IBM casestudy.

The success of Dell over IBM can easily be attributed to the fact that Dell attempted to exploit a market niche which was hardly considered as future market prospect by the IBM.

As mentioned in the case study that the mangers at IBM often considered new opportunities for innovation as a distraction from their core business activities thus limiting themselves to only those opportunities which corroborated their existing strengths. Inability of the senior management to reward and look for new and strategic opportunities and rather reward short term results. Though, short term results play a critical role in keeping the organization is momentum however, it is really critical that the organization and its management must develop the skills and aptitude to reward the long term strategic building of the business. Large organizations such as IBM therefore lack the ability to focus on thinking beyond what they are good at and focus more on achieving the near term results.

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Large organizations are also often pre-occupied with their existing markets and demand patterns observed in existing markets may serve as a satisfying factor for them. A higher and consistent demand from existing markets therefore is one of the reasons why large organizations fail to create new businesses because short terms strategic business targets are often achieved from existing markets rather. This however, also indicates that the large organizations often become complacent and stop looking for new opportunities.

It is also important to note that the strategic financial objectives of the firm may be different as compared to growing organizations. Since large organizations often pass through their maturity stage therefore they focus on achieving sustainable profit targets rather than taking actions to drive higher P/E values. Since cash flow patterns are more predictable for mature organizations therefore the need to drive higher value by creating new opportunities.

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