Team Strategy Case Analysismatching Dell: Ibm
Team Strategy Case Analysis
MATCHING DELL: IBM
Strategic Management
Group IBM:
Content
1. Introduction & Task
2. Analysis of IBM's strategic situation (Business System Analysis)
3. Suggestions of potential strategic moves (PARTS Analysis)
4. Assessment of prospects of success for potential moves
5. Final strategic recommendation
1. Introduction & Task
Introduction
IBM used to dominate the computer market. Fully integrated and being the only true competitor to DEC, the company was the first to enter the mainframe computer business in the 1960s. For three decades, IBM and DEC dominated this market and earned a lot of money there.
By the end of the 1970s, a number of competitors (Apple, HP etc.) entered the market offering integrated, pre-assembled personal computers. When IBM launched its first PC in 1981 it held 42% market share and still dominated the industry.
In 1985, IBM first started to struggle with its earnings. Unfortunately, this trend continued until 1993 when the appointed CEO John Akers was forced to finally resign after raking up a record annual loss of $8 billion. But still there was no end to the downward trend of IBM's mainframe division which was to further continue even though the personal computer industry began to boom.
The question arose: How could a company that was fully integrated, that carried high manufacturing cost using traditional operations methods and that used an enormous sales force to sell its computers to large corporate accounts, compete with the slick, new-age, lean-and-mean competition, such as Dell? Was there a space where IBM could still earn money in the PC-world? Where and how were they supposed to compete?
Task
In the light of Dell's success, as documented in the Harvard...
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