Ibm 's Decade Of Transformation Essay

1449 Words Jun 25th, 2015 6 Pages
Sean Li
Professor Fraser
MGMT 515
Case Write-up #1
October 30, 2014

Case 3 - IBM 's Decade of Transformation: Turnaround to Growth
1. What factors led to IBM’s success during the 1960s and 1970s and its problems during the late 1980s and early 1990s.
IBM’s strategic positioning led to the company’s success in the 1960s and 1970s. Applegate defines four key factors of strategic positioning; product positioning, market positioning, business network positioning, and boundary positioning (Applegate, p.44). During this period, IBM’s primary product positioning was the S/360 mainframe computers. The S/360 systems were the first of its kind in the industry and were designed to suit the needs of their customers (Applegate p.6). IBM’s product positioning led to huge success in the company’s market positioning because IBM offered products that customized solutions to a range of business problems. The company hired key account sales person who reached out and successfully sold IBM products to large corporations. Revenue from mainframe computers composed of 70 to 80 percent of IBM’s profits in the 1980s (Applegate, p.8). IBM dominated the IT industry during this time by providing innovative products that competitors simply cannot match during this time period. As a result of their specialized products and expertise, IBM created barriers to entry and thereby generated sustainable competitive advantage for decades to come.

After decades of dominating the IT industry, IBM lost nearly…
Open Document