IBMs On Demand Business Strategy Harvard Case Solution & Analysis

In the late 1990s, IBM successfully moved up the value chain and become one of the largest business and information technology (IT) solution providers in the world. To achieve this transformation, the company made a number of strategic steps to reduce its impact on the commercialization of IT hardware production. A key success factor was the creation of IBM Global Services, and its high-margin enterprise management consulting and technology services. In addition, IBM has organized a series of strategic acquisitions, sold sick business units and external low-value manufacturing outsourcing and joint venture partners. In 2002 with the success of its business model and the introduction of a new computing architecture, IBM made a loud announcement of its new corporate strategy centered on the concept of "on demand." However, after a disappointing financial results for the first quarter of 2005, IBM's share price fell and hit the lowest level since Sam Palmisano took over as CEO in March 2002. The company announced a massive restructuring of its European operations, which will be held at the end of 2005. Although the results of the second quarter improved, some have begun to doubt "on demand" strategy will deliver the promised results. In particular, many people began to ask why and how this strategy was justified in the first place. What are the difficulties the company had a meeting in the implementation of its new corporate strategy? "Hide
by Ali Farhoomand, Samuel Tsang Source: University of Hong Kong, 30 pages. Publication Date: September 20, 2005. Prod. #: HKU424-PDF-ENG

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