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Company profile

Pitney Bowes Inc. is a


manufacturer of
software and
hardware and a
provider of services
related to documents,
packaging ,mailing
and shipping,
collectively referred to
as mailstream.
• Pitney Bowes believes innovation and
growth go hand-in-hand with long-held
ideals such as collaboration, integrity
and accountability to deliver value for
their customers.

• Pitney Bowes has one goal : to help their


customers achieve their goals.
Recent Acquisitions 

MapInfo (2007) - location intelligence solutions


Digital Cement (2007) - customer relationship management
Print, Inc. (2006) - print management solutions
AAS and PMH (2006) - web-based custom marketing tools
Ibis Consulting (2006) - electronic discovery services
Emtex (2006) - document production software
Imagitas (2005) - mail-based marketing services
Compulit (2005) - litigation support in legal profession
International Mail Express (2004) - mail services
Group 1 Software (2004) - customer intelligence software
Prologue

• Pitney Bowes, there is threat of obsolescence


because of “snail mail”

• It was only a single product : the postage meter, but 85 years


after Arthur Pitney and Walter Bowes the core changed
into processing of physical mail for its core business.

• In a world that changes so fast into e-mail and other electronic


communications, Will Pitney Bowes destined to be like
Pony Express?
Prologue
• At early 1960s think that the company future lay in broad
diversification.

• The company had taken at least 6 different tacks, venture


capital equipment leasing, mortgage servicing, and retail
supply chain systems

• But those plans is already shed and back to core business of


helping companies manage their mail and documents more
effectively.
the journey

Core
1920-1960 business:
Physical
mail
diversified diversified
cross industry cross industry

Capital Retail supply


1960-2000 equipment chain system
leasing
Mortgage
service
the journey
Core
2000-present
business:
Physical
mail
diversified diversified

Geographic Product
expand expand
New york hardware
Maryland software
Danbury
mailstream
etc
Pitney’s quadrant

broad 2000-now
O
U
T
P
U
T

narrow 1920-2000

narrow broad
INPUT
Diversification through acquisition and merger

• Purpose:
For growth instead of risk management
(align with new purpose of diversification)
strategy to success

1. foreseeing change overtime


2. keeping an ear to the ground
3. reframing the questions
4. thinking in terms of solution
5. pulling together
6. striking a balance
Strategy #1: Foreseeing Change over Time

• The company sweet spots such as first class transaction mail –


consumer originated mail, bills statements, correspondence – is
declining in recent years
( overall mail volumes in U.S. grew 1.9% between 2001 and
2003 but Pitney Bowes participate a little )

• The expected decline of Pitney Bowes :


1. If experience 1% decline per year, the mail stream would
decrease to half its size in 72 years.
2. If experience 6% decline per year, the mail stream would
decrease to half its size in just 12 years.
Strategy #1: Foreseeing Change over Time

• Pitney Bowes also think about the future of


government postal services :
1. U.S. Postal Services
2. European Union
3. Deutsche Post

• Pitney Bowes happily sees fast rising demand for


the company ‘s broader portfolio : mail &
document management hardware, software, and
professional services.
Strategy #2: Keeping an Ear to the Ground

Michael Critelli performs:


1. Hiring strategic thinkers
2. Revisiting the issues constantly
1. Critelli hires strategic thinkers…
…to monitor present and future conditions

Strategy officer to focus on anticipating the future

Full time professional to look at factors that could influence the future of mail

Scenario planning to understand how the factors will evolve

Postal policy council to monitor the data and environment for changing
conditions
2. Critelli revisits the issues constantly…
…to find possible implications and opportunities

Take notice on:


1. Surprising piece of news, to find the possible implications
for the business,
e.g. Terrorism->crisis management task force

2. More subtle changes, to find immediate customer service


opportunity and broader strategic implications,
e.g. Electronic check clearing->Fulfillment activities.
• Grove’s inflection point

A time in the life of a business when its fundamentals


are about to change.
• Insights:

- A tremendous amount of value is added in the fulfillment process.


e.g: making sure documents look just right, get to the right people, and
in interesting format

- The company can go further in standardizing and marketing the


fulfillment offering.

• Conclusion:
The mail market will be even bigger and more valuable.
Strategy #3: Reframing the Questions

“How much influence do we have over the outcome?”

“How can we reshape the context to our advantage?”

Innovation!
Dialogue with market forces
Strategy #3: Reframing the Questions

To be able to create the innovation and be success in performing the


diversification, Critelli’s strategy was:

Change the way ●


what percentage of the mail are we participating in?
of thinking: ●


how are we participating in it?
how many pennies do we get per piece?
Think differently!

Actual: 30 bio pieces of mail /year  $8.7 cents per piece on average
 continues to rise

Target: reach $9 cents for every piece posted by a midsize mailer


Strategy #3: Reframing the Questions

Looking • analyzed mailing value chain and focus


aggressively for on “presort”
profit zones • ancillary professional service

able to find several areas in which people are willing to pay


premiums for what we offer.
Strategy #4: Thinking in Terms of Solutions

Aim in formulating a solution :


Realize the full potential of strategic goal to provide
solutions for customers and generate superior shareholder
returns.

If the company want


to be profitable Custom
Custom
er
er
Satisfac
Satisfac
tion
tion
The Solution :
•Set of standardized regulation
•Highly cost-effecitve offerings
•Culture Change

Acting
entrepreneuriall Very standardized
y and and in disciplined
customizing the way
service.
Example :
Pitney Bowes provide mailroom and copy-center services to scores of banks
and law firms in New York City. It used to be that an individual site with a
backlog of work would send that backlog to whatever third-party copy shop
was down the street .
Now they have opened their own centrally located service center;it has high-
speed capacity to support all their New York sites and can generate its own
business as well
Final output solution objective
:

“ refocusing core business and


provide a more toward a more
integrated business model”
Strategy #5: Pulling Together

The company already used a high freedom in work for 35 years


and now the have to change it...

It’s not easy to change it because the freedom concept


was implemented agressively in almost every division

At that time freedom concept was a workable strategy


because there was not as much as overlap in customer based
of their various business

There is a conflict among employees because they were more loyal


to their division then the overall company
Why the company need to pull together?
The shifting strategy has a deep implications for an
organization.

The company required unity in


form and spirit to supports the
strategy

Realigned the organization to make costumer


servis more seamlessly, move toward a more
itegrated business model, and executed
growth strategy more agressively
Strategy #6 : Striking to Balance

There is gap between CEO ambitious vision and the capacity


of the industry.

What happen? the employee are not used to work in groups,


focused merely on the budget instead of company’s benefit and
executive culture (cannot work multitasking)

Lesson learned: change agent should be more patience


Strategy: have an executive transformation committee
• Transformation in Pitney Bowes means become focus on CORE

business and OPERATING as one company

Strategy :

• - formulating plan of attack rather than blaming the troops

• - help people see things differently and reach the same vision
Conclusion
Important points from Pitney Bowes’ case:

Recognize company’s strategic asset

Market Diversification

Understanding competitive context

Alignation of all resources: capital, human

Change agent is needed

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