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IBM Strategy
I. ... History of IBM: IBM is a multinational corporation that started its activities in 1911. ... Mission statement IBM main activity is to find solutions to its wide range of clients using advanced information technology. ... To meet and respond to its customers needs, IBM creates, develops and manufactures many of the world’s most advanced technologies, ranging from computer systems and software to networking systems, storage devices and microelectronics. Indeed, IBM has various product lines and services a few of which are: the Personal Computer that was first created in 1981, AS/400 business system, RS/6000 family of workstations and server systems, S/390 enterprise server, groundbreaking ThinkPad notebook computer; the award-winning IBM Netfinity and finally, PC Servers. ... IBM has created the image “Solutions for a Little World”. Its products and components in other firm’s products are so widespread that people around the world associate the name IBM with computing functions. ... Organization: IBM is a global information system and computing company. ... Past and current performance: For many years, IBM succeeded in holding a very good market position. ... In 1990, IBM experienced its first quarterly loss of $2billion due to some unexpected accounting charges. ... Industry trends: IBM’s old belief was that personal computers are a vital part of their overall strategy to link personal computers, minicomputers, and mainframes, their preferred product in this line. It was not quick in adapting this belief to the new reality and importance of the PC potential, so during the 1980s and early 1990s, IBM was thrown into turmoil by back-to-back revolutions in the trends of the computer industry. ... Both revolutions transformed the way customers viewed, used and bought technology, and both fundamentally rocked IBM. ... Tactics at IBM were as follows: Marketing at IBM has often been based on recycling and updating older proprietary systems architectures in which it had a vested interest. It was a IBM has made modest movesproduct rather than consumer oriented strategy. ... Due to its size, IBM makes sure that whenHQ to 6 group executives failed. ... 1991-1993 CEO Akers undertook a major overhaul of IBM: he believed the problem was high centralization, so he followed a decentralizing strategy that would greatly reduce employee levels. ... Although a $3 billion charge was made against 4th quarter earnings, IBM expected savings of $1 billion in 1992, followed by $2 billion in later years. ... b- To avoid or minimize costly delays and disruptions IBM would have to completely separate its units into distinct independent divisions with greater control over development strategies, including financial independence. IBM HQ would become a holding company with 6 autonomous divisions reporting to senior vice presidents. ... For example, IBM’s lap top model costs about $2,500 more than Dell or AST models. ... Gerstner’s strategy is to maintain IBM’s broadness to take advantage of consumer confusion in the market. Consumers will recognize IBM’s name in different products and purchase it. ... According to him, IBM’s challenge is to develop good working relations across the various operating units. ... Despite mounting pressure to split IBM into separate, independent companies, Gerstner decided to keep the company together. ... Splitting the company would have destroyed a unique IBM advantage. ... By emphasizing on marketing this kind of operations, IBM will increase its presence in world operations, by making easier for a company to trade with another one, without any physical contact. ... Strategic alliances: three days ago, IBM announced its alliance with a huge IT company, DELL. This constitutes an opportunity for IBM to become stronger and acquire new knowledge. ... As a third point, it seems that IBM should change its image among customers: when you think of IBM, the first image that comes to you is that of a computer, whereas IBM manufactures much more products: servers, mainframes, supercomputers, Internet services, and so on. ... There must be more advertising made about the other products in order to make people aware of IBM diversity. ... IBM most important competition is not within the mainframe market, but outside it, in the increasing range of other machines that can do much of Indeed, throughout the first half of the 1990s, thewhat a mainframe does. apparition of very small PCs attacked and reduced demand for mainframes, and this drove IBM almost to bankruptcy.
Approximate Word count = 3577
Approximate Pages = 14.3
(250 words per page double spaced)
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