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International Business Machines (IBM) - Turnaround to Growth

 

            At the beginning of the 1990's, International Business Machines (IBM), was on track to success falling in as the second-most-profitable company in the world. Soon after the end of the fourth quarter of 1990, IBM began its descent as the company's internal structure started crumbling out from underneath it. By 1993 IBM's CEO John Akers was relieved of his duty, and was replaced by Lou Gerstner. Gerstner was the first outsider CEO in the history of IBM, which gave the insiders an uneasy feeling that the company was soon to be split apart and sold (Applegate, Austin, Soule, Soule, and Soule). Once taking charge Gerstner soon realized that IBM's value was not in pieces, so he remapped his direction and began his attempt at saving the company. Many things contributed to the rebuilding of IBM, which first started with the loss of John Akers as CEO and the take over by Lou Gerstner. At which point Mr. Gerstner revamped the business strategies by ensuring that the customer's needs would come first before anything else. He did this by meeting with many of the customers, analyst, and industry experts in person, as well as assigning his senior executives to groups of customers. In this Gerstner would hold the executives personally responsible for their accounts, and any problems that may occur throughout business transactions (Applegate, Austin, Soule, Soule, and Soule). Throughout this, Gerstner also brought IBM to the market as One IBM to signify that this is not the same company as before. This was done in attempts to prevent customers from leaving before his turnaround could take place. Ensuring that the current customers IBM held continued to do business with them was one of the major keys to IBM's turnaround. Without maintaining their customer business, IBM would be starting from scratch. .
             To continue in making IBM as successful as it once was, Gerstner hired Jerry York and placed him in charge of getting IBM's costs under control.


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