 1961 the company was listed on the New York Stock Exchange and changed its name to the Xerox Corporation; photography operations were placed under the newly created Haloid photo division. In 1962 Xerox formed Xerox in Japan with Photo Film Company. Also during the 1960s Xerox opened subsidiaries in Australia, Mexico, and continental Europe. The company had sunk $12.5 million into developing the 914 copier, more than Haloid’s total earnings from 1950 to 1959, and the 914 had led the company to more than $1 billion in sales by 1968. In 1963 Xerox introduced a desktop version of the 914; although this machine sold well, it was not very profitable, and Xerox depended on its larger machines thereafter.

With its suddenly large profits, Xerox began a string of acquisitions, purchasing University Microfilms in 1962 and Electro-Optical Systems in 1963. The market for copiers continued to expand at such a rate that they remained Xerox’s chief source of revenue. The 1960s were a tremendously successful time for Xerox, which became one of the 100 largest corporations in the United States and, in 1969, moved its headquarters to Stamford, Connecticut.

In the late 1960s Xerox began to focus its efforts on the concept of an electronic office that would not use paper. With this end in mind the corporation bought a computer company, Scientific Data Systems, in 1969, for nearly $1 billion in stock, only to have it fail and close down in 1975. Xerox also formed Xerox Computer Services in 1970, bought several small computer firms in the next few years, and opened the Xerox Palo Alto Research Center (PARC) in California.

Scientists at PARC invented what may have been the world’s first personal computer. So innovative was the work of the PARC scientists that many features they invented later appeared on Apple Macintosh computers. In fact, in December 1989 Xerox would sue Apple Computer for $150 million, alleging that Apple had stolen the technology that helped make its computers so successful. Apple cofounder Steven Jobs, who later hired some researchers from PARC, claimed that his company had refined Xerox’s work, and thus made it original.

Company Perspectives:

Our strategic intent is to be the leader in the global document market, providing document solutions that enhance business productivity. Since our inception, we have operated under the guidance of six core values: we succeed through satisfied customers; we aspire to deliver quality and excellence in all that we do; we require premium returns on assets; we use technology to deliver market leadership; we value our employees; we behave responsibly as a corporate citizen.

PARC’s innovations were largely overlooked by Xerox; the computer division and the copier division competed for resources and failed to communicate. Products were released by the office products division in Dallas, Texas, that PARC had never seen before. Disagreements broke out at Xerox headquarters at the suggestion of change, which further stifled innovation.

Struggling Through the 1970s and 1980s

In April 1970 IBM introduced an office copying machine, giving Xerox its first real competition. IBM’s machine was not as fast or as sophisticated as the Xerox copiers, but it was well built and was backed by IBM’s reputation. Xerox responded with a suit charging IBM with patent infringement. The dispute was settled in 1978 when IBM paid Xerox $25 million. Meanwhile, Xerox itself became a defendant in several antitrust violation investigations, including a lawsuit by the Federal Trade Commission. Distracted from its market by legal battles, Xerox lost its lead in the industry when Kodak came out with a more sophisticated copier. IBM and Kodak followed a strategy similar to that of Xerox, leasing their machines and attracting many large accounts on which Xerox depended.

According to most critics, Xerox had become inefficient during this time, as its executives had concentrated too heavily on growth during the 1960s. Xerox had spent hundreds of millions of dollars on product development but introduced few new products. Engineers and designers were divided into small groups that fought over details as they missed deadlines. While the company sought to perfect the copying machine, it failed to challenge the new products on the market, and Xerox’s market share dropped.

By 1985 Xerox’s worldwide plain-paper copier share had dropped to 40 percent, from 85 percent in 1974. Yet Xerox’s revenues grew from $1.6 billion in 1970 to $8 billion in 1980, partially because Xerox began to sell the machines it had been renting, thus depleting its lease base.

Beginning in the mid-1970s, Japanese products emerged as an even more dangerous threat. Xerox machines were big and complex and averaged three breakdowns per month. The Japanese company Ricoh, however, introduced a less expensive, smaller machine that broke down less often. The Japanese strategy was to capture the low end of the market and move up. By 1980 another Japanese competitor, Canon, was challenging Xerox’s market share in higher-end machines.

In the late 1970s Xerox began reorganizing, making market share its goal and learning some lessons about quality control and low-end copiers from its Japanese subsidiary. The company also cut manufacturing costs drastically. Xerox regained copier market share but intense price competition kept copier revenues around $8 billion for most of the 1980s.

