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
Apple Inc, best known as Apple is an American based global company that designs and sells electronics, PCs and computer software. The company was established in 1976 by Steve Jobs and Steve Wozniak and was incorporated in 1977. Some of the Apple’s best-known products are the Macintosh range of personal computers, iPod, iPhone, and iPad. By 2012, Apple reported to have more than 300 retail stores located in more than 10 countries in the world and more than 60, 000 employees on permanent employment, and about 2,800 on temporal employment. Despite the success the company, Apple has faced hard competition from other electronics manufacturing companies. The objective of this paper is to develop a strategic plan that will enable Apple improve its position in the personal computer industry. The paper will use Michael Porter’s forces; key success factors, SWOT analysis and the competitive strength to point out specific, workable recommendations that will allow Apple stay afloat and improve its position in the personal computer industry (Gamble & Marino 2012).
Microsoft and IBM formed an alliance in the early 1980’s, creating and evolving much of the world’s outlook of PC’s. In the beginning of the companies came together developed and release the first product, MS-DOS, in December of 1981. Even though the partnership dominated the computing industry through the 1980 and 1990’s, the Microsoft employees where feeling unenthusiastic with IBM, they had been quoted saying the companies operation felt too slow moving (Dvorak 2002). Even in the early years of the alliance it was obvious that the relationship between the two companies was strained.
Brand positioning is essential to the success of any firm because it delivers a perception into the consumer’s minds which differentiates them from their competitors. Microsoft began to grow their brand over 20 years ago with Bill Gate’s an underlying vision of “a computer on every desk and in every home”. This resulted in Microsoft developing into a huge multinational company with personal computing at the forefront of their business. Microsoft dominated this industry for many years which is reflected in the high brand recognition of Microsoft products worldwide.
In order to evaluate the positioning of Best Buy in the consumer electronics retail industry, we will first need to identify some key terms. Strategic positioning, as per Michael Porter’s article, “What
IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace.
This was what most Malaysian feels and perceived IBM during the late 80’s that had brought Ini Barang Mahal connotations.
* In 1985, Compaq and IBM do a research and development (R&D) and make move Apple into the mainstream by becoming low-cost producer and joint venture with IBM. This’s one of Apple failure moment and Apple Gross margin drop to 34%.
• Open Architecture : OS – Microsoft, Microprocessor – Intel , reason, to encourage application developers and enhance Peripheral market
First, Apple introduced a new OS in 2001. Second, Apple shifted to Intel chips and by the following year all Macintosh line ran on Intel making laptops run faster for less power. The third strategy was the development of proprietary set of applications. The fourth strategy in becoming the “digital hub” was to come up with a new distribution strategy: the Apple retail store, where customers can have a direct use and experience of Apple’s product and software.
Obviously, in one perspective the initial primary objective of IBM’s advertising is to RECAPTURED the brand equity to increase its diminishing market share. Plunging from one of the market leader during 70’s and 80’s to almost a market looser in the 90’s, IBM’s rebranding aims at the value proposition in the mind of the consumers. Defeated by the slicker and responsive rivals such as Microsoft, Dell and Oracle, IBM had to push the awake call alert to reposition itself as one of the significant player in the industry. This all been done through the ingenious and new paradigm of
IBM a Fortune 500 company celebrated its 100th birthday this past June. IBM employs over 400,000 employees and is considered to be a $100 billion dollar or more giant in e-business global marketing technology. With the inception of the computer, IBM’s core business was mainframe computers, which almost bought the company to its knees in bankruptcy. IBM looked at the PC as just a gadget and with any gadget over time would fade into oblivion. IBM would find out the hard way that the PC would rapidly transform the world into the
There is a multitude of reasons as to why an organization may change their culture. Some catalysts to cultural change could be such things as changes in the economy, external events, internal shortcomings, restructuring of leadership, or growth of technological capabilities. Since IBM was founded in 1911, it has undergone a multitude of cultural changes driven by each one of these factors. The 1990’s included a large cultural shift for this organization driven by a new CEO and new technological capabilities.
IBM has weaknesses in the transformation of its business model. It is lack of flexibility in the transition because of its large company
This report will explain how Intel has developed a mechanism to align its branding and marketing strategy with those of clients in the home and office market computing sector. Intel’s use of an integrated co-branding
In comparison with the loss of 4 billion in 1992, what Gertsner did was amazing. He coped with IBM problems by solving the most severe to the less one. At that time, problems of products and customers was the most serious which cost IBM billion dollars in loss. Gernstner focused on getting cost out as quickly as possible and ‘clean sheet’ the process and redesign it for global use.