Xerox pins big hopes on rebranding campaign

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For a company that once basked in its iconic name, Xerox Corp. has in recent years become synonymous with something more outdated than a black-and-white photocopier -- a troubled conglomerate unable to capitalize on emerging technology trends, curry favor with shareholders or grow in the new millennium.This week, the Stamford, Conn.-based company is setting out to change all that with its most comprehensive corporate overhaul in more than 40 years, as it looks to leave its recent history of stock overstatements and brushes with bankruptcy in the rear-view mirror.While many firms would view a rebranding as the starting point for a corporate overhaul, Xerox has chosen to rebrand itself just as the company is beginning to return to relevance, a deliberate strategy, chief executive officer Anne Mulcahy said in an interview last week."I'm a big believer that brands should reflect what our employees and customers see, not necessarily the aspirational," she said. "I think in this case the brand change is a logical outcome from the amazing changes the company has made."Part of the challenge for Mulcahy and her executives will be to convince customers that the change is more than superficial, and that Xerox can continue to be more than just a printing company as it expands its growing document management and IT consulting businesses.When Mulcahy took the reins at Xerox in 2000, its operations were in a shambles. Employees were abandoning the ship, Xerox's debt topped $18 billion, there was no cash on hand and to top it off, the stock dropped 15 percent the day she took over."We spent the first three or four years doing the real heavy lifting ... developing a business model that would deliver sustained results and making investments for the future," she said. That heavy lifting included slashing the work force, clearing up a $1.4 billion earnings overstatement, boosting outsourcing and trimming $3 billion in costs.But some will see today's announcement as a return of sorts to what Xerox founder Jim Wilson and long-time former CEO Peter McColough envisioned the company could have been had things turned out differently.McColough especially felt Xerox had the capability to become a multifaceted technology company, although antitrust investigations and increasing competition from Japanese imports prevented the company from getting in on a number of developing industries, including the PC revolution.As it branches out and expands into new areas, the Xerox of today is starting to look more and more like the company many believed it could be 25 years ago."The rebranding is just the cover of the story" Mulcahy said. "But I think the story is more fundamentally about what the company has done to transform itself."Since nearly bottoming out in 2000, Xerox has moved beyond its core business of photocopiers and black-and-white printers aimed at large enterprises. Xerox has elbowed its way into document management services and IT consulting, expanded its presence in the small and medium-sized business markets, and invested heavily in digital imaging and new ink technologies, including color and solid inks.In fact, solid ink technology could be a key ingredient in the company's future. In September, Xerox launched the Phaser 8860, a printer that uses solid blocks of colored ink with a consistency similar to crayons that is heated before going on to the page. It costs about the same as printers from rivals such as Hewlett-Packard and Lenovo, but Xerox says its printer can print color pages as cheaply as black-and-white, making the Phaser a more attractive option for businesses.Xerox's services business is growing, the company is enjoying double-digit earnings growth and made a series of acquisitions that have helped it move into new markets and target small and medium-sized businesses, mostly notably the $1.5 billion deal for Global Imaging Systems.In November, the company announced its first quarterly cash dividend in six years -- 4.25 cents a share -- and has projected double-digit profit growth in the coming years.Even a possible economic slowdown in the U.S. isn't a concern for Xerox, Mulcahy said."I think we've positioned Xerox to be quite resilient," she said. "We're an annuity-based business with a diversified geographic and industry profile and the whole value proposition that we offer our customers is about efficiency and bottom-line and top-line returns which are well in vogue right now."(Distributed by Scripps Howard News Service, www.scrippsnews.com.)