SO WHY DID LEXMARK COMBINE INKJET & LASER DIVISIONS ?

[Anonymous]

http://www.kentucky.com/2010/12/13/1564495/behind-the-decision-to-combine.html

SO WHY DID LEXMARK COMBINE INKJET & LASER DIVISIONS ?
Lexmark
International’s recent decision to combine its laser and inkjet printer
divisions was made to mirror the company’s strategy of recent years,
its chief executive said last week.Paul Rooke is a firm believer that a
company’s management structure should follow its strategy, he said, and
Lexington-based Lexmark’s has been evolving to focus its inkjet division
more on business customers, who are the core base for its laser
division.

Lexmark has been radically realigning its inkjet
division because the company found in recent years that the consumers
who once bought their printers, which were sometimes bundled for free
with computers, weren’t buying enough of the highly profitable ink to
meet profit expectations.Since that time, the company has redesigned its
inkjets to focus more on business customers, who print more than
consumers. The printers now offer touchscreens and so-called “Smart
Solutions” that allow companies to customize many settings and
applications for individual users.As the company evolved technologically
to build those products, it already was consolidating technical
functions because the laser and inkjet offerings were blending, Rooke
said.

When the company began discussing the October retirement of
CEO Paul Curlander and Rooke’s elevation from inkjet leader to CEO, the
latter said “it was a natural transition point, if you will … to
transition the rest of the organization.””Structure follows strategy,”
he said. “I looked at our strategy and how it was evolving. As …
inkjet and laser’s strategies were converging, it made sense to
therefore converge the structure.”The combination of divisions didn’t
mean any job losses, the company has said, other than the position of
inkjet leader, which wasn’t filled after Rooke’s promotion. Marty
Canning, who led the laser division that was previously overseen by
Rooke before he took over the troubled inkjet unit, leads the combined
division.

The move will help Lexmark’s salespeople, as the
combined division will mean “a broader and better set” of offerings for
customers as the development teams work united instead of as part of two
divisions, Canning said.”The sales organization was already
representing both of these product portfolios,” he noted. “They just
didn’t have a product development organization as aligned as we will be
…”We can solve a larger set of their business problems because of
this.”Rooke added that the combination of divisions also will mean “more
consistency across the full breadth of technologies addressing business
customers’ needs.””That will be a powerful statement for us,” he
said.Employees have been receptive to the change, Rooke said, as many
already had seen the shift coming since the inkjet strategy change in
recent years.

One group of employees that will still be a
standalone division, though, is Lexmark’s recently acquired Perceptive
Software unit. The Kansas-based company develops software that helps
businesses manage content.”We intentionally kept it separate because
it’s a smaller piece,” Rooke said. “A lot of times if you try to combine
a smaller piece with a bigger piece, it can get squashed, and we didn’t
want that to happen.”

Perceptive Software CEO Scott Coons said
the key is that Lexmark’s reorganization hasn’t changed its
strategy.”The goal is to grow Perceptive Software and leverage all the
great things Lexmark brings to bear to grow our business,” he
said.Reaction to the reorganization has been positive from the analyst
community, Rooke said. Among those who find it encouraging is Ed
Crowley, founder of Versailles-based printer industry research firm The
Photizo Group.”That’s really going to be a big positive for them,”
Crowley said. “I think it’s a smart move.”He said it didn’t make sense
at this point to have a full division and the infrastructure that comes
with it to go after the business customers for inkjet.”It really brings
them to a singular focus,” he said

http://www.kentucky.com/2010/12/13/1564495/behind-the-decision-to-combine.html

[Author]

December 14, 2010 at 8:55 AM