Bowes Postage Meter Company Case Study

Paper Type:  Case study
Pages:  7
Wordcount:  1874 Words
Date:  2022-03-29

1. Company Background

The 20th century was one of the most defining periods in the history of man.This is the century marked by rapid industrialization all over the world, especially in Europe and the United States. For the first time, urban centers became home to thousands of Americans seeking greener pastures than rural farms could offer them. Cities mushroomed all over the US. The world war one has often been attributed to rapid advances in technology in the first two decades of the 20th century. For example, the US experienced a tremendous improvement of infrastructure. More roads and vehicles came into use for instance. Communication was also revolutionized. One of the most renowned companies at the forefront of industrial revolution during this time was the Bowes Postage Meter Company.Today, this company is known as the Pitney Bowes. This company is a product of two companies; the American Postage Meter Company formerly known as the Arthur Pitney's Pitney Postal Machine Company and Walter Bowes' Universal Stamping Machine Company. As a unified entity, the company became more efficient in using the postage meter and similar products to help move mail and parcels across the US. The PB company was a big success in the first decade of the 20th century. Its long-term success can be attributed to two main factors.First, the PB core principle was to add value to the society and not to make profits. It believed that helping enterprises and consumers to communicate quickly was the most crucial factor that would make it a credible and most profitable company in the US. The company also moved physical artifacts all over the United States, and this became a reliable income generator for the company. Therefore, perceived as an indispensable company, the PB expanded rapidly in America.

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The rapidly advancing technologies, regulations, and customer preferences continue to transform the global environment. Today, the Pitney Bowes is a global player that powers billions of commercial transactions either physically or digitally. It is a company that has been able to withstand the test of time and is the success of many small and big companies can be attributed to it. This firm has been at the forefront of collecting, sending market-related information for companies in the 21st-century world. I chose this company because it represents a classic case of a firm that headed for failure several times as shown by its stock price charts, although its leaders have always been aware of the need to transform and adapt to the changing environment. Although its current stock price trend is not anywhere close that experienced at it's prime in 2000, the company's previous and current CEO have reinvented and diversified the firm in several ways. The most notable are: focusing on Pitney Bowes core strengths and the acquisition of several firms. The results of this transformation will become more evident as time passes.(

2. Beginning of the End When, How, and Why Did the Company’s Performance Begin to Lag, Including Changing Market Factors

Though the PB Company has seen some of the most challenging days that threatened its extinction, the most perilous times were witnessed in the early first decade of the 21st century.This is the time when the company was almost forced out of operation by a combination of several market factors.The factors included bioterrorism and recessionary economy which caused the mail volume to go down.The economy, slowly getting into the pit, caused the postal rates to rise. These factors meant that many enterprises switched their mailings to cheaper private companies such as Federal Express.For the first time, the volume of physical mail in the United States reduced to such a great extent that the company began losing over 60 billion in annual revenue by the end of the 2010 fiscal year.A large number of mails was also done over the internet which proved to be a cheaper and more efficient way of communication. There was also stiff competition from other established market.Given the fact that money from renting out PB relied heavily on renting postage meters and running mailrooms, the company began to run out of cash required for operations. In fact, the CEO at the time, Michael J. Critelli acknowledged that the company was sailing over rough waters. He pointed out that there was a sharp reduction in mailing services but added that this would be a temporary predicament. He said that the company's stock market would be back to normal in a short while since the company increasingly became aware of the importance of better mailroom management and postage meters( November 10th, 2017).

The Pitney Bowes company had sensed the impending difficult market times in the last two decades of the 20th century and had successfully implemented a variety of measures to ensure that it always remained afloat during those times.For example, Mr.Critelli, the company's CEO had predicted that there would be a steep decline in the mail revenue for quite some time.He noticed that many businesses were slowly migrating to the e-mail platform for correspondence and marketing(,November,2016).The firm thus reacted by switching to a distribute and print model. This means that the customers and the recipients printed the e-mail documents themselves hence giving PB an upper hand over other companies that only utilized the electronic mail and never gave an option to print them out.The company also infiltrated banks and several utilities that enabled customers to access their bills online, for example using debit cards of their respective accounts.Pitney began emulating companies such as the American Express which utilized electronic cards to enable customers pay their bills electronically .As a result, the company had already began generating over $4 billion in revenue from non-mail related entities.It has been slowly shifting from the old way of doing business using mails to other new but related ventures which utilize technological advancements.An example of an electronic platform the company has already implemented is the online bill paying system.The company has managed to tap into the existing wide market and has acquired a pool of regular customers who use this system.The company has also been aggressively trying to acquire electronic delivery companies.Recently, for example, it purchased Alysis, which is a company dealing with electronic payment systems(, November 10th, 2001).

