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The Case of IBM.
The firm realized that it must discontinue its dogged approach to further invention and must refocus its expertise on business services and forcing key changes in the firm’s competitive marketing strategy to seek to integrate these services with the new customers that were available within the system…
Description of Louis Gerstner’s implementation style of IBM’s competitive strategy in the early 1990s.
The implementation strategy was something of a giant gamble. What Gerstner ultimately attempted to do was to take a failing and unprofitable firm and completely redefine the way in which it marketed itself and integrated with the needs of the consumer/market. As a function of this, he not only drastically reduced the workforce of the multi-national firm, he also resisted the urge to break IBM into smaller companies that would focus on individual market needs; rather, he decided that the strength within the IBM brand name and recognition could help the sum of the components to achieve a higher level of net worth and growth as a single entity. In this way, the business concept of synergy is aptly portrayed. With regards to the competitive strategy, Gerstner reviewed the market and saw that IBM was already far behind the curve with relation to the development and invention of new business products, PCs, printers, memory devices etc. Rather than attempting to expend huge amounts of capital, much of which had already been lost as a result of several years of severe losses, Gerstner saw the better approach would be to focus upon an area of the market whose potential had yet to be fully tapped; i.e. business and consumer services.
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