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
IBM must also focus on being able to manufacture and set up proper distribution channels which will exceed customer demand.

Alternative B: Resource Dependent (external focus on environmental considerations)

The second alternative focuses on how IBM can best affect and control the environmental uncertainty itself. IBM can choose whether to stay at their complete domain offerings or pick specific niches such as the enterprise personal computer market for which to focus and forgo the consumer market. To stay current to external needs, new technologies must be continually developed while minimizing their loss to competitors who will minimize any gain by IBM for development. Given the fiercely competitive market place, strategic alliances or joint ventures can help minimize the costs and market share gains taken from IBM developed technologies by the competition while IBM can focus on costs, differentiation and utilizing resources to respond to customer needs. In this way IBM can have a greater say in the industry and can use their size to have their competition adjust themselves. Part of the significant loss in market share and personnel came from IBM’s lack of response to the global competition and by lobbying officials it will help align the government’s industry view with those of IBM. This can prove useful in cost controls for