...System/360, “transformed the industry”, along with IT innovations such as development of the FORTRAN, the hard disk, the floppy disk, IBM supermarket checkout station, and an early version of the automatic teller machine”. Mr. Watson’s vision and or innovation required acquiring talent by making IBM, “the best place to work”. The late 80’s and 90’s became riddled with problems as a result of a lost vision and increasing costs. IBM’s lost vision included not predicting the problems of converting from a lease-oriented business into a sales oriented business, need for network consultants, and the evolution of the PC. Finally, costs went up faster than revenues causing lower profits. 2) What did Gerstner do when he assumed the role of CEO in April 1993? Evaluate Gerstner’s approach in crisis management. How well did he perform as a turnaround manager? What challenges did he face as he attempted to position the company for growth? In 1993, Gerstner put the customer first, consolidated costs and looked to the future. His approach to the crisis in 1993 was to get involved with IBM’s customers. Gerstner attended sales meetings, created “one IBM” (reorganization), and directed executives to “bear-hug” customers in order to retain their business. He also sought to send a message to customers that employees will be held to high performance standards. “One IBM”, was designed to cut costs while meeting customer needs. Examples include outsourcing PC manufacturing and cutting IT operations...
Words: 907 - Pages: 4
...9-805-130 REV: JULY 8, 2009 LYNDA M. APPLEGATE ROBERT AUSTIN ELIZABETH COLLINS IBM's Decade of Transformation: Turnaround to Growth This is my last annual letter to you. By the time you read this, Sam Palmisano will be our new chief executive officer, the eighth in IBM’s history. He will be responsible for shaping our strategic direction as well as leading our operations. . . . I want to use this occasion to offer my perspective on what lies ahead for our industry. To many observers today, its future is unclear, following perhaps the worst year in its history. A lot of people chalk that up to the recession and the “dot-com bubble.” They seem to believe that when the economies of the world recover, life in the information technology industry will get back to normal. In my view, nothing could be further from the truth. Lou Gerstner, IBM Annual Report, 2001 In 1990, IBM was the second-most-profitable company in the world, with net income of $6 billion on revenues of $69 billion, and it was completing a transformation designed to position it for success in the next decade. For the world leader in an industry that expected to keep growing spectacularly, the future looked promising. But all was not well within IBM, and its senior executives realized it. “In 1990, we were feeling pretty good because things seemed to be getting better,” one executive remarked. “But we weren’t feeling great because we knew there were deep structural problems.” Those structural problems revealed...
Words: 13417 - Pages: 54
...9-805-130 REV: JULY 8, 2009 LYNDA M. APPLEGATE ROBERT AUSTIN ELIZABETH COLLINS IBM's Decade of Transformation: Turnaround to Growth This is my last annual letter to you. By the time you read this, Sam Palmisano will be our new chief executive officer, the eighth in IBM’s history. He will be responsible for shaping our strategic direction as well as leading our operations. . . . I want to use this occasion to offer my perspective on what lies ahead for our industry. To many observers today, its future is unclear, following perhaps the worst year in its history. A lot of people chalk that up to the recession and the “dot-com bubble.” They seem to believe that when the economies of the world recover, life in the information technology industry will get back to normal. In my view, nothing could be further from the truth. Lou Gerstner, IBM Annual Report, 2001 In 1990, IBM was the second-most-profitable company in the world, with net income of $6 billion on revenues of $69 billion, and it was completing a transformation designed to position it for success in the next decade. For the world leader in an industry that expected to keep growing spectacularly, the future looked promising. But all was not well within IBM, and its senior executives realized it. “In 1990, we were feeling pretty good because things seemed to be getting better,” one executive remarked. “But we weren’t feeling great because we knew there were deep structural problems.” Those structural problems revealed...
Words: 13418 - Pages: 54
...The Journey of (IBM) International Business Machines Executive summary: The current Proposal intended to describe what IBM has faced in its journey and how it overcame those problems, which it was unprepared in the first place. To discuss the Success Story of IBM (International Business Machines) and journey through some easy and some tough winters. The focus will be on the problems. Introduction: IBM is one of the world’s largest rapid growths IT Company in terms of revenue, which listed in fortune 100 IT companies.IBM has produced different products, which related to software and hardware and produced custom designed microchips. By producing low cost products, IBM has rapid growth with long-term success, which attracted the investors and competitors. The head quarters were located in New York. In 2012, it has ranked 2 largest US firm for having highest numbers of employees nearly 433,362 by fortune. They have developed a wide range of software development tools, which helps to manage business process etc. IBM has first started its invention in 1914 called Hollerith, which was a part of computing -tabulating- recording company later the company known as IBM. (Rouse, 2006) Background: ...
