Ibm turnaround case study analysis

Ibm case study ppt

He can either delegate the task to subordinates whose sole job is to interface with customers, or make customer satisfaction part of his own role in the company. Which of the eight steps described in Kotter's article were followed in this case? The belief that a long term relationship with the client was the only aspect needed for selling and marketing, had led to a certain loss of potential revenue and profitability for a strong player lie IBM which had earlier enjoyed a monopoly in terms of its client relationships. IBM had enjoyed a strong competitive position in the s and s as a world lead in technology but now with more intense industry rivalry and a greater threat of substitutes, a new approach to managing the internal and external environment was needed. This also helped IBM to cut its losses in application software business, free up its resources and spend more time in focusing what customers want. The main reason behind this was that the IBM head in European region intercepted his e-mails. Change the fundamental economic model — This strategy started by comparing expense-to-revenue of IBM with its competitors. The events of the early s simply show how a specific change in internal values can deeply affect the profitability and revenue generation of a company, specifying how important the internal aspects are to the external image of a company. Structure The next major issue was keeping IBM intact as a single entity. Each client should have a dedicated support person as a customer representative, but the customer representative should be an overseer and coordinator, responsible for bringing the appropriate product salespeople to the client and for tracking the status of orders and other processes. Lou Gerstner observed that there was a great amount of jealousy among employees, each employee fiercely protecting his own privileges. Its core business in mainframes has died as a serious computing arena, and IBM is organizationally unsuited to compete in the PC market. This is just a sample partial case solution. Gerstner realized that a difficult, painful and massive re-engineering effort was required to get IBM to dedicate resources in bringing value to the customer in the competitive marketplace. Another important feature that figured on the employee list of IBM was the dress code at work.

IBM shifted its focus towards selling optimized solutions rather than just products alone. This stands in contrast to the current system where customer representatives are responsible for acquiring enough domain knowledge on anything to sell it to their client, and nobody is responsible for process management.

Gerstner addressed to resolve these problems by fostering more collaboration among teams and employees. Before Gerstner joined, IBM had a tendency to use data and indices subjective product milestones and customer satisfaction numbersbut Gerstner changed all these processes of measurements.

ibms decade of transformation: turnaround to growth slideshare

The threat of new entrants had obviously increased especially as these companies were now introducing user friendly interfaces and were encouraging other entrants from coming into the market to enjoy the new era of emerging technology.

He had laid a vision on what should be the focus areas for the company in the future. Gerstner viewed the dress code at work as a severe cultural problem that the IBM employee faced.

Ibm turnaround case study analysis

When Gerstner came on board, the conventional advice and wisdom, from both IBM followers and industry experts as well as most of the IBM executives, was that the only way IBM could be saved from eventual bankruptcy and massive disaster was to break IBM apart into smaller companies.

Gerstner basis for building IBM Global services was that an integrator, acting in a service role, and this integrator controls every other major industry. Gerstner was instrumental in shifting the mental model of employees from self-centric to customer-centric. John Akers and his executive team planned a recovery for the company, involving a breakup into 16 child corporations.

Another of the Gerstner insight was that every big industry is built around open standards. Change the fundamental economic model — This strategy started by comparing expense-to-revenue of IBM with its competitors. Gerstner immediately confronted him and made him aware that employees were not his personal property, they belonged to IBM. Gerstner addressed to resolve these problems by fostering more collaboration among teams and employees. And whether he breaks up IBM or keeps it whole, Gerstner must decide which employees to keep and which to fire, and how to do it. The management was planning to break the organization into individual businesses. Re-engineer how business was done — Gerstner saw that the IBM processes were cumbersome, highly expensive as well as redundant. Please place the order on the website to order your own originally done case solution. Lou Gerstner initiated the on-demand concept or solution offering. The threat of new entrants had obviously increased especially as these companies were now introducing user friendly interfaces and were encouraging other entrants from coming into the market to enjoy the new era of emerging technology. Gerstner recommended a price-reduction plan for its customer, which he thought was most essential way to remain competitive in the mainframe market. He tried to fix IBM without actively firing a man, and maintained management traditions focused around committees and agreement.
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