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Kellogg

School of Management

Business Strategy

Prof. Jeroen Swinkels




Discussion Questions for Steve & Barrys and IBM

Synopsis
This assignment covers two cases, both of which represent attempts to change a companys
strategy and product offerings.

After a rapid expansion over several years, the apparel retailer Steve & Barrys experienced
hard times in 2007 and declared bankruptcy in 2008. In the case discussion, we will follow
the rise of the company, with a focus on how it changed its underyling strategy and target
market.

Seventy-five years ago, computing and information technology did not exist as an industry.
In that short time, it has undergone several revolutions, from mainframes to personal
computers to the Internet era to what may be a new, mobile computing era. Over the course
of that time, IBM has evolved from manufacturer of mainframes and then personal
computers to one of the largest business service and software providers in the country. We
will discuss how IBM has adapted and survived through a series of industry revolutions.

Assignment
Analysis
1. Who are Steve & Barrys original target customers? What assets and activities does it use to
be successful in this original strategy?
2. During the time period covered by the case, Steve & Barrys experiences dramatic growth
and shifts its core from a collegiate strategy to a more fashion-oriented strategy. How
well do its assets and activities translate to this new strategy?
3. Eventually, during the most recent recession, Steve & Barrys enters bankruptcy. What is
the primary factor that you believe led to their downfall?
4. Why has IBM chosen to make major shifts in the focus of its strategy (from hardware to
services, and from services to software)? What has changed in the economic contexts in
which IBM has operated that have spurred those choices? (Hint: It may help to think about
the Intel case, in understanding the shift out of hardware.)
5. As IBM has made each of these transitions, what assets and activities have they been able to
transfer over to their new strategy? Even with these assets and activities, what are the
potential threats IBM has faced as it has moved into each segment?

Synthesis
6. What lessons should we take away from our consideration of Steve & Barrys and IBM?