Strategic Marketing

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IBM|
STRATEGIC MARKETING 310|
CASE STUDY ANAYLYSIS 1

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1. What competences has IBM had to invest in arising from its transformation from a ‘product-centric’ to a ‘service-centric’ organization?

From IBM’s largest loss in 1992 the board of directors responded by appointing Louise V. Gerstner as their new CEO to bring the company’s reputation up and minimize their profit loss. When Gerstner took over IBM from a product-centric organization he transformed IBM to a service-centric organization. This is because he had brought with him a consumer-oriented sensibility and the strategic thinking capability that he had gathered through his previous company as a management consultant. Moreover, the course of action took over by him drawing focus, speed, customers, teamwork and execution. He carried his actions by standardising global core processes, centralising the company to leverage its strengths as a provider of solutions to consumers, fixing the core businesses, redesigning the metrics and reward systems of employees and relentlessly driving the culture towards an intense focus on the marketplace.

2. How would you describe Louis Gerstner’s implementation style of IBM’S competitive strategy in the early 1990’s?

To describe Louis Gerstner’s style of implementation he focused on a competitive strategy that shed commodity businesses and moved towards high profit margin opportunities. He also streamlined its advertising into one agency and as a result there was a consistent message delivered to the marketplace. The changes and implementation competitive strategy that was made by Gerstner’s clearly was an effective and efficient plan of action for IBM. To add, the result to Gerstner’s competitive strategy led IBM to regained its financial position and its industry leadership position in the marketplace as well as IBM remaining aggressive in communicating to the industry that it had learn from its past near death experiences and with that...
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