The Reasons for the Merger of Fuji and Xerox

The merger of Fuji and Xerox was brought on by competing Western and Japanese policies. Xerox’s xerography licenses were sought after by Japanese businesses, but the plan was ultimately unsuccessful from a business standpoint. Xerox later recognized Japan as a promising market. However, Japanese law limited their foray into the area, forcing the business to sell its goods through a joint venture with a local business (McQuade and Gomes-Casseres 3). As a result, the merger made it possible to explore the Japanese market, which would not have been possible had the firms operated separately.

Diversification was required due to differences between Xerox and Fuji’s product offerings. Xerox International initially owned the rights to the xerographic technology. As part of the merger, the business granted Fuji the right to manufacture Xerox copiers in Japan and market them in Asia. Then, Fuji would give Xerox royalties and half of its profits (McQuade and Gomes-Casseres 4). Fuji diversified by producing photocopiers in addition to photographic film. The market segment of Xerox, on the other hand, was expanded. As a result, while Xerox benefited from market diversification, Fuji experienced horizontal growth. According to Davies and Hobday, diversification is one of the strategies businesses use for either offensive or defensive purposes (78). Notably, the Fuji and Xerox merger increased profits while the businesses benefited from economies of scale. As a result, the firms gained from using the diversification strategy in tandem.

The merger was motivated by the differences in needs between the Eastern and Western markets. Xerox focused mainly on the European and American markets as its primary markets. The characteristics of the regions, including consumer preferences, distribution channels for goods, and economic growth, were remarkably similar. Fuji had more market knowledge in Asia and could recognize and respond to regional market trends. Each company could then adapt to changes in competition in their specific regions. For instance, Fuji determined that small copiers were essential in the Japanese market, while Xerox determined there was no need to manufacture small copiers and concentrated on large-scale users…

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