This is the detailed PESTLE/PESTLE Analysis of Xerox which explains the external factors impacting the Technology Company and Industry; Political, Economical, Social, Technological, Environmental and Legal.
The political outlook in different parts of the world affects the companies that have located their operations on a global scale. The international presence on one hand gives them access to a wider market; on the other hand it exposes them to the negative influence of political unrest in different countries. Xerox is a large scale organization which is a part of the information technology services industry. The production process of the company to manufacture different products is carried out to a limited extent in the U.S, while a larger segment of the operations is managed in other countries. This context increases the risk of financial issues for the organization in case of a political disturbance in the countries where the manufacturing processes have been outsourced (Xerox Corporation, 2014). Government changes at times bring new reforms in the business arena which can create a favorable or disagreeable business environment for the organizations, thus indicating the way political factors can affect the overall operations of Xerox Corporation. According to May (2009) the conflict in the Middle East had some effect on the company, however the effect was not significant enough to warrant a major slowdown of the company.
The economic conditions of a country can affect the way a firm performs financially in the given sector. When economic conditions are impoverished, the organizations find it hard to balance their cost and the return they receive from their input. Xerox Corporation could be disturbed due to the financial crisis as the customers’ purchase declines, or the payments issued by the corporate clients are delayed or withheld (Xerox Corporation, 2014). The financial crisis has pushed various companies to seek effective ways that could help the organization in lowering down the cost of production and management of company operations. Several large scale companies have terminated the employment contact of their workers, including Xerox (Uchitelle, 2008).
Since Xerox production processes are spread on a global level, the changes in currency exchange rates can lead to loss for the company if the conversion from local currency to US$ results in lower earnings. For instance the Japanese Yen is a weaker currency as compared to US$ and the conversion can affect the aggregate revenues. Along with that the economic sanctions could limit the scope of company operations in some regions. The company’s ability to manage its position in the credit market is also central to the successful growth and development (Xerox Corporation, 2014).
The social forces also constitute a part of the macro-environment of an industry which can have an impact on the growth and profitability of a business entity. One of the main sources that have altered the way information technology firms work is the shift from paper based communication to the digital means of interacting with others. Due to this change in the social set up of the global markets, Xerox Corporation has adopted a more up to date perspective to promote its products and the organization. As mentioned by Gill (2013), the company has included a service oriented perspective, expanding itself from being a provider of office related equipment, and integrating the services such as employee benefits management and customer care services as a part of company’s offerings to corporate clients.
The information technology sector is heavily affected by both, a minor change or the major advent of a technology, making it imperative for the organization in the industry to quickly respond to the new changes. Since Xerox has established its image as an organization that has the potential to give innovative products and services to its customers, the company needs to keep with the pace of technological advancement in the industry. Xerox Corporation needs to bring changes in the design and features included in the office related equipment to meet the needs of the target market (Xerox Corporation, 2014).
The up gradation of the service providing segment of the company is another aspect which is heavily influenced by technological advancements. For instance, development of new technology has enabled Xerox to engage in providing the equipment pertaining to automated parking service. Furthermore, the company has aimed to provide technology related services to the educational sector as well, offering the option of using mobile devices for the purpose of printing (Galliani, 2013). Another area where the technology effects can be seen is the innovation of 3-D printing, in which Xerox holds a prominent position.
There are various legal issues that can affect the functioning of IT companies such as Xerox Corporation. The taxation laws and policies imposed by the governments in different countries can affect the cost of production for the company. The company has to follow these policies and demonstrate accountability to reduce the risk of litigations. In addition to this, the trading agreements are a part of legal environment which shapes the transaction of the company with other nations (Xerox Corporation, 2014). Since the company is based on innovation, the licensing policies need to be followed along with the copyright regulations for the protection of the intellectual property possessed by Xerox Corporation. In the domain of human resource management, company policies pertaining to recruitment and selection of employees needs to be in accordance to the labor policies of government. Moreover, the management of workforce has to be aligned with the labor management principles approved by the government. For instance, the company has to offer social security to its workforce along with offering them the benefits that an organization is expected to provide to its employees (Xerox Corporation, 2014).
The environmental aspect of the macro-environment for IT sector focuses on the implementation of company policies that are in favor of the environmental protection laws. The company has used its R&D function to develop or modify its products to make sure that follow the environmental laws of a country as well as the international domain. Xerox Corporation has been focusing on the development of sustainable products for its customers to assert the company’s position as a socially responsible organization through reduction in waste and elimination of bioaccumulation (Xerox Corporation, 2014).
Galliani, K. (2013). The Right Way To Roll Out BYOD? 3 Things You Should Know. Forbes. Retrieved from http://www.forbes.com/sites/xerox/2013/08/08/the-right-way-to-roll-out-byod-3-things-you-should-know/#2715e4857a0b6bfbf5ff687b
Gill, D. (2013, October 1). Can Xerox Follow IBM’s Lead And Reinvent Itself? Forbes. Retrieved from http://www.forbes.com/sites/investor/2013/10/01/can-xerox-follow-ibms-lead-and-reinvent-itself/#2715e4857a0b79cd91986af0
May, T. (2009, February 11). INTERVIEW: Xerox Egypt’s Yehia Maaty says crisis impact minimal. Daily News Egypt. Retrieved from http://www.dailynewsegypt.com/2009/02/11/interview-xerox-egypts-yehia-maaty-says-crisis-impact-minimal/
Uchitelle, L. (2008, October 26). U.S. layoffs increase as businesses confront crisis. The New York Times. Retrieved from http://www.nytimes.com/2008/10/26/business/worldbusiness/26iht-layoffs.1.17246245.html?_r=0
Xerox Corporation (2014). Annual Report. Retrieved from http://www.xerox.com/annual-report-2014/assets/Xerox2014AnnualReport.pdf