BACKGROUND OF XEROX AND FUJIXEROX

Xerox Corporation is an American multinational document management corporation that produced and sells a range of color and black-and-white printers, multifunction systems, photo copiers, digital production printing presses, and related consulting services and supplies. Xerox was founded in 1906 in Rochester as The Haloid Photographic Company,which originally manufactured photographic paper and equipment. The company subsequently changed its name to Haloid Xerox in 1958 and in 1961, the company changed its name to Xerox Corporation. The company introduced its legendary 914 copier in 1959, the worlds first automatic plain paper copier (PPC), and produced high-quality copies four times faster than any other copier on the market. These advantages, coupled with an innovative machine rental scheme, led Xerox to dominate the industry for nearly 20 years. Company revenues rose from $40 million in 1960 to nearly $549 million in 1965, and to $1.2 billion in 1968, breaking the American record for the fastest company to reach $1 billion in sales. Net income grew from $2.6 million in 1960 to $129 million in 1968. In a mere decade, the name Xerox had become synonymous with copying Xerox moved quickly to establish an international network. Lacking the funds to expand alone, it formed a in 1956, Rank Xerox was formed as a 50/50 joint venture between the Xerox Corporation of U.S. and the Rank Organisation of UK, to manufacture and market Xerox equipment initially in Europe and later in Africa and Asia. Xerox would be entitled to about 66% of the profits of Rank Xerox. Rank operated a lucrative motion picture business and was seeking opportunities for diversification. Rank Xerox (RX) was to manufacture xerographic products developed by Xerox and market them exclusively worldwide, except in the United States and Canada. By the early 1960s, Rank Xerox had established subsidiaries in Mexico, Italy, Germany, France, and Australia. In 1964, Xerox bought back the right to market xerographic products in the Western hemisphere. Xerox had successful partnerships. One of which was the Fuji-Xerox joint venture established in 1962, as a 50:50 partnership, with Japanese photographic firm Fuji Photo Film Co. and Rank Xerox,to develop, produce and sell in the Asia-Pacific region. It brought the best of both companies together. When the Japanese government refused to approve a joint venture intended

solely as a sales company, however, the agreement was revised to give FujiXerox manufacturing rights. Fuji Xerox,not Fuji Photo Film,then became the contracting party with Rank Xerox, and received exclusive rights to xerographic patents in Japan. FujiXerox, in turn, subcontracted Fuji Photo Film to manufacture the products. Initially Xerox set out to license manufacturing to enter the Japanese market, Xerox provided management know-how, resources and skills, whereas Fuji had local market knowledge, distribution channels, and operational skills. The alliance enabled mutual learning to take place which led to some of the most successful advances in technology and manufacturing excellence. Originally only as a distributor of Rank Xerox products, Fuji Xerox later began to research and develop its own xerographic machines and other devices, beginning with the 2200 photocopier in 1973. Today the company is responsible for the innovation and manufacture of many of the colour printing devices sold by Xerox Corporation. Its innovations include the world's first multifunction printer/copier, the "Xero Printer 100", launched in 1987.Fuji Xerox expanded into Australia, New Zealand, Singapore and Malaysia in 1982 by purchasing distribution rights from Xerox Corporation. Xerox Corporation transferred its China/Hong Kong Operations to Fuji Xerox in 2000 and Fuji Photo Film Co. Technology agreements and other contracts between Xerox and Fuji Xerox provided guidelines for the relationship. In addition, the contracts specified royalties and transfer pricing procedures.