Saturday, September 03, 2011

Fumbling the Future of A Once Great Industry - HP, Canon, Ricoh, Lexmark, Xerox and Kodak

This week's Businessweek article "For Kodak Change Isn't Instamatic" talks about Kodak's CEO Perez as he tries to bring digital revival into focus. The timing of such a massive turnaround is a bit off.  In Kodak's case however, better late than bankrupt.

In the past I have criticized Kodak for being too slow and too scattered to successfully pull it all together. One thing I must give Antonio Perez is his consistent leadership and sheer determination to stick to his plan despite all criticism from shareholders and Wall-Street.

Given once-in-a-life time chaos and disarray in the Document Industry, Kodak and particularly its leadership team suddenly look pretty good.

By a historic mistake, Canon just watched Ricoh snap IKON, 40% of its US business.  They did not even fight.  Just watched it happen and lost forever. Their response was even worse: buying another irrelevant box company Oce and turning all MFD distribution exclusively to HP. Canon will never be the great samurai once it was fighting passionately to win against Xerox back in the 70s.

HP has became even worse now - chaotic & suicidal with the new CEO Leo. You may want to read my blog post on HP's latest misfortunes and decide for yourself.  I hear that Leo may be selling the printing business next following PCs.

Ricoh bought IKON - a loose federation of once independent dealers. Prior to acquisition, IKON was itself painfully trying to become one integrated company. The buyout brought too much burden on a Japanese company that always managed coercively from HQs in Tokyo. Other than buying IKON, they largely missed out on the industry's services-led transition into consulting and managed print services (MPS). Recently, they fired the head of Americas. I hear a lot of talent has been leaving. Japan's old miracle of doing it "better faster cheaper" simply does not help you with services where talent and minds talk and win business. Not equipment nor factories nor kaizen....

One should not forget Lexmark, another IBM spin-off offering good technology with successful vertical solutions marketing. When the industry started consolidating at a rapid pace, Lexmark was one of the obvious printer companies to merge with. Curlander who has been the Chairman since then and his board repeatedly turned them down stating that Lexmark can continue propser and grow on its own. I will let shareholders do the math here. Now that the music has stopped, Lexmark is suddenly finding itself with no partner, limited resources, near-empty pockets in a brutally commoditized over-supplied industry desparately fighting against giant competitors. Sort of like Don Quixote fighting windmills!

And finally my old company Xerox; Under Ursula Burns, they placed two big bets and bought Global Imaging and ACS.  By doing so, they publicly announced the world the old Xerox did not in fact know how to manage or execute or build growth. Why? Global Imaging is being managed separately. Xerox Global Services has reverse-merged with ACS. Just when you think it can't get any worse, Ursula is now selling off engineering. Yes, once ran and led by engineers, the mighty Xerox is now selling off engineering! In a world where "Companies That Are Built To Last" are fighting for intellectual property, R&D, creativity and top talent, Xerox first sells off PARC. Then the entire engineering group.

I would say Kodak suddenly looks pretty good among its peers! When you have competitors like these, I would say to Antonio, just stay focused keep executing as fast as you can.

1 comment:

jeffs said...

Interesting points.
Having left Rank Xerox in the mid 80s. I have regularly used what was the Copy service.
It has gone from being Xerox owned to independent to part of a group to now a HP print shop with HP (Branded?) copiers.
The only consistency is the same three people have worked there for30 years