Case Study 1 Essay

Words: 3265
Pages: 14

* Given name | * Lawrence | * Surname | * Lau | * Student number | * 16012143 | * Email | * | * Unit name | * Strategic Marketing 310 | * Unit code | * 3900 | * Assignment title | * Case Study One | * Date submitted | * 8th of April 2013 | * | * | * | * | * Marker’s comments | * | * Recorded mark | * | * Marker | * | * Comments | * |

Question 1. What competences has IBM had to invest in arising from its transformation from a ‘product-centric’ to a ‘service-centric’ organization?
To adapt to the fast changing pace of business, IBM CEO Louis Gerstner took the
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et all, 2012). Louis immediately redirect IBM target market from business to consumer market to business to business market where their true strength of IBM can be utilized as competitive superiority will be based on knowledge, experience and expertise of personnel instead of technical quality of its product (Jain,S.C. et all, 2012). Therefore, this change of strategy has led IBM to exit the consumer market which are the network hardware business, storage and personal computers and enter into service and software businesses (Jain,S.C. et all, 2012). To reconnect IBM with their customers, Louis sets out to make changes to how the company operates. He emphasized that the company to focus on speed, customers, teamwork and execution (Jain,S.C. et all, 2012). To achieve these objectives, he standardized the global core processes and centralizing the company to utilize its strength as a provider of solutions to customers (Jain,S.C. et all, 2012). Besides that, he also made changes to the corporate culture to become more of customer oriented. Louis redesigns the metrics and reward systems of employees so that they will now start to treat customer better (Jain,S.C. et all, 2012). IBM has become a bloated company due to the excessive number of employees they have which is approximately 400,000 (Jain,S.C. et all, 2012). This has greatly increase IBM cost in the long run. In year 1994, Louis eliminates this problem by shrinking the workforce to 220,000