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Growth Strategies Case Study

Case Title:

IBM’s Software Division: The New Reliable Growth Engine?

Publication Year : 2006

Authors: Vamseedhar, Sumit Kumar Chaudhuri

Industry: Consulting


Case Code: GRS0090

Teaching Note: Available

Structured Assignment: Available

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IBM pioneered the global IT industry and dominated the mainframe and minicomputer market since the mid-20th century. However, with the global IT industry undergoing a paradigm shift from hardware to software, IBM faced a slumpcline in the 1980s. Under the visionary leadership of its erstwhile CEO Louis Gerstner, IBM regained its past glory by revamping its organisation structure and shifting its focus to software and services. Despite the increased contribution of IBM’s Global Software Division to its total revenue, as the IT industry worldwide faces a period of transition due to the emergence of services industry and emphasis on customised services and custom care solutions, analysts are sceptical whether IBM’s software business alone can become it's most dependable growth engine.

Pedagogical Objectives:

  • To analyse the role of software and services in the Global Information Technology Industry
  • To understand the traditional business model of IBM and discuss its transformation from being a hardware manufacturer to one of the leading provider of software services in the world
  • To debate whether IBM’s Global Software Division can become the driving force behind IBM in the long run.

Keywords : IBM’s Turnaround Middleware Market; e-business on-Demand; IBM’s New Growth Platforms; Competitive Strategies Case Study; On-Demand Computing; Open Software Strategy; Autonomic Computing; IBM’s purchase of PwC; IBM’s Business Transformation Outsourcing; IBM’s Acquisitions

Contents : 
IBM’s Business Model and Product Profile
IBM’s Innovations
IBM: Who Says Elephants Cannot Dance?
Revenue Share of IBM Business Segments
IBM’s New Growth Platforms
IBM’s Software Division: The New Growth Engine?

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