IBM's Turnaround and its New Business Model

IBM's Turnaround and its New Business Model
Case Code: BSTR107
Case Length: 22 Pages
Period: 1993 - 2004
Pub Date: 2004
Teaching Note: Not Available
Price: Rs.500
Organization: IBM Inc.
Industry: Information Industry
Countries : USA
Themes: Turnaround Strategy
IBM's Turnaround and its New Business Model
Abstract Case Intro 1 Case Intro 2 Excerpts

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.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the need to continuously reinvent the business model of a company amidst rising competition and changes in the business environment
  • Examine the strategic measures taken by a leader to turnaround a loss making company
  • Study IBM's business segments and conduct a BCG analysis

Contents

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

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