Lexmark 2010 Annual Report Download - page 10

Strategy
Lexmark’s strategy is based on a business model of investing in technology to develop and sell printing
solutions, including printers, multifunction devices and solution software including electronic content and
document management software, with the objective of growing its installed base of hardware devices and
software installations, which drives recurring supplies sales as well as software maintenance and services
revenue. Supplies have been and will continue to be the primary profit engine of the business model.
Supplies profit helps fund new technology investments in products, solutions, services and software. As
Lexmark continues to increase its mix of managed print services and content and document management
solutions, management anticipates that the Company’s annuity mix will increasingly include services and
software, in addition to supplies. The addition of Perceptive Software adds to Lexmark’s traditional strength
in providing document solutions for specific industries and processes. The Company’s management
believes that Lexmark has the following strengths related to this business model:
• First, Lexmark is highly focused on delivering printing, imaging and document solutions and
services for specific industries and processes in distributed environments. The Company’s
management believes that this focus has enabled Lexmark to be responsive and flexible in
meeting specific business customer needs.
• Second, Lexmark internally develops all three of the key print technologies associated with
distributed printing: inkjet, monochrome laser and color laser. The Company’s monochrome
laser technology platform has historically allowed Lexmark to provide one of the best values 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 is focused on
advancing its inkjet technology, products and solutions to address higher usage customers.
Lexmark also internally develops its print and document software platforms and tools that
enable it to provide leading edge managed print services and document process automation
solutions.
• Third, Lexmark, through Perceptive Software, provides ECM software products and industry
tailored solutions to help companies manage their documents and other unstructured enterprise
content in the context of their business process and enterprise applications. This combination of
platform, product, and solutions integrates rapidly into a customer’s existing IT infrastructure and is
simple to use, which drives user adoption.
• Fourth, 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 office super stores, distributors, 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, hardware
and software products and solutions to secure high value product installations and capture profitable
supplies, software maintenance and service annuities in document-intensive industries and business
processes in distributed environments.
Lexmark’s Imaging Solutions and Services segment continues to focus on capturing profitable supplies
and service annuities generated from its monochrome and color laser printers, laser MFPs and inkjet
all-in-one (“AIO”) devices. Associated strategic initiatives include:
• Expanding and strengthening the Company’s product line of inkjet AIO devices and laser
workgroup, color and MFP devices;
• Advancing and strengthening the Company’s industry solutions and workflow capabilities to
maintain and grow the Company’s penetration in selected industries;
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