In 1981 Xerox finally began releasing new products, beginning with the Memory writer typewriter. This typewriter soon outsold IBM’s and captured over 20 percent of the electric typewriter market. By January 1983 Xerox had unveiled a Memory writer that could store large amounts of data internally. In 1982 the 10-Series copiers, the first truly new line since the 1960s, was introduced. These machines used microprocessors to regulate internal functions and were able to perform a variety of complicated tasks on different types of paper. They were also smaller and far less likely to break down than earlier Xerox copiers. The 10-Series machines used technology developed at PARC, which was becoming more integrated with the company. Xerox began gaining market share for the first time in years, and morale improved.

Xerox also released computer workstations and software and built a $1 billion business in laser printers. The workstations proved an expensive flop, however, and by 1989 the company planned to close its workstation hardware business. Xerox also moved to protect its 50 percent share of the high-end market in the United States with machines that made 70 or more copies per minute. The major high-end competition was Kodak, but the Japanese—led by Ricoh—were again launching a drive for this market.

During the 1970s Xerox had also diversified into financial services. In 1983 it bought Crum and Forster, a property casualty insurer, and in 1984 it formed Xerox Financial Services (XFS), which bought two investment-banking firms in the next few years. By 1988 XFS supplied nearly 50 percent of Xerox’s income—$315 million of the $632 million total. XFS performed well, able to raise funds at a low cost because it was backed by the Xerox “A” credit rating.

Xerox spent more than $3 billion on research and development in the 1980s looking for new technologies, such as those for digital and color copying, to promote growth. Xerox was a leader in developing technologies, but often had trouble creating and marketing products based on them, particularly computers.

A Late 1980s Comeback

In 1988 Xerox underwent a $275 million restructuring, cutting 2,000 jobs, shrinking its electronic typewriter output, dropping its medical systems business, and creating a new marketing organization, Integrated Systems Operations, to get new technologies into the marketplace more effectively. Xerox’s comeback was so impressive that in 1989 its Business Products & Systems unit won Congress’s Malcolm Baldridge National Quality Award for regaining its lead in copier quality. Xerox had demonstrated its ability to change in the late 1970s when it responded to the first wave of Japanese competition.

In 1990 when David T. Kearns, CEO since 1932, retired to become U.S. Deputy Secretary of Education, and Paul A. Allaire, a career Xerox man, was named to replace him, industry analysts speculated that Allaire would have to repeat the feats of the 1970s if Xerox was to survive as an independent corporation. A restructuring of company management occurred almost immediately. The office of the president was transformed into a document processing corporate office led by Allaire and including executive vice-presidents A. Barry Rand and Vittorio Cassoni, and senior vice-presidents Mark B. Myers and Allan E. Dugan. Two years later, Xerox announced plans to restructure the company as well. Three customer service operations units were created in Connecticut, New York, and England. In addition, nine document processing business units were established, each of which was headed by a president responsible for the profitability of the unit.

During the seven-month period from September 1990 to March 1991, Xerox introduced five new types of computer printers: the Xerox 4350, Xerox 4197, Xerox 4135, Xerox 4235, and Xerox 4213. These printers were designed to handle a wide variety of office needs from two-color printing to desktop laser printing. In October 1990 the Docu-Tech Production Publisher signaled Xerox’s intent to take advantage of what the company foresaw as an industry move from offset printing to electronic printing and copying.

The introduction of the Xerox 5775 Digital Color Copier was met with great fanfare and was expected to rejuvenate sales. Xerox also continued to update and improve its facsimile machines by developing a personal-sized model that could be used as a copier as well as a telephone, and by developing thermal, recyclable fax paper. In May 1992 Xerox introduced Paperworks, software making it possible to send documents to a fax machine directly from a PC.

Despite these new products, financial and legal woes continued to plague Xerox in the early 1990s as American economic conditions worsened. After earnings of $235 million in the fourth quarter of 1990, Xerox reported only $91 million in profits for the same period the following year. Earlier in 1990, just four months after the creation of the X-Soft division, which was to develop and market the company’s software products, Xerox announced that it would lay off ten percent of X-Soft’s employees. In February 1992 the company offered severance pay to 6,000 of its American employees in an attempt to reduce the workforce by 2,500 by July.

