The Case of IBM - Assignment Example

Section/# The Case of IBM What competencies has IBM had to invest in order to change from a product centric to a service centric industry? As described in the case, this transformational process hinged upon the ability of the firm to seek out and define what core components of the firm could continue to integrate with the business needs of the new focus and which needed to be cast aside. Moreover, 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. Finally, the firm invested heavily in defining core units of IBM to speak to specialized needs rather than generally seeking to promote consumer satisfaction via the old process that had previously experienced such a great degree of success. Finally, it must be noted that the firm realized that it must invest in a CEO that came from outside the company; something that had not been engaged since the firm was founded in 1911. 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. What are the implications of the globally integrated enterprise model for marketing managers in Australia and New Zealand subsidiary of IBM? This approach helped to decentralize the decision making process that was engaged in the nations and markets of New Zealand and Australia. Ultimately, although a somewhat dangerous maneuver, this helped to allow a degree of self-determination with respect the best way to integrate with consumer demands and needs within these markets. By allowing such a process to move forward, IBM made a risky gamble that ultimately paid off many times over. By relying on subject matter expects and oversight within these given markets rather than a centralized command and control within IBM headquarters profits from such markets soon rose precipitously and allowed the firm the wherewithal to continue with the bold changes that defined the decade of the 1990’s and the subsequent rebirth and renewed profitability of the firm (Stover, 2005). Discuss the elements of the marketing strategy that makes IBM successful in today’s global marketplace These strategies have been briefly touched upon within the preceding 3 answers that this study has touched upon. However, the most important strategy which was mentioned, in the mind of this analyst, is the level to which Gerstner chose to remove all other consideratinos from the table and focus soley upon integrating directly with consumer needs and market demands; rather than focusing upon the old tried and true products that had built IBM into such a formidable business entity. Moreover, by realizing that not all markets within such a multinational business approach operated within the same manner, the firm was able to integrate with the core components of these shareholders and potential customer in a much more streamlined and effective manner. Highlight some of the challenges that IBM will face in the future and suggest how it shold respond to these challenges The first challenge that comes to mind is the fact that many other production centric information technology firms that have lived a long and profitable life will soon seek to transition in the IBM approach as a means of keeping their firms viable and profitable; these include but are not limited to: Sony, Samsung, Apple, and a range of others. As a means of staving off these highly lucrative and capitalized firms, IBM must continue to maintain a high level of competition and customer satisfaction to ensure further profitability. A further threat than can easily be realized is the uneven economic footing that many of IBMs custmomers now find themselves within; for instance many of their oldest customers within Europe are now waking up each and every day with great unknowns concerning the future of the Euro or the viability that their company will have within the context of the pervasive economic crisis. By continuing to differentiate customer bases and invest in various regions throughout the world, this risk can be minimized; however, it can never be fully countered. An additional threat that underlies the business model that IBM has currently chosen is with regards to the level of services that it offers. As a very function of the service oriented economy, it must be understood by the firm that in order to stay ahead of this type of market, it is necessary to reassess and reconsider each and every one of the services offered multiple times per year and per quarter. Such a level of self analysis will assist the firm to begin discontinuing certain services while picking up certain new services as a means of providing the maximum utilility for their customers. However, any type of stasis or satisfaction with the status quo will land IBM in very much the same hot waters that ultimately led to the necessity to reorganize in the first place. Reference Stover, S, & Moreau, D 2005, 'From big bust to Big Blue: IBM and its vigorous rebirth', Kiplinger's Personal Finance Magazine, 49, 7, p. 34, Academic Search Complete, EBSCOhost, viewed 3 April 2013. Read More