Reaction Report of IBM case

1. Description of the Case: New facts and illustrations - Nobody believed that IBM would face a crisis because it had achieved huge success before 1990. However, the company finally faced difficulties. In order to save the IBM, Gerstner was new in office as a CEO in 1993. He started innovative measures such as decreasing cost, communicating clearly, restructuring organization, and connecting with key customers to solve the problems. In addition, he reorganized as one IBM and created the foundation for growth, and then shift to high growth and the search for “the next big thing”. As a result, shifting its strategy from marketing and selling specific products and services to marketing and selling solutions to problems that have yet fully defined, IBM becomes the company which Warren Buffett prefers most from the collapsing company by competition with cheaper PC made by Chinese and American company such as Compaq and dell. From this case of IBM in early, we can learn that large established companies such as IBM can be difficult to build successful and sustainable new business. First of all, being elated by existing success, employees couldn’t notice the change of market. In addition, well-aligned business model is necessary for success, but tight alignment can also make it difficult to change. If business models fail to successfully evolve overtime, misalignment with the environment can occur.

2. Key questions and issues of case & Analysis
1) What’s the core problem IBM faced in early 1990s? And how can IBM overcome the problem to transform from turnaround to growth?
- Even if IBM had a successful story and got famous reputation for leading edge of computer technology, they still stick to the old business model of mainframe based thoughts and overlooked the PC market. Besides, the organization has deep level of hierarchy and