By the end of 1991, Xerox was announcing the sale of three of its insurance wholesalers. Crum and Forster sold Floyd West & Co. and Floyd West of Louisiana to Burns & Wilcox Ltd. London Brokers Ltd. was sold to Crump E & S. Moreover, several lawsuits resulted in losses for Xerox during this time. In February 1992 Xerox was ordered to pay Gradco Systems, Inc. $2.5 million to settle a patent dispute; and a suit settled in favor of Monsanto a month later was expected to cost Xerox $142 million to clean up a hazardous waste dump site.

The Document Company Emerges in the Mid-1990s

With its core office products businesses on the upswing, Xerox announced in January 1993 that it intended to exit from insurance and its other financial services businesses. Later that year Crum and Forster was renamed Talegen Holdings Inc. and was restructured into seven stand-alone operating groups in order to facilitate their piecemeal sale. This exit took several years, however, and was delayed when a 1996 deal to sell several units to Kohlberg Kravis Roberts & Company for $2.36 billion collapsed. During 1995 two of the groups were sold for a total of $524 million in cash. In 1997 three more were sold for a total of $890 million in cash and the assumption of $154 million in debt. Then in January 1998 Xerox completed the sale of Westchester Specialty Group, Inc. to Bermuda-based ACE Limited for $338 million, less $70 million in transaction-related costs. Finally, Xerox in August 1998 sold its last remaining insurance unit, Crum & Forster Holdings, Inc., to Fairfax Financial Holdings Limited of Toronto for $680 million.

As it was exiting from financial services, Xerox was also beginning to shed its image as a copier company. In 1994 Xerox began calling itself The Document Company to emphasize the wide range of document processing products it produced. A new logo included a red “X” that was partially digitized, representing the company’s shift from analog technologies to digital ones. A number of new digital products were developed over the next several years, including digital copiers that also served as printers, fax machines, and scanners (so-called multifunction devices). From 1995 to 1997 revenue from analog copiers was virtually stagnant, even falling slightly, whereas revenue from digital products enjoyed double-digit growth, increasing to $6.7 billion by 1997.

Xerox also shifted focus from black-and-white to highly sought-after color machines, with revenues from color copying and printing increasing 46 percent to $1.5 billion in 1997. The most notable introduction here was the DocuColor 40, launched in 1996, which captured more than 50 percent of the high-speed color copier market based on its ability to print 40 full-color pages per minute. Revitalized new product development at Xerox resulted in the introduction of 80 new products in 1997 alone, the most in company history and twice the number of the previous year. More Xerox products were being developed for the small office/home office market, with prices low enough that the company increasingly marketed its products via such retailers as CompUSA, Office Depot, OfficeMax, and Staples.

However, the new Xerox was about more than just office products. The company introduced DocuShare document-management software in 1997, providing a system for users to post, manage, and share information on company intranets. Xerox also gained the leading market share position in the burgeoning document outsourcing services sector through the 1997-created Document Services Group. This group offered such services as the creation of digital libraries, the design of electronic-commerce systems for Internet-based transactions, as well as professional document consulting services. In May 1998 Xerox bolstered its Document Services Group through the $413 million acquisition of XLConnect Solutions Inc. (renamed Xerox Connect) and its parent Intelligent Electronics, Inc. XLConnect specialized in the design, building, and support of networks for company wide document solutions.

The mid-1990s also saw Xerox launch a restructuring in 1994, leading to 10,000 job cuts over a three-year period. In February 1995 the company paid The Rank Organisation about $972 million to increase its stake in Rank Xerox to 80 percent. Then in June 1997 Xerox spent an additional $1.5 billion to buy Rank out entirely. With full control of the unit, Xerox renamed it Xerox Limited. That same month G. Richard Thoman, who had been senior vice-president and chief financial officer at IBM, was named president and chief operating officer of Xerox, with Allaire remaining chairman and CEO.

In April 1998 Xerox announced yet another major restructuring, as its shift to the digital world led it to spend more on overhead than its competitors. The company planned to eliminate 9,000 jobs over two years, taking a $1.11 billion after-tax charge in 1998’s second quarter in the process. The cuts came at a time when Xerox was enjoying record sales and earnings as well as a surging stock price, so the company was clearly proactive in maintaining the momentum it had gained through its impressive 1990s resurgence.

Principal Subsidiaries

Xerox Financial Services, Inc.; Xerox Credit Corporation; Xerox Realty Corporation; Xerox (UK) Limited; Fuji Xerox Co., Ltd. (Japan; 50%); Xerox Canada Inc. The company also lists some 275 additional subsidiaries in the United States, United Kingdom, Canada, Japan, Peru, Venezuela, Colombia, Netherlands Antilles, Panama, Brazil, Barbados, Chile, Mexico, Dominican Republic, Hong Kong, China, Egypt, Singapore, Australia, New Zealand, Taiwan, Belgium, Russia, Germany, Sweden, Switzerland, Denmark, Norway, Austria, Spain, Poland, Finland, Portugal, Italy, France, and elsewhere.

