Explain how Xerox improved efficiency and international competitiveness while also citing theories or concepts in Economics (Demand and Supply Equilibrium, Microeconomics, and Macroeconomics) and connect it with the points made.

CASE ZHHOW XEROX lOST AND REGAINED INTERNATIONAL COMPETITIVENESS The Xerox Corporation was the first to introduce a copying machine in 1959, based on its patented xerographic technology. Until 1970, Xerox had no competition and thus had little incentive to reduce manufacturing costs, improve quality and increase customer's satisfaction. Even when Japanese firms entered the low end of the market with better and cheaper copiers in 1970 and began to take over this segment of the market. Xerox did not respond, concentrating instead on the mid and high end of the market where profit margins were much higher. Xerox also used profits from its copier business to expand into computers and office systems during the 1970's. It was not until 1979 that Xerox finally awakened to the seriousness ofthe Japanese threat. From competitive benchmarking missions to Japan to compare relative production efficiency and product quality, Xerox was startled to find that Japanese competitors were producing copiers of higher quality at far lower costs and were positioning themselves to move up the more profitable mid and high-end segments of the market. Faced with this life-threatening situation, Xerox, with the help of its Japanese subsidiary (FUJI XEROX), mounted a very strong response, which involved reorganization and integration of development and production, and an ambitious companywide quality-control effort. Employee involvement was greatly increased, suppliers were brought into the early stages of product design, and inventories and the number of suppliers were greatly reduced. Constant benchmarking was then used to test progress in the company wide quality-control program and customer satisfaction. By taking these drastic actions, Xerox was able to reverse the trend toward loss of market share to Japanese competitors, even at the low segment of the market, and it now has reinvented itself to become a digital document company