Gerstner's New Business Model - Case Study Example

IBM was facing competition from low-cost network servers in the markets. In addition, the markets had cheap alternative products, for example, PCs. The company faced the challenges of owning its software. They relied on the software from Microsoft. In addition, they did not have specialized application software. The company acquired assets worth $3 billion from Lotus. The asset added to the general capital of the company.

The company has the risk of losing customers if they do not provide experts who would advise clients on the new business model (Charles & Gareth 85-87). There are questions that the management has to answer if they want a new model to be a success. They have to ask themselves where the company would get the resources for outsourcing and consultation. In addition, they should determine the best marketing tools for making internet advertisement a success. The management has to ask themselves how they will improve the customer experience to transform the company into a customer-driven corporation (Marsh 100).

For a company to get the best outsourcing and consultancy resources, the paper recommends that the management upgrade its computer solutions to the state-of-the-art. In addition, the company has to hire experts to conduct internet marketing. Lastly, IBM has to produce goods that meet 'customers' tastes (McDonald 50).