Further Reading

Alexander, Robert C., and Douglas K. Smith, Fumbling the Future: How Xerox Invented, Then Ignored, the First Personal Computer, New York: William Morrow, 1988, 274 p.

Dessauer, John H., My Years with Xerox, Garden City, N.Y.: Doubleday, 1971.

Deutsch, Claudia H., “Original Thinking for a Digital Xerox,” New York Times, April 15, 1997, pp. D1, D6.

Driscoll, Lisa, “The New, New Thinking at Xerox,” Business Week, June 22, 1992, pp. 120 +.

Hamilton, David P., “United It Stands: Xerox Is a Rarity in World Business: A Joint Venture That Works,” Wall Street Journal, September 26, 1996, p. R19.

Jacobson, Gary, and John Hillkirk, Xerox: American Samurai, New York: Macmillan Publishing, 1986, 338 p.

Kearns, David T., and David A. Nadler, Prophets in the Dark: How Xerox Reinvented Itself and Beat Back the Japanese, New York: Harper Business, 1992, 334 p.

Narisetti, Raju, “Pounded by Printers, Xerox Copiers Go Digital,” Wall Street Journal, May 12, 1998, pp. Bl, B6.

______, “Xerox Aims to Imprint High-Tech Image,” Wall Street Journal, October 6, 1998, p. B8.

______, “Xerox to Cut 9,000 Jobs Over Two Years,” Wall Street Journal, April 8, 1998, pp. A3, A6.

______, “Xerox to Sell Crum & Forster for $565 Million,” Wall Street Journal, March 12, 1998, p. B6.

______, “Xerox to Sell Resolution Group for $612 Million in Cash,

Securities,” Wall Street Journal, September 10, 1997, p. B4.

Sheridan, John H., “A CEO’s Perspective on Innovation,” Industry Week, December 19, 1994, pp. 11-12, 14.

Smart, Tim, and Peter Burrows, “Out to Make Xerox Print More Money,” Business Week, August 11, 1997, pp. 81 +.

Smart, Tim, “Can Xerox Duplicate Its Glory Days?,” Business Week, October 4, 1993, pp. 56, 58.

______, “So Much for Diversification,” Business Week, February 1, 1993, p. 31.

The Story of Xerography, Stamford, Conn.: Xerox Corporation, n.d.

Weber, Thomas E., “Xerox to Pay $1.5 Billion to Buy Rank’s Stake in Copier Venture,” Wall Street Journal, June 9, 1997, p. B4.

Ziegler, Bart, “Success at IBM Gives Thoman Edge at Xerox,” Wall Street Journal, June 13, 1997, pp. Bl, B8.

Ziegler, Bart, and Leslie Seism, “Xerox Shares Fall 5.6% After Collapse of the Sale of Insurance Units to KKR,” Wall Street Journal, September 13, 1996, pp. A2, A4.

—Scott M. Lewis and Mary McNulty
—updated by David E. Salamie

Xerox Corporation

founded: 1906

Contact Information:

headquarters: 800 long ridge rd.
stamford, ct 06904 phone: (203)968-3000 fax: (203)968-3430 url: http://www.xerox.com

OVERVIEW

Xerox Corporation, known best for its xerographic operations, has expanded its focus and developed new products. With more attention to the processing market (electronic management of documents), Xerox's Centre System has many functions: copying, faxing, printing, and scanning materials. New products such as color copiers and networking printing systems have allowed for steady growth.

Forming Dpix, a company that develops flat-panel displays using a new technology introduced by its Palo Alto Research Center, Xerox has also been able to expand its capabilities. The company's entry into document management began with its tepid entry into the financial field in the 1980s. Reorganizing its business foundations, Xerox sought to reduce its work force, sell noncore subsidiaries, and get out of debt from its restructuring efforts from 1994 to 1997.

COMPANY FINANCES

In 1997, Xerox reported $18.2 billion in total revenues. This was an increase from revenues of $17.4 billion in 1996 and $16.6 billion in 1995. Geographically, 49 percent of the company's 1997 revenue was generated in the United States, 30 percent in Europe, and 21 percent in the rest of the world, principally Brazil, the rest of Latin America, Canada, and China. The majority of 1997 revenues came from the company's sales of light-lens copiers ($9.6 billion). The remainder came from digital products ($6.7 billion) and from paper and other products ($1.9 billion).

