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What happened to IBM in 1990s?
The late 1980s and early 1990s were difficult for IBM – losses in 1993 exceeded $8 billion – as the mainframe giant failed to adjust quickly enough to the personal computer revolution. Desktop machines had the power needed and were vastly easier for both users and managers than multi-million-dollar mainframes.
How did Lou Gerstner turn around IBM in the 1990s?
In the early ’90s financial position of IBM was precarious. Gerstner repositioned corporate strategy of IBM to keep IBM together and pulled off a successful turnaround for IBM. Gerstner delivered results for IBM. Many insiders and Industry experts criticized IBM for selecting a CEO with non-technology background.
How did IBM turn their business around?
They abandoned the manufacturing of computers and shifted their focus to software and services. NOVELL, a small company was initially launched along the lines of vertical industry. They built their own network hardware and software.
What strategy changes did Gerstner use to solve IBM’s situation?
Under Gerstner, IBM’s new strategy was to use processes and culture to regain advantage. Moving from proprietary standards to open standards, for example, was important to IBM’s new strategy, and the ramifications for processes and culture were enormous.
What factors made IBM successful?
However, IBM’s success was also the result of a devoted labor base and progressive corporate culture well ahead of its time. Fostered by the late chairman and CEO Thomas J. Watson, Sr., this culture emphasized a “family” atmosphere at IBM with Watson as father figure and provider for his employees.
How did Gerstner save IBM?
Gerstner was looking for an exit from RJR Nabisco , where he was chairman and chief executive. After months of courting, Gerstner took over as chairman and CEO of IBM on April Fools’ Day of 1993. Under his guidance, IBM cut billions in expenses (partly through massive layoffs) and raised cash by selling assets.
What was the status of IBM before Lew Gerstner became CEO?
Gerstner served for four years as chairman and chief executive officer of RJR Nabisco, Inc. This was preceded by an 11-year career at American Express Company, where he was president of the parent company and chairman and CEO of its largest subsidiary, American Express Travel Related Services Company.
Why do you think being market driven made a difference for IBM as their turnaround in compensation?
New Product Development Identifying new needs or new ways of filling them and developing a new process or product that accomplishes this aim are the goal of this growth strategy. NPD requires investment in research and development, usually over the long term, and extensive trial and error.