IBM Case Studies

Essay by VijayMalhotraaUniversity, Master'sA+, August 2006

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Historical Development

Key Significant Areas

* Herman Hollerith invented tabulating machine at the end of 19th century

* In 1911, Charles Flint acquired Hollerith's Tabulating Machine Company

* Thomas J. Watson Sr. becomes GM of IBM predecessor, Computing-Tabulating-Recording-Company

* In 1915, Watson Became President of CTR

- Devoted most its resources to developing the tabulator side of the business

- Established the "100 percent club" to reward his best salespeople

- Virtually all big insurance companies, railroads, and government agencies were using CTR's tabulators

* 1924 - Watson became chairman of CTR and renamed the company International Business Machines (IBM)

* 1939 - IBM was the biggest and most powerful business machine company in the United States

- IBM owned 80 percent of the keypunches, sorters, and accounting machines used for tabulating purposes

- Minor competitors had disappeared because of not being able to match IBM's strengths in sales and R&D

* By the end of the 1950's, IBM had a 75 percent market share

* In 1964, The System/360 mainframe computer was launched

- The project was an immense success and put IBM way ahead of its competitors

- IBM dominated the computer industry due to technical superiority and the reputation for quality service

Industry Trends (Close Competitive Arena)

* High Rivalry among the industry leaders

* Market leaders are sustaining strong competitive advantage

* Industry is highly consolidated

* IBM's cost disadvantage compared with companies like Dell, Hitachi, and Samsung, which specialize in manufacturing low-cost computer components, increased dramatically

* Rapid changes are occurring in industry due to:

- Major hi-tech advancements in hardware and operating systems

- Move from selling individual products and services to an integrated system for any market segment

- Industry consolidation through acquisitions

Core Business

In the early years,