Net income also rose in 1997, to $1.5 billion. In 1996, the company reported a net income of $1.2 billion, and in 1995, it showed a net loss of $472 million. This represents a 20-percent increase in 1997 and a 12-percent increase in 1996. Basic earnings per common share rose to $4.31 in 1997. In 1996, earnings were $3.55 per share, and there was a $1.59 loss per share in 1995. Revenue growth was driven, Xerox said, by 15-percent growth in equipment sales and 35-percent growth in document outsourcing.

Xerox's strong financial condition continued in the first quarter of 1998. In the quarter ending March 31, 1998, Xerox reported revenue of $4.3 billion, compared with $4.0 billion in the same period in 1997. Compared to 1997, however, net income dropped. Xerox reported income of $111 million, compared with $270 million in first-quarter 1997. Basic earnings per share also dropped, from $.79 to $.30 per share. Some of the loss was accounted for by reporting changes by Fuji Xerox, a subsidiary. A large portion of the changed financials occurred due to a company restructuring announced on April 7, 1998, which required employee buyouts, early retirements, and changes in capital.

Xerox has been increasing its research and development (R&D) spending. In 1997, R&D expenditures were almost $1.1 billion, compared with $1.0 billion in 1996 and $949 million in 1995. Xerox expected to increase its investment in technological development in 1998 in order to maintain its leadership position in the rapidly changing document processing market.

ANALYSTS' OPINIONS

Many analysts have seen Xerox Corporation's recent performance as reflective of a company on the rise. First-quarter earnings in 1998 were up 12 percent from the previous year. Company revenues increased as well. Combined with new products across the price spectrum and the restructuring that had begun, many analysts remained confident of Xerox's prospects. For the first time, Xerox entered the low end of the laser-printer market, long the almost exclusive domain of Hewlett-Packard. By making inroads into office supply stores like Staples, Office Depot, and Office Max, Xerox's products were beginning to be bought by consumers who had never considered the brand within their financial reach. As one analyst said to Investor's Business Daily, "Two years ago, most people would have characterized Xerox as being on the defensive, H-P as being on the offensive. . . . That's very debatable today."

Xerox further solidified its market position when it attained the number one spot in personal copier sales in the United States in 1997, according to a Dataquest report. Xerox followed that announcement with its introduction of the XC865 copier, the industry's lowest priced personal copier equipped with a 20-page document feeder. According to Dataquest, Xerox had a 48-percent market share in sales of personal copiers (models that turn out up to 16 copies per minute) in 1997. That marked the first time that Xerox outsold all other personal copier sellers.

HISTORY

Selling photographic paper, the Haloid Company purchased Rectigraph in 1935, a photocopying company. This acquisition caused the company to seek licensing for electrophotography (renamed xerography at a later date). Haloid produced the Model A copier in 1949 and the Xerox Copyflo in 1955. Because xerographic products accounted for 40 percent of Haloid's sales, it changed its name to Haloid Xerox in 1958.

With the introduction of the Xerox 914, the first office copier made easy, the company was launched to the competitive edge after winning public recognition and acceptance over other copying technologies such as mimeograph, thermal paper (3M), and damp copy (Kodak). Haloid Xerox's earnings increased sharply from $37 million in 1960 to $268 million in 1965. In 1961, the company dropped Haloid from its name and became simply Xerox.

Looking to expand, the company made many purchases in the 1960s including three publishing companies and one computer business, which were all eventually sold or abandoned. In the 1970s Xerox went on to acquire other companies that manufactured printers, plotters, and disk drives. The company also purchased Western Union International in 1979, which it sold in 1982.

With so many purchases under its belt, Xerox licensed its xerographic technology to other manufacturers. Xerox bought more companies in the 1980s, including Kurzweil, Datacopy, and Ventura. These purchases expanded the company's business to include optical character recognition, scanning and faxing, and desktop publishing. Xerox also entered the financial services business with the purchases of Crum and Forster (insurance) in 1983 and Van Kampen Merritt (investment banking) in 1984. Xerox later sold its desktop publishing and investment banking companies. By 1998, it had also sold its insurance business and had left the financial services arena altogether.

When Paul Allaire became CEO in 1990, Xerox shifted its focus to document processing. Presented with possible alliances in the future, the company also agreed to provide print engines to computer companies Compaq and Apple in the early 1990s. Because Xerox's main competitor, Canon, had previously supplied Apple's print engines, this business deal was particularly significant.

