Abstract

The turnaround of IBM under Louis V. Gerstner's leadership is considered to be one of the most remarkable turnarounds in corporate history. The case details the strategic measures taken by Gerstner to transform IBM from a hardware vendor to a complete IT solutions provider. The case examines IBM's new 'services-heavy' business model and its potential benefits for the company in future. It also details the issues facing the new CEO of IBM - Sam Palmisano and the measures taken by him in 2002 and 2003 to boost IBM's stagnant revenues and declining profits.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Strategic measures taken by a leader to turnaround a loss making company.

Keywords

IBM, Turnaround of IBM, IT services, Sam Palmisano, IBM's business segments, PriceWaterhouseCoopers, Human resource restructuring, Louis V Gerstner, IBM's e-business strategy, Business environment