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Case Title:

IBM’s ‘On –Demand’ Strategy : The Strategic Rationale

Publication Year : 2008

Authors: heeja.S, Lekha Ravi

Industry: IT Industry

Region:US

Case Code: GRS0195C

Teaching Note: Available

Structured Assignment: Available

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Abstract:
IBM is the world's largest provider of information technology and consulting services. The company combined, operates both business and IT services, which comprises of the following three categories – business value, infrastructure value and component value. Since 1992, IBM had struggled through some difficult years as it had failed to sustain the pace of innovation in personal computers. By 1993, IBM was on the verge of bankruptcy due to huge debt burden. The appointment of Louis Gerstner in the same year saw IBM’s turnaround into one of the leading ‘IT-services’ provider in the world – second only to Microsoft. It emerged with a renewed focus on customer value. After Louis Gerstner’s handing over of the mantle to Samuel J. Palmisano (Palmisano) in 2002, IBM continued to successfully serve from its service platform. For the same, in 2007, IBM implemented it’s ‘On- Demand Strategy’ successfully and used it as a strategic rationale in their business services and IT industries. Palmisano’s new business agenda for IBM was shifting to the service platform and a strategic alignment of its products and services. Analysts inquire if he would steer IBM’s succeess amidst tough competition.

Pedagogical Objectives:

    * To study the growth strategies of a technology firm
  • To understand the applications of On- Demand strategy in the IT business
  • To discuss Louis Gerstner’s turnaround initiatives for IBM
  • To evaluate whether IBM’s strategic shift from software to service platform would help retain IBM’s leadership amidst competition from Microsoft, Hewlett-Packard, Dell and other IT-related companies
  • To evaluate if Palmisano’s strategies of combining both product and services would increase the customer potential in the long run.

Keywords : Boston Beer Company; Sam Adams; C Jim Koch; Craft beer; Craft beer segment in the US; Imported beer; Beers in the US; Repositioning; Growth Strategies Case Study; Light beer; Strong beer; Promotion strategies; Advertisements; Competitors; Heineken; Corona

Contents : 
International Business Machine – A Brief
IBM: When Louis Gerstner Took Over
Palmisano’s Business Agenda
Revenue Share of IBM’s Business Segments
IBM’s Growth Platform – Issues and Prospects
Companies Acquired by IBM Global Software Division

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