The 1990s also were characterized by changes for Xerox's research and development operations. Known for its remarkable innovations like the laser printer, PC networking, and the graphical computer screen, Xerox sought ways to cut costs and speed up production in this department. One way Xerox decided to hasten a product's introduction to the market was to form alliances with Lotus, Microsoft, and Novell. By 1995, new products like color laser printers and various software products, including DocuWeb and InterDoc, were introduced. Using these products, a user could print documents from the Internet and the World Wide Web.

The company's decision to focus on document processing also led to the sale of many of its noncore businesses. On March 11, 1998, Xerox announced an agreement to sell Crum and Forster and to leave the insurance field. Other developments included a partnership with LG Electronics to make multimedia-related office equipment. The 1998 moves followed the 1997 sales of the company's Coregis Group (insurance) and Apprise (a computer services company).

STRATEGY

As of 1997, Xerox announced an assertive growth strategy to increase revenue and earnings in digital copying, production publishing, and document services. The company's goal was to see double-digit earnings growth in 1997 and in years to come. Other elements of this strategy have included Xerox's expansion plans for its small and networked offices, hoping to increase retail and indirect channel sales to $4 billion (up from $1 billion) by the year 2000.

FAST FACTS: About Xerox Corporation

Ownership: Xerox Corporation is a publicly owned company traded on the New York Stock Exchange.

Ticker symbol: XRX

Officers: Paul A. Allaire, Chmn. & CEO, 59, 1997 base salary $975,000; G. Richard Thoman, Pres. & COO, 53, 1997 base salary $388,885; Barry D. Romeril, Exec. VP & CFO, 54, 1997 base salary $452,688; A. Barry Rand, 53, Exec. VP, Customer Operations, 1997 base salary $469,333

Employees: 91,400

Principal Subsidiary Companies: Xerox Corporation's chief subsidiaries include: Xerox Canada Inc.; Xerox South Africa (Pty) Ltd.; Fuji Xerox Co., Ltd.; Palo Alto Research Center; Xerox PARC; and Xerox Office Document Products Group.

Chief Competitors: Xerox has grown from a company that made and marketed photographic paper to one that is involved with all aspects of electronic document processing. Its competitors include: Canon; Casio; Eastman Kodak; Hewlett-Packard; Hitachi; Lexmark International; Matsushita; 3M; Minolta; Mitsubishi; NEC; Pitney-Bowes; Polaroid; Ricoh; Sharp; Siemens; and Wang.

Other expansion plans have included increased attention to new product development, adding printing and graphic arts features to its publishing business, and outsourcing its document services to include network services, consulting, software, and Internet services.

Xerox continued its strategy of acquiring other companies. In June 1997, Xerox acquired the remaining 20 percent of Xerox Limited from its subsidiary, the Rank Group, for approximately $1.5 billion. As a result, Xerox owned 100 percent of Xerox Limited, a company through which Xerox distributed its products in Europe, Africa, the Middle East, and parts of Asia, including Hong Kong, India, and China

In March 1998, Xerox announced an agreement to acquire XLConnect Solutions, Inc., an information technology services company, and its parent company, Intelligent Electronics, Inc., for $415 million in cash. XL-Connect has 1,500 employees, 27 locations throughout the United States, and 1997 revenue of $135 million. It provides network management, consulting, design, and integration services for medium and large companies.

Xerox announced a restructuring in April 1998. It included consolidation of 56 European customer support centers into one facility; streamlining manufacturing, logistics, distribution, and service operations; and overhauling administrative processes, including closing 1 of 4 geographically organized U.S. customer administrative centers. Severance costs were expected to result from the elimination of approximately 9,000 jobs worldwide through layoffs and voluntary reductions.

INFLUENCES

In the past, Xerox let its technology direct its strategic path. In the late 1990s, the company's new strategy reflected a shift, allowing the market to lead the way. Its early years were characterized by comfortable growth, which led the company to become complacent. As competition increased, the company was forced to look for a new direction.

Xerox Corporation implemented a new strategy called Leadership Through Quality, characterized by improving quality while reducing costs. Looking to Fuji Xerox in Japan as an example, Xerox focused on getting more opinions from customers, shifted its direction in product development, and reduced costs.

Xerox also took on the company signature The Document Company, Xerox, in 1994 as an indication of the company's new direction: document management. In other words, Xerox aimed to target anyone who used documents from small companies to Fortune 500 companies. Xerox's goal was to integrate its printers, scanners, fax machines, and copiers, as well as personal computer and workstation software. In addition, Xerox sold such supplies as paper, ink, and toner and provided document outsourcing for large customers.

