Lexmark is no longer participating in the consumer inkjet printer business, and its exit has resulted in the loss of 1,700 jobs. The company decided to exit the business in order to refocus its efforts in an attempt to improve profitability at the hardware manufacturer.
Lexmark announcing its plans to exit the consumer hardware business will instead focus on enterprise options, which PC World says includes:
“Higher-margin products like multifunction printers, managed print services, and software.”
Lexmark profits began to collapse after its competitors adapted a slim margin marketing campaign. Under those plans HP, Canon, and Xerox began to sell their printers at almost no profit and then made up for that margin through the sale of cartridge refills and other printer supplies.
The low margin model didn’t work for Lexmark after the company failed to create the high volume of sales needed to sustain the new sales model.
To make up for lost inkjet profits, Lexmark has entered into data capture and manipulation with its “intelligent capture” tools. Those tools allow computers to understand and organize information after being scanned from various sources.
Lexmark will still compete in its new space with HP, Xerox, and other company’s they faced off against in the printer business.
The technology firm is believed to be seeking out potential acquisitions and partnerships that will help it grow outside of consumer products.
Do you think Lexmark can reinvent itself by shifting its focus away from consumer goods towards the enterprise sector much like IBM successfully accomplished many years prior?