Ibm's turn arounds

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IBM’S TURNAROUND HISTORY

1980’s Business Environment Mainframes and mid-range computers (including

OS’s) were IBM’s bread and butter IBM expects to exceed $100B in revenue by the

end of the decade and begins building people and plant capacity to support that level of revenue

IBM begins to convert it’s rental business model to sales and leasing to support growth

The rise of PC’s and micro-computers re-shape the IT industry

IBM begins to struggle as the market shifts and it’s growth projections don’t pan out

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Fortune 500 Standings

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Profit margins stood at 13-14% in the first half of the decade

Fortune 500 Standings

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Profit margins had dropped below 10% by the end of the decade, revenue stands at $60B in 1989

1980’s Stock Performance

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1980’s Stock Performance

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1990’s Business Environment The PC era begins to mature

The internet and dot.com era begins The predicted death of the mainframe turns out to be

wrong IBM pays the price for it’s missteps in the 1980’s IBM plans to breakup the company into smaller

operating units IBM gets a new CEO Lou Gerstner in April 1993 IBM acquires Lotus Gerstner decides to keep the company together IBM grows it’s services business

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Fortune 500 Standings

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Profit margins dropped to between 5 and 6% in the first half of the decade

Fortune 500 Standings

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Profit margins had risen back to 8% by the end of the decade, revenue stands at $82B in 1999

1990’s Stock Performance

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2000’s Business Environment Y2K comes and goes with no issues,

services revenue slow The dot-com bubble bursts IBM acquires PWC The PC business commoditizes IBM exits the consumer PC business and

eventually sells the PC business altogether

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Fortune 500 Standings

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Profit margins close to 9% in first half of decade

Fortune 500 Standings

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Profit margins had risen back to 10% by 2007 and almost 15% by 2010..

2007: 2010:

2000’s Stock Performance

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The Dot-com Bubble

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IBM Stock During the Dot COM Bubble

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IBM’s Next Chapter

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