The company's new focus demanded retraining, which frustrated company salesmen who were unfamiliar with the technological network systems involving the company's copiers. Many salesmen became angry, and some even quit. Xerox was left without salesman in many regions. CEO Paul Allaire admitted in The New York Times, "We tried to move too fast from selling boxes to selling document solutions."

CHRONOLOGY: Key Dates for Xerox Corporation

1938:

Chester Carlson makes the first xerographic image

1947:

Haloid Company obtains rights to some of Carlson's xerography patents

1948:

"Xerox" and "Xerography" are trademarked

1958:

Haloid changes its name to Haloid Xerox Inc.

1959:

The Xerox 914, the first automatic, plain paper office copier, is introduced; Haloid purchases all worldwide patents on Xerography

1961:

Haloid Xerox becomes the Xerox Corporation and goes public

1975:

Xerox settles an antitrust suit by agreeing to license its existing xerography patents

1985:

An agreement to produce a Xerox copier in China is signed

1988:

Launches a marketing agreement with Sears & Roebuck

1990:

Signs a licensing agreement with Adobe to produce PostScript language interpreter

1993:

Microsoft and Xerox team up to integrate personal computers and document processing components

1995:

Xerox wins a contract to be the sole supplier of U.S. Navy shipboard copiers

1998:

Xerox acquires XLConnect Solutions, Inc. and Intelligent Electronics, Inc.

Xerox witnessed a decline in its stock price in late 1995 as problems with its sales people became known. Even in 1996, the corporation's stock fell as investors became aware of the cost involved in the company's recruiting and training efforts. From that point, Xerox went on to resolve its manufacturing and sales difficulties to become a competitive driving force in the industry, according to many analysts.

The company's quick adventure into a field for which it was unprepared caused it to adopt its current strategy. Instead of allowing technology to be the key for the company's direction, Xerox began to let the market dictate its direction. This new strategy helped the company to record a 1997 increase in profits and win the approval of analysts.

Another influence on Xerox, as it is on every large company, has been litigation. A patent infringement lawsuit filed in 1996 by Accuscan resulted in a verdict against Xerox for $40 million. Xerox has appealed the April 1, 1998, verdict, which had to do with facsimile products. A second lawsuit was filed in May 1998 by Xerox against Hewlett-Packard (H-P) in regard to printers. Xerox wanted to have H-P ordered to stop selling ink-jet printers and cartridges with what Xerox claimed was Xerox-patented technology. Hewlett is a far larger force in the printer market, holding about a 51-percent share in 1997, compared to Xerox's 2 percent. Xerox's suit followed by about seven months an H-P trademark infringement suit against Xerox, which claimed that Xerox was making misleading endorsements on printer cartridges.

CURRENT TRENDS

Among more recent trends at Xerox Corporation have been cost-cutting efforts and a new array of digital products. These trends have been, at least in part, a result of the company's expansion efforts to compete with companies like Hewlett-Packard. For example, with a new line of digital copiers, Xerox should be able to cut into some of its competitors' network printer business. In fact, the company launched a national advertising campaign in early 1997 promoting its latest printer, the DocuPrint C55 Color Laser Printer. Other promotional efforts have included a 21-percent price reduction for Xerox's complete line of desktop laser printers.

PRODUCTS

In line with Xerox's newfound strategy has been its increasing introduction of new products. The Pagis Pro 97, for example, allows users to easily scan, copy, fax, find, print and grab, and move scanned documents to widely used desktop applications. Using a technology developed by Xerox, PerfectScan, users are able to scan color documents, save document formatting and pass them on through fax, e-mail, and the World Wide Web. Using MatchBars, Xerox has also been able to provide users with a means of organizing and finding scanned and electronic information.

During 1997, the company introduced the Docu-Color 70, a continuous feed full-color digital press, which produces 70 full-color impressions per minute. Also introduced was the DocuColor 5750 Empress copier/printer, which produces six full-color copies per minute, and the DocuColor 5799, which produces nine full-color copies per minute. For networked workgroups, Xerox introduced the DocuPrint C55, a compact color laser printer that prints three full-color pages per minute. It includes automatic image enhancement and an embedded Web server; Xerox claimed that it was the lowest-cost product of its kind at the time.

