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Case Study Ibm

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1. When IBM was on the decline, a new CEO, Louis Gerstner, Jr was brought in. Gerstner was quick to identify the problem that was that IBM had lost touch with their customers and that the marketplace was shifting towards the application of technology not its inventions. IBM thus changed their focus on their customer’s needs and shifting their primary focus towards business services. IBM withdrew themselves from the network hardware business, storage and personal computer business and entered the service and software business. The company had to rely on their experience and expertise of personnel rather than hardware products in order to gain market dominance. This enabled IBM to develop a new company culture that is more focuses on the marketplace and notably on their customers. Gerstner centralized the company by reversing IBM’s initial plans to break its business units to separate companies. This maintained IBM’s advantage as a company that could provide ‘integrated’ solutions that bundle and customize solution of hardware, software and services in order to equip their customers, who are their main focus, with the best solutions. The transformation of the company worked and IBM was able to turn around their poor financial performance and returned to profitability in 1994.

2. Louis Gerstner, he to create a competitive strategy that emphasizes on speed, customers, teamwork and execution. The competitive strategy also involved shedding their commodity business and focusing on high profit-margin opportunities. IBM moved away from their current innovations strategy in towards being more operational effective and customer orientated. Because IBM was in a rut when Gerstner took over it, I believe that he initially had to use an Autocratic Management Style to implement his strategy on IBM. An autocratic management style there was minimum input from employees in the decision making process, as a result, the decisions made reflected on the personality of the CEO. This...

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