Words: 1222 - Pages: 5
...1 IBM’S DECADE OF TRANSFORMATION In business, the fit between the business strategy with respect to products and services provided to external customers and the internal structure of the enterprise is critical for economic performance and efficiency. This paper presents the notion that information technology strategy should be articulated in terms of the external business strategy (how the firm is positioned in the IT marketplace) in addition to how the infrastructure of the information systems should be managed and configured, on top of how a company can deploy a strategy to streamline its business processes and stay ahead in the market. A point in case was how IBM able to move from a company that was going down the drain to getting back on its feet and becoming once again successful in the world market arena. This was through the various strategies that they undertook during the course of the meltdown such as acquiring the idea of the “e-business strategy”, streamlining, integrating and centralizing IT enabled enterprise processes. Not only do processes and activities lead to a successful company, leadership comes up as one of the paramount factors in the success of an organization. One of the points to note is the change in leadership that did a great a job to steer the IBM to greater heights. People like Gerstner played a vital role in bringing back IBM to life through their well cultivated leadership skills and strategies. Under the leadership of Gerstner, IBM was transformed...
Words: 325 - Pages: 2
...worst year in its history. A lot of people chalk that up to the recession and the “dot-com bubble.” They seem to believe that when the economies of the world recover, life in the information technology industry will get back to normal. In my view, nothing could be further from the truth. Lou Gerstner, IBM Annual Report, 2001 In 1990, IBM was the second-most-profitable company in the world, with net income of $6 billion on revenues of $69 billion, and it was completing a transformation designed to position it for success in the next decade. For the world leader in an industry that expected to keep growing spectacularly, the future looked promising. But all was not well within IBM, and its senior executives realized it. “In 1990, we were feeling pretty good because things seemed to be getting better,” one executive remarked. “But we weren’t feeling great because we knew there were deep structural problems.” Those structural problems revealed themselves sooner than anyone expected and more terribly than anyone feared. Beginning in the first quarter of 1991, IBM began posting substantial losses. Between 1991 and 1993, IBM lost a staggering $16 billion. In April 1992, John Akers, IBM CEO from 1985 to 1993, vented his frustrations during a company training program. His comment, “People don’t realize how much trouble we’re in,” made its way from company bulletin boards to the press, shaking employee and investor confidence. In...
Words: 313 - Pages: 2
...Ivey School of Business The University of Western Ontario 910E08 IBM CANADA LTD.: IMPLEMENTING GLOBAL STRATEGY Ken Mark wrote this case under the supervision of Professor Deborah R. Compeau solely to provide material for class discussion. The authors do not intend to iIIustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorizalion by any reproduction rights organizalion. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, e/o Richard Ivey School of Business, The University of Western Ontario, London, Onterio, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2010, Ivey Management Services Version: (A) 2010-03-29 INTRODUCTION "Sorne managers are asking us to delay the switch from our locally supported CRM software to the new global application," said Peter Silvanovich, business transformation executive, Sales & Distribution, IBM Canada Ud. (IBM Canada). Silvanovich had responsibility for - among other things - introducing, maintaining and retiring software programs to support IBM Canada's business needs. On October 12, 2009, Silvanovich was speaking...
Words: 4578 - Pages: 19
...IBM Case Analysis “What happened to IBM, the symbol of American supremacy?” -Challenge to America video, 1993 Problem Statement IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace. Problem Analysis In 1993 IBM reported a $5.6bn loss for the fourth quarter of 1992 ending a yearly deficit of $4.97bn; which at the time was the biggest annual loss in American corporate history. The fiscal loss could be explained in part to the ongoing aftermath of the severe 1990-91 recession that adversely affected the entire computer industry, but clearly IBM was no longer the colossal success it had been throughout most of its history. Primary to its listless growth was a fundamental change in the environment of the computer industry, which was the persistently accelerating rate of technological breakthrough in the world of data processing and IBM’s slow response to this change. IBM’s personal computing business technological environment was changing rapidly as the underlying shift in the computer field was from mainframe computing dominance toward personal computing...
Words: 1303 - Pages: 6
...Generic Benchmarking Worksheet Global Communications Team D |Task A: Problem/Opportunity Statement | |Instructions for Task A: In the Response row, write out the problem/opportunity statements for the scenario for each of the team | |members. | |Response to Task A: | |Name | |Problem Statement | | | | | |In order to meet the requirements of consumer demand and ensure business continuity, Global Communications need to offer better | |telecommunications services for consumers. By implementing their plan to outsource, they will cut labor cost and focus more | |attention on innovation. Before any of this can be accomplished, they have...
Words: 1845 - Pages: 8
...just help to get you started. 1. Case Study I-1 IBM’s Decade of Transformation: Turnaround to Growth (starts on page 5) This case study addresses several problems over the history of IBM, so it’s more like a series of little case studies. Focus your attention on the state of IBM when Louis Gerstner took over in April 1993, and address how he could have proceeded from that point. Of course the actual answer is the creation of One IBM, but what other options could he have pursued? Only use the exhibit data through 1994, and you can ignore the discussion of EBOs and other events well after 1994. Since IBM is both a user of IT, as well as an innovator and creator of IT equipment, they have an unusual position compared to many organizations. Focus on the problems IBM faced during this time and the alternatives they faced for dealing with the problems. What is the origin of the problem? Is it a technical issue, or customer relations, or competition, or something else? What functional areas within IBM were responsible for handling each problem (e.g. HR, accounting, marketing, engineering, etc.)? Some areas to consider: • What caused IBM to lose money in the early 1990’s? What options did they face to handle that problem? • Why was the System/360 platform significant? How did it affect the IT industry? • How was marketing for the IBM PC different from the way it handled mainframes? • Was IBM a leader in client/server and networked computing? • In Exhibit...
