Essay about Fall of Ibm

1683 Words Sep 23rd, 2013 7 Pages
Title: The Fall of IBM Date: September 20, 2013

I. Executive Summary

The purpose of this case study analysis is to analyze the situation of IBM in the 1990s, to come up with possible mutually exclusive alternatives for IBM’s management and ultimately, to recommend a possible strategy to regain back IBM’s throne in the industry.

The problem of the case study is all about the survival of IBM in a much more competitive market ever encountered by the company. And also, overcoming new challenges brought about IBM’s new management and the dynamic technological environment.

The methods of analysis used for this case study are the Porter’s Five Forces Model and the ANSOFF matrix analysis. Brief explanations were provided in
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Method of Analysis A. Porter’s Five Forces Model

* Threat of New Entrants: LOW

Technology plays a big role in the computer industry that IBM belongs. And because of the rapid growth of technology, costs accompanying such growth are continually increasing. The threat of new entrants is low because of several factors. One factor is the cost of research and development which is enormous. Adapting to the latest technology to survive the industry is also costly. Building and maintenance of plants is seriously expensive. Plus, the customer service and support activities needed as reinforcement for the products were also costly.

* Bargaining Power of Suppliers: MEDIUM

It was explicitly stated in the case that IBM outsourced and bought the inputs it needed from other companies to make its PC. Intel, for examples, supplied the microchip that was the heart of personal computers and Microsoft delivered the programming language and software applications for the new IBM machine. Thus, power of suppliers is assessed to be high on major suppliers.

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