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Case Studies - The Xerox 914 In 1959, the Haloid Xerox Corp. (now Xerox Corp.) hired Arthur D. Little (ADL) to conduct market research to ascertain the potential market for the 914. ADL asked secretaries how many copies they usually made each day using then-current technologies (e.g., carbon paper, dittography, etc.). Based on this data, ADL concluded that the market opportunity was 5,000 machines, far too few to justify the investment required to manufacture the 914. ADL's report concluded: "Although it may be admirably suited for a few specialized copying applications, the Model 914 has no future in the office-copying-equipment market." Xerox went ahead anyway, betting the company on their risky plan. They developed a new business model, leasing the machines for only $95 per month, which included 2000 free copies, plus 5 cents for each additional copy. Soon, companies were averaging 2,000 copies per day, and Xerox was well on its way to being a billion dollar company. Xerox eventually manufactured over 200,000 914's and estimate that total placements (with some machines being placed in multiple companies during their lifespan) was over 600,000. Ah, the joys of market research! (For more on the history of the Xerox 914, click here.) |
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