The company has been struggling to rebrand itself as a digital company mainly at the face of the rapidly advancing technology (Scott,2016). Old ways of mail delivery seem not to be working anymore as they used to be, for example, 50 years ago. Going digital is a promising path for the company's future. However, the primary challenge is that no company can successfully reinvent and diversify itself over a short period. It is always difficult to shift all the operations to a new platform at a go.

3. The End: What Did the Company Do, Unsuccessfully, to Survive and Why Did These Attempts Ultimately Fail?

The Pitney Bowes company has been known for postage meters for almost a century now.It has grown globally to such an extent that it supplied over a million customers with essential mailing services.However, the primary challenge that has continued to plague the company is the rapid migration of its customers to the digital platform.Many customers have been doing most of their communications online as of late.The company has therefore been making a slow transition into the digital platform.In 2012, the company hired a new Chief executive who would ensure that it successfully migrates to the digital platform.Mr.Lautenbach arrived at the company when revenues were experiencing a downward trend.As the company evolved, however, the revenues continued to decline.Even as net income rose from $143 million in 2013 to around $408 million by the end of the 2015 fiscal year, revenues fell from $3.9 billion to $3.6 billion over the same period. This showed that the company was struggling to keep up with the market.This made many investors question the decision of the company's executives to move from the physical platform of conducting business to the online digital platforms. Mr. Lautenbach's ambition to make Pitney Bowes a leading player in the e-commerce sector was therefore questioned. This decision made to make the company an e-commerce platform was mainly for the long-term performance of the company and not the short term. The company's most desperate times have been experienced especially over the past decade. The company's stock, for example, had lost value from more than $22 per share in early 2012 to around $14.50 in 2014. This decline in the company's stock market means that its market share is declining. These challenges can be attributed to its rough transition to the digital platform.The failure of the company to keep up with the rapid advances in technology is the main reason why it is struggling to survive in the market(, 2016).

4. The Turnaround: Based on What You Have Learned in This Class So Far, What Would You Do as Company President to Refocus and Rebuild This Company Within a Five-Year Timespan? Include a Year-By-Year Timeline of Actions You Would Take and Expected Outcomes.

The most critical factor for the success of any company facing stiff competition(just like Pitney Bowes), is making and implementing certain decisions. If I were to be elected as the company's president to refocus and rebuild it within a five-year span , I would focus on the firm's strengths and core competencies ( ). As Mr.Lautenbach did, I would answer the following critical questions:

What business are we in today?

We are in an era where businesses utilize technology to run.This modern technology involves, for example, includes online shopping. Companie such as Amazon are the potential clients for Pitney Bowes.The company can exploit these online retailers by helping them solve any problem involves the cart, the cart management, online purchases, all the way through the shipping. There's a bunch of complicated stuff in the middle of those transactions which Pitney Bowes can do. These include customs, duties, which the right shipper is-and Pitney Bowes can solve all that.

What new opportunities does the disruption open up?

Normally perceived as a threat, disruption is a great growth opportunity. Disruption always grows markets, but it also always transforms business models. The company culture should see changes, not as threats rather as opportunities. Pitney Bowels is experiencing tremendous changes especially because it is evolving into an e-commerce giant and this is a great opportunity.

What capabilities do we need to realize these opportunities?

As incumbents for almost a century, we are best positioned to seize disruptive opportunities. After all, they have many capabilities that entrants are racing to replicate, such as access to markets, technologies, and healthy balance sheets. We can utilize our market experience to outshine our young competitors.

Pitney Bowes has been purchasing e-commerce companies as of late.These companies include MapInfo and Borderfree.They have robustly enhanced Pitney Bowes capabilities in the digital market.Today, the company is becoming the lynchpin of the digital ecosystem.The company has gotten access to some of t...

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Bowes Postage Meter Company Case Study. (2022, Mar 29). Retrieved from

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