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INFORMATION TECHNOLOGY: Case Discussion. Dell Computer IBM. Dell & IBM… The Dynamics of the Computer Industry. It is 1994 and you are a member of IBM’s BOD. Your company’s stock price is about $27 per share (1967 levels):
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INFORMATION TECHNOLOGY:Case Discussion Dell Computer IBM
Dell & IBM…The Dynamics of the Computer Industry • It is 1994 and you are a member of IBM’s BOD. Your company’s stock price is about $27 per share (1967 levels): • What are the competitive forces confronting IBM and to what extent were these predictable? • What factors contributed to IBM’s loss of market share from 46% to less than 10% of the PC market? • You have fired Akers as a CEO; why do you hire Lou? • It is 2000 and you are still on the BOD of IBM. You note the following: • What major conclusions can you reach regarding the above performance (what do these performance measures indicate)? • LG has made a presentation and shown you the barbell; what is your impression of his synopsis of the market? • Where are the profit margins for each sector heading? • Where should IBM’s strategy lead it and why?
Dell & IBM…The Dynamics of the Computer Industry • What are Dell’s sources of competitive advantage over IBM, Compaq and Gateway? • To what extent are these sources truly differentiating? • To what extent are these sources sustainable and for how long? • Traditionally, what was IBM’s main strategy for competing? • If you were invited to meet Michael Dell, what would you tell him the near-term (3-year period) holds: • What are or could be the new sources of competitive advantage? • What is the extent and impact of competitive threats coming from Compaq, Gateway or HP? • What should Dell do? • Thinking about IBM’s strategic position and performance from 1994 to-date, can you think of any other companies that have confronted similar circumstances and were successful at renewal? • Which companies? • How are they similar? • What did the other companies do? • Thinking about Dell, where is it in its evolutionary cycle as a leader, and can it continue to be a leader? What must Dell do to retain its leadership position? • If you were LG, How would you assess the acquisition of DEC by Compaq? • To what extent, do you believe, Compaq represents a threat? • How viable is Compaq’s strategy and why?