IBM CORPORATION TURNAROUND

 Foundedin 1991 as the Computing-Tabulating-

Recording company.

 Thomas J Watson joined the company and

instituted symbols and practices expressed in
slogan “Think” and led the company through
almost 40yrs of success.

 Company produced a series of innovation in

automatic calculation and info. storage including
FORTRAN
 1991: Inception

 1924: Company adopted its present name.

 1914-1951: Presided by Thomas J Watson

successfully.

 1952: Leadership passed on to Thomas Watson Jr.

 1960: Became target of an anti-trust action by US

justice department.

 1970: 20 unsuccessful anti-trust actions filed.

 1980: Became the model US company with revenue

generation of $3.5 million.
 1981: Introduced PC

 1984-1989: Expansion in volume purchases by 74%

IBM captured 70% of worldwide information industry
profits.

 1990: Emergence of internet and Worldwide web.

 1991-1992: Launched mainframe. Costs surged

heights and customers complained about quality.

 1993-1994: 8 principles of IBM defined by Louis V

Gerstner. Concept of ONE IBM introduced.

 1995: Network-centric computing launched.

Mainframe rescued and re-launched.
The costs were difficult to keep up with during the
1990s therefore cost reduction strategies were
implemented by John Akers:

 Employee perks were cut.

A $3.7 billion restructuring charge was posted.

 Personnelreductions in the mainframe business

through voluntary and involuntary retirements.

 Stepsto break up of the company began in order

to avoid distraction from core business functions.
IBM became a customer-centric company again in the
leadership of Louis Gerstner. More emphasis laid on
maintaining relationship with customers.

 Sales organisation was split into two parts: Customer

relationship managers and Product specialists

 The concept of ONE IBM for providing integrating

software solutions globally.

 More involuntary retirements with less generosity

implemented. Mainframe rescued and re-launched.

 DIVESTMENT strategy- Jerry York was hired to lead

the cost-cutting charge. He sold off some non-core
businesses including Federal systems company for
$1.58 billion.