Keywords: high-tech commoditisation, personal computers, personal copiers, digital technology, organisational competency, first mover, dynamic strategic planning, dynamic technology strategy, risk aversion
A dynamic technology strategy for Xerox to respond to the threat of high-tech commoditisation
This paper shows how Xerox can make decisions to respond to the threat of high-tech commoditisation in copiers. The extent of the threat is seen in the example of the computer industry commoditisation by personal computers, and the negative effects on the industry leader IBM. The threat to Xerox is presented by the personal copier segment possibly being quite different, eroding existing competencies technologically and in markets, threatening profits, market share, and revenues. Decisions on digital technology, being first mover, and transition risks from the organisational competency perspective are combined using dynamic strategic planning which recognises risk and the imperfection of technological and market forecasts. Decisive strategic moves into digital technology appear to provide the best response to the threat of commoditisation of the copier industry. Aggressive strategies have higher expected outcomes under extreme commoditisation, but also higher variances and risk. Doing nothing is the worst strategy. The value of each strategy depends on the level of future commoditisation, and the risk aversion of decision makers.