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Slimming Down for Future Growth

Few corporations endure for 100 years, so IBM‘s centennial should make this year an occasion to learn from what has carried the corporation so far for so long. One of the key lessons lies in how Big Blue has moved into new-growth markets while at the same time exiting businesses it no longer saw as key to the future.

Such moves are often unpopular at first. Back in 2004, when IBM revealed that it was divesting its personal computer unit, the business world was skeptical. After all, the PC and ThinkPad had become IBM’s signature products. The decision to shed $11 billion in revenue and transfer 10,000 employees to the then-largely unknown Chinese manufacturer Lenovo was seen by some as an iffy maneuver. When the deal was announced, the smart money picked Dell Computer as "the big winner."