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Real troubles for IBM began with the companys lag behind competitors in a highly rapidly evolving market The recession in the early 1990s aided to the difficulties of the company in catching up with the market These are some detailed points that explains the key reasons for IBMs struggles Competitive IBM has dedicated much of its resources to research and development at over 650 million in 1991 which is 10 percent of the companys total research and development budget but has difficulty commercializing on it Michael Borrus the director of the Berkeley Roundtable of International Economics says The problem was getting it out of the labs and into the marketplace If they could have done that IBM might be in a different place than it is today Researchers have ignored the expanding markets of IBM pursuing conceptual ideas rather than ideas with commercial viability January 1992 IBM is behind on their check processing system IBMs competitors have made significant gains Late 1991 IBM finally delivered but lack of available products is causing the company to lose potential customers March 1992 IBM released its new OS2 20 operating system criticism came from customers the trade press and Microsoft IBM will meet its most conservative sales estimate of two million copies in 1992 Microsoft will ship at least 10 million of Windows 31 Home users and small businesses could not find copies until two months after its release In 1992 IBM launched a 20 to 30 percent reduction in the Personal System2 line which still left the companys prices significantly above many of its competitors particularly at the high end of the market IBM waited two months to react to the price reductions by Compaq and Dell The cuts still failed to attract the demand the company was hoping to create Dell in 1992 implemented middle of the road cost and quality measures that effectively replaced its retailers with direct
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