Words: 624 - Pages: 3
...meet and create demands International Business Machines (IBM) has proven to be able to withstand the ever changing technical world. Challenges come and go, in this case study we discuss a three-prong road that IBM faced. Should they continue to be a tech services company? Or should they explore the collaborative business model, running a risk to become exploited? Is it an option to keep the acquisition spree going for growth rather than organically grow by in-house or collaborative research and development? Facts of the case Structure, management and strategic directions IBM is a multinational corporation that started its activities in 1911. Its origins however, can be traced to 1890, during the height of the Industrial Revolution. It was first known as the Computing-Recording Company, and then in 1924, it took the name of International Business Machines. Nowadays, this multinational company is known as the ¡§Big Blue¡¨ It was first known as the Computing-Recording Company, and then in 1924, it took the name of International Business Machines. Nowadays, this multinational company is known as the ¡§Big Blue¡¨ IBM main activity is to find solutions to its wide range of clients using advanced information technology. Its clients are individual users, specialized businesses, and institutions such as government, science, defense, and spatial and educational organizations. To meet and respond to its customers needs, IBM creates, develops and manufactures many of the world’s most...
Words: 2802 - Pages: 12
...efficiency in IT service delivery. Table of Contents 3 IBM and customers both reap the benefits of cloud computing 5 Data centers in an ever-changing world 8 Cloud computing tangibly enhances business value 10 Resilient Cloud Validation: The next step in achieving resiliency 11 Cloud computing abroad: The success of the Yun platform 12 Cloud computing in Europe 13 Feeling secure with IBM’s track record IBM and customers both reap the benefits of cloud computing IT executives today can be forgiven if accused of having their heads in the clouds. That’s because the clouds that interest IT executives today aren’t of the meteorological variety; they are computing clouds. Widespread interest and even unabashed excitement about cloud computing emanates from businesses, government agencies and other organizations seeking more dynamic, resilient and cost-effective IT systems than previous generations of technology allowed. While the term “cloud” may connote an ephemeral quality to the type of computing it describes, the benefits of cloud computing to customers are very tangible. IBM itself— as well as clients around the world—is adopting cloud computing in recognition of its potential to usher in a new era of responsiveness, effectiveness and efficiency in IT service delivery. “Cloud computing represents a key technology in delivering new economics, rapid deployment of services, and tight alignment with business goals” — IBM Research Doubles its Productivity with Cloud Computing1 ...
Words: 3917 - Pages: 16
...THE RISE OF IBM 1900-1970 To meet the needs of measuring population the US Census Bureau sponsored a contest to find the most efficient means of tabulating census data. The contest was won by German immigrant and Census Bureau statistician, Herman Hollerith. Hollerith formed the Punch Card Tabulating Machine Co. in 1896. In 1911 Hollerith’s company merged with Computing Scale Co. of America and International Time Recording Co. to form Computing-Tabulating-Recording Co. During the period between 1910 and 1960, it developed products from punch-card tabulating machines to room-sized calculators to mainframe computing systems for large enterprises and changed the nature of accounting, calculation and basic back-office business processes. In the 1970s and 80s, IBM product lines expanded from its traditional mainframes to minicomputer and personal computers and applications moved from backend operations to departmental operation. In 1981, the company introduced the IBM Personal Computer or PC, allowing the use of computers in schools, homes and businesses. Components for the computer were sourced from outside the company. It developed products from punch-card tabulating machines to room sized calculators and main frame computers. The company manufactured and sold products ranging from commercial scales and industrial time recorder to meat and cheese slicers, tabulators and punch cards. In the beginning the company operated in New York City only. Within a short period...
Words: 2645 - Pages: 11
...| | |IBM’s Decade of Transformation: Turnaround to Growth | |Team 5 Case Analysis | | | | | | | |“More importantly, the passion that had come from surviving its ‘near-death experience’ and then riding the wave of what many in the company | |were beginning to call the ‘next big thing’ captured the imagination and focused the energy of a demoralized workforce looking for a reason to| |reengage in building for the future.”—Lou Gerstner | | | | ...
Words: 3570 - Pages: 15
...become the most populous nation by 2030. Thanks to the fast growing software and IT revolution, India is changing its role around the world as formable economic competitor. Despite these achievements, it should be noted that employment growth in the Indian services sector has been quite modest, underscoring the importance of achieving rapid industrial and agricultural growth. Poverty and the threat of HIV/AIDS are threatening India at a very alarming rate. In contrast, the United States houses about 4.6 percent of the world’s population, which was estimated to be nearly 6.5 billion at the end of 2005. United States is the world’s third most populous country, trailing China (1.31 billion) and India (1.08 billion). The transformation of the global economy in the last decade, fostered by the spread of the Internet and other information technologies, has significantly changed this equation for the United States, instead of leading the world in information technology...
Words: 2301 - Pages: 10
