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,