At Xerox, digital products, like color copiers, were the fastest-growing segment of the industry. However, in 1997, about 60 percent of Xerox's revenues still came from low-technology analog devices. Digital products contributed 36 percent of total revenues in 1997, 30 percent in 1996, and 25 percent in 1995.

CORPORATE CITIZENSHIP

Through the Xerox Foundation, the company has launched many community-minded programs, such as those dealing with education, science and technology, cultural affairs, national affairs, and community affairs. In 1996, the Xerox Foundation donated a total of $15 million to such programs.

Xerox has also implemented the Social Service Leave and the Xerox Community Involvement programs. Under the Social Service Leave program, employees have been able to obtain paid leaves of absence to help with community projects they have chosen. The Xerox Community Involvement Program has allowed groups of employees to receive funds to help with problems they see in their communities. Over 21,000 Xerox employees were active in more than 750 projects in the mid-1990s.

GLOBAL PRESENCE

International operations account for 51 percent of revenues at Xerox. Its largest interest outside the United States is Xerox Limited, which it purchased outright in the late 1990s. Marketing and manufacturing operations are also conducted through joint ventures in India and China. Marketing and manufacturing in Latin America are conducted through subsidiaries or distributors in more than 35 countries. Fuji Xerox develops, manufactures, and distributes document processing products in Japan and other areas of the Pacific Rim, Australia, and New Zealand.

Xerox's focus has been on developing markets like Russia, the Middle East, Africa, China, and India. With 30 percent of its sales coming from Europe, the company has remained heavily dependent upon markets outside of the United States. Forty-nine percent of the company's sales have been accounted for by the United States, while 21 percent comes from the remainder of the world.

One new market for Xerox Corporation has been South Africa. Teaming up with South Africa's Fintech Ltd., Xerox has established its business there. Xerox South Africa, operated by Fintech, has acquired the business previously conducted by Fintech under the name of Xeratech. Announced in early 1997, this partnership, the company believes, has great strategic advantages in a growing market.

Xerox has offices, manufacturing plants, and other operations around the globe. With the document processing market growing worldwide by 10 percent each year, the company has plans to expand its services when feasible to emerging markets. With existing operations in the United States, Canada, South Africa, the Middle East, and throughout Europe, Xerox has used its technological innovations to expand its operations and keep its competitive edge against other global players in the document processing field.

EMPLOYMENT

Xerox's worldwide employment increased by 4,700 in 1997 to 91,400. Xerox cited the need to hire 2,500 employees to support its fast-growing document outsourcing business. In addition, 1,300 employees were added following two acquisitions, and 1,000 were hired for increased sales coverage. These new hires were partially offset by reductions in other areas. The company is expected to cut 9,000 jobs in the late 1990s as part of its restructuring.

SOURCES OF INFORMATION

Bibliography

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deutsch, claudia h. "this time, xerox may back up promises to investors." new york times, 15 april 1997. available at http://serarch.nytimes.com.

elliott, alan r. "xerox products going digital as company trims operations." investor's business daily, 22 may 1998.

hanley, john. "xerox sues hp for patent violation." reuters, 15 may 1998. available at http://dailynews.yahoo.com/headlines/technology/story.html?s=z/reuters/980515/tech/stories/xerox_3.html.

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"xerox launches pagis pro 97: a new way to scan, organize and use color documents." yahoo! finance, 28 october 1997. available at http://biz.yahoo.com.

"xerox named no. 1 in personal copier sales." business wire, 26 march 1998. available at http://biz.yahoo.com/bw/980326/xerox_1.html.

"xerox posts higher first quarter profits." reuters, 22 april 1997. available at http://pathfinder.com.

"xerox re-invests in south africa." xerox home page, 23 may 1998. available at http://www.xerox.com.

"xerox reports 27 percent jump in profit; job cuts ahead goal." san diego daily transcript, 25 october 1995. available at http://www.sddt.com.

ziegler, bart. "xerox to unveil new copiers, challenging hewlett-packard." wall street journal, 15 april 1997. available at http://interactive5.wsj.com.

——. "xerox's quarterly profit rose; chairman is optimistic for year." wall street journal, 23 april 1997. available at http://interactive5.wsj.com.

For an annual report:

on the internet at: http://www.xerox.com/annualreport/1997/or write: the first national bank of boston, po box 8038, boston, ma 02266-8038

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. xerox's primary sics are:

3577 computer printer, manufacturers

3579 duplicating machines, manufacturers

3661 facsimile equipment, manufacturers

5044 duplicating machines, wholesale

5045 computer printer, wholesale