Lexmark 2009 Annual Report Download - page 9

inkjet multifunction products designed for office use such as wireless and ethernet connectivity, automatic
document feeders and duplex capabilities, as well as web-based applications to automate print and
document related work functions. This trend represents an opportunity for the Company to pursue revenue
growth opportunities with its inkjet products and solutions targeted at SOHO and business market
segments.
Strategy
Lexmark’s strategy is based on a business model of investing in technology to develop and sell printing
solutions, including printers, multifunction products and solution software, with the objective of growing its
installed base, which drives recurring supplies sales. Supplies are the profit engine of the business model.
Supplies profit then funds new technology investments in products and solutions, which drive the cycle
again and again. The Company’s management believes that Lexmark has the following strengths related
to this business model:
• First, Lexmark is exclusively focused on delivering distributed printing and imaging, and related
document solutions and services. The Company’s management believes that this focus has
enabled Lexmark to be responsive and flexible in meeting specific business customer and
channel partner needs.
• Second, Lexmark internally develops three of the key print technologies associated with distributed
printing, including inkjet, monochrome laser and color laser. The Company’s monochrome laser
technology platform has historically allowed it to be a price/performance leader in enterprise
network printer-based products and also build unique capabilities into its products that enable it
to offer customized printing and document workflow solutions. Lexmark’s focus is to advance its
inkjet technology, products and solutions to address higher usage customers.
• Third, Lexmark has leveraged its technological capabilities and its commitment to flexibility and
responsiveness to build strong relationships with large-account customers and channel partners,
including major retail chains, distributors, direct-response catalogers and value-added resellers.
Lexmark’s path-to-market includes industry-focused consultative sales and services teams that
deliver unique and differentiated solutions to both large accounts and channel partners that sell into
the Company’s target industries.
Lexmark is focused on driving long-term performance by strategically investing in technology, products
and solutions to secure high value product installations and capture profitable supplies and service
annuities in document and print intensive segments of the distributed printing market.
PSSD is primarily focused on capturing profitable supplies and service annuities generated from
workgroup monochrome and color laser printers and laser MFPs. The key strategic initiatives of
PSSD are:
• Expand and strengthen the Company’s product line of workgroup, color laser and laser MFP
devices;
• Advance and strengthen the Company’s industry solutions and workflow capabilities to maintain
and grow the Company’s penetration in selected industries;
• Advance and grow the Company’s managed print services business;
• Expand the Company’s rate of participation in opportunities;
Lexmark’s PSSD strategy requires that it provide its array of high-quality, technologically-advanced
products and solutions at competitive prices. Lexmark continually enhances its products to ensure that
they function efficiently in increasingly-complex enterprise network environments. It also provides flexible
tools to enable network administrators to improve productivity. Lexmark’s PSSD target markets include
large corporations, small and medium businesses (“SMBs”) and the public sector. Lexmark’s PSSD
strategy also requires that it continually identify and focus on industry-specific print and document process-
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