IBM: Inferior Products, Better Marketing

Topics: IBM, Personal computer, Mainframe computer Pages: 3 (895 words) Published: August 21, 2010
Week 2 - DQ1

For a time, people would joke that IBM was an acronym for ‘Inferior But Marketable’. The thinking behind this was that IBM produced inferior products, but did a better job of marketing them than competitor companies that produced superior IT products. What was IBM doing from a competitive capabilities perspective? Consider factors such as brand and core competencies in your answer. Which of these factors may have played a role in earning the company its nickname mentioned above?

Please limit your discussion to the 1980–1993 period.

Brief History
IBM or otherwise known as International Business Machines Corporation also called Big Blue (because it is their corporate color) is one of the very early information technology companies, which started way back to the 19th century under Thomas J. Watson, Sr. Wikipedia states that it is the second most important global brand. IBM dominated the market and at the start of 1980, they introduced a lot of technology, most specifically the Reduced Instruction Set Computer (RISC), which is the basis of most workstations. (IBM, IBM Archives…) It is because of Tom Watson, Jr., who succeeded his father and became CEO in 1956 that the beginning of the turnaround of IBM and the world into the digital computer age be credited to him.

IBM = Inferior But Marketable?
Conclusions on how the acronym came to be:
Inferior But Marketable probably may have come about by the time when Louis Gerstner became CEO of IBM. According to Gerstner (2002, p107), “You could make fun of IBM all you liked. (Our competitors certainly did.)” Such moniker may have also been due to the fact that they have banked on the influence they have built through their mainframes to promote their product without giving much attention to quality and pricing. It is IBM’s failure to keep up with innovations has paved the way for companies such as Microsoft, who is now dominating the software industry and HP or Hewlett Packard, who is one of...
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