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IBM's Turnaround and its New Business Model |
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EXCERPTS Contd...Customer-Centric E-Business StrategyIn 1997, IBM's network centered computing strategy evolved into a full-fledged e-business strategy. The e-business strategy sought to leverage on IBM's strengths in big servers, huge storage capability, bullet-proof databases, massive processing power and expert systems integration. IBM provided the complete package for e-business i.e. hardware, software, training, security, networking and services. Issues That Remain to be SolvedA few critics said that IBM's turnaround was more of hype created by the company. They said that a part of the company's increase in revenues was because of a controversial switch in the IBM's pension plan. Moreover, some observers argued that there was a clear sign that IBM's share price had been fueled by stock buybacks and not by strong earnings. Challenges for the New CEOOn March 01, 2002, Palmisano became the eighth CEO of IBM. Though he took-over the company in a much better financial condition compared to Gerstner, several challenges lay ahead for him. The IT industry was facing a tough time due to the economic slowdown that had reduced corporate spending on IT products & services drastically. Analysts pointed out that though Palmisano had a three decades working experience in IBM, he was perceived as more of an operations expert rather than a strategic thinker like Gerstner...
Exhibits
Exhibit I: IBM's Consolidated Statement of Earnings |
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