IBM case study
Few companies have had such a long history of ups and downs as IBM. What were some of the keys to its recent success? Can its plan to solve some of the world’s most challenging problems succeed? Why or why not?
International Business Machines, abbreviated IBM and nicknamed "Big Blue", is a multinational computer technology and IT consulting corporation. IBM manufactures and sells computer hardware and software and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology.
IBM current businesses consist of 5 major divisions: Global Technology Services segment; a Global Business Services segment; a Software segment; Systems and Technology segment; and a Global Financing segment. IBM is a dominant innovator, with nearly 67,000 patents secured since 1993. In fact, Big Blue has been the top recipient of patents for 20 consecutive years, and in 2012 it received 6,478 new patents. IBM has been able to leverage their intellectual capital into businesses as diverse as life sciences, automotive and banking and more importantly, a constant revenue stream for the company.
After several months on the job as IBM CEO Lou Gerstner’s diagnosis of the company’s problems was clear: Costs were out of line, they had lost touch with customers, the firm was too decentralized, and they had stayed with their old strategy too long. He summarized this by saying, “We don’t move fast enough in this company. This is an industry in which success goes to the swift more than the smart. We’ve got to become more nimble, entrepreneurial, focused, cost driven.
Based on his understanding of customers’ needs, Gerstner recognized that the market was shifting. He pursues a completely different approach than the old IBM business model. These insights led to a transformation that subsequently led IBM to exit the network hardware business, application software, storage, and personal computers and to enter the services
International Business Machines, abbreviated IBM and nicknamed "Big Blue", is a multinational computer technology and IT consulting corporation. IBM manufactures and sells computer hardware and software and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology.
IBM current businesses consist of 5 major divisions: Global Technology Services segment; a Global Business Services segment; a Software segment; Systems and Technology segment; and a Global Financing segment. IBM is a dominant innovator, with nearly 67,000 patents secured since 1993. In fact, Big Blue has been the top recipient of patents for 20 consecutive years, and in 2012 it received 6,478 new patents. IBM has been able to leverage their intellectual capital into businesses as diverse as life sciences, automotive and banking and more importantly, a constant revenue stream for the company.
After several months on the job as IBM CEO Lou Gerstner’s diagnosis of the company’s problems was clear: Costs were out of line, they had lost touch with customers, the firm was too decentralized, and they had stayed with their old strategy too long. He summarized this by saying, “We don’t move fast enough in this company. This is an industry in which success goes to the swift more than the smart. We’ve got to become more nimble, entrepreneurial, focused, cost driven.
Based on his understanding of customers’ needs, Gerstner recognized that the market was shifting. He pursues a completely different approach than the old IBM business model. These insights led to a transformation that subsequently led IBM to exit the network hardware business, application software, storage, and personal computers and to enter the services