IBM Harvard Case Solution & Analysis


  • Thomas J. Watson’s culture, structure, system and work ethics led to success.
  • Thomas J. Watson Jr focused on innovation and customers’ desires in order to make their life easy.
  • IBM PC was the most successful innovation technology of its time.
  • Status of Cultural Icon was achieved through Stanly Kubrick’s movie.
  • Sales of non-current assets cover up inefficiencies of the company.
  • IBM adopted wrong marketing strategies whereas other vendor did a better job of PC in terms of marketing than IBM.
  • Products were developed for the wrong market and mainframe was based on a mid-range market.


IBM was battling to stay in the business sector where the representatives and clients were prepared to abandon them. The organization had high cost base and was not creating enough income, and the PC division sparkling star of IBM had become dead weight. To counter this, new CFO was enlisted to cut huge cost promptly by cutting 75000 representatives and outsourcing the assembling of PC's by closing down rest of the divisions aside from the ThinkPad brand.


In this phase it is seen that Gerstner has given greater focus to strategically planning, integrating business groups and forming committee to oversee all problems and recommend solutions e.g. CEC focuses on corporate strategy and turn around and WMC focused on global tactical strategy along with operations. Formation of global sales team and implementation of CRM have focus on each customer account and a specialist in each team deal with technical problems as well.


In the shift to find high growth and the next big thing, IBM needed to maintain the low cost structure and for that the company it partnered with SAP, PeopleSoft and Siebel so that IBM would be using the same software’s internally as that of their customers. With this implementation, the turnaround was complete regarding the cost reduction. The growing Internet .........................

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