Ibm Case Study Paper

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IBM's Decade of Transformation: Turnaround to Growth

MIST 705 Information Resource Management

Ho Keung Philip Lee



1. Introduction

Since we are in a technology dependent era, we should take a look into the growth of International Business Machines Corporation, or IBM. IBM was founded in 1911 through the merging of three companies and this is where IBM is known as the dark suited sales people, an image of corporate pride and loyalty. IBM started out with Thomas J. Watson being the first leader of the company. In 1991, IBM was faced with a revenue decline, the company’s earnings dropped to negative $2.8 billion. Between 1991 to 1993, IBM’s total lost was $16billion. John Aker, IBM’s CEO from 1985-1993, start some actions to try to save the company from going out of business and telling the public that IBM is in very deep trouble. The next CEO took charge, Louis V.Gerstner, the public doubt him to recuse the company because he has little to no experience in the technology industry but the insiders knew that Gerstner was just going to break IBM apart for sale, not to recuse IBM. However Gerstner took approach towards the customers and establish a slogan for the company, “We put customers first”. Under Gerstner leadership, IBM was back on solid grounds by 1995, with the internet boom, IBM start growing as a company again but at a slower rate than the information technology industry as a whole. Sam Palmisano, a 31 year company veteran, took over IBM in 2002 after Gerstner. Palmisano wanted to bring IBM back to greatness, he focus on collaborative innovation and ad hoc solution teams.

2. Case Background

Business Strategy used

* 1960s

* Product: the S/360 dominant industry design

* Market: targeted large companies eventually expanded internationally

* Channel: Key accounts sales people sell to technical buyer.

* Competitors charge monopoly power

* 1980s

* Product: Expand to 5,000 hardware &...