In the late 1980s, IBM made a significant error in judging the trend of market competition, it ignored the rapid development of the personal computer revolution at that time, and still though of the hardware of the mainframe development would bring the company continued to prosperity. And in the face of rapidly changing market, IBM's organizational structure and centralised bureaucratic management system accelerate the company's business crisis. in the 1990 s, the company finally dropped in serious trouble. From 1991 to 1993, IBM's losses were more than $14.7 billion, and became the largest defective net in history. In January 1993, IBM's directors board decided to dismiss the company President, and employed Louis Gerstner who have served in McKinsey, and was the original RJR food tobacco companies’ management consultancy President, as chairman and chief executive of IBM's.
Mr Gerstner took found that the company's competitive position has been substantial violated, and decided to reshuffle the company's top decision-makers and managements, in order to improve the leadership system, he established a strategic long-term strategic decisions organization, namely policy committee and operating committee.He knew the importance of formal competitive intelligence system on a unified company level,and he put forward to strengthen “the research of competitors”, built a “mechanism of competitive intelligence”, and make the competitive intelligence to be operated in company strategic marketing plan and sales strategy. Under the support of Mr Gerstner, IBM started a constructive and the competitive intelligence system improving plan , and established a company's competitive intelligence experts to manage its operation at the core of the entire site. IBM's policy makers hoped it can be able to judge the enterprise competitors’ attempt to woo IBM customers timely and accurately through the plan. In order to deal with these competitors, IBM organized and implemented the navigation action of competitors competitive intelligence project, focusing on the IBM’s 12 competitors in the market, sent a number of senior managers as the resident expert to monitor each competitor, their responsibility is to ensure that IBM master competitor intelligence and business strategy, and take appropriate action in the market, established competitive intelligence system on the basis of these information. The competitive intelligence system includ complete management information network and resident expert who monitor competitors and IBM's competitive intelligence personnel.each working group analyzed competitors on a daily basis, competitive intelligence based on Lotus company’s Nores software system to provide the online discussion database for the working groups, enable IBM’s executives and analysts around the world can get into the competitive intelligence database through the network, and make a new competition analysis. Competitive intelligence group also use the IBM’s Internet technology of global access to get outside information, use the IBM's own Internet technology update information within the enterprise. With the constant improvement of the system, the competitive intelligence started to imelte into IBM's corporative culture, and play a more and more important role in the management process.
By adjusting the focus of competitive intelligence and establishing new competitive intelligence system, the competitive intelligence power of IBM's departments can effectively concentrate on the main rivals and the major threat, and provided various ways to improve the level of each competitive intelligence team collaboration, and optimized the original intelligence resources, enhanced the ability of the company to adapt to market changes and competition, and meet the needs of customers in the global market. The company’s sales continue to grow, the function of competitive intelligence in IBM management has gradually appeared. According to the survey, during the period of 1998-2000, the growth of competitive intelligence for the whole company's contribution is 6% ,8% and 9%, and then IBM get leading position again in the information technology industry, in 2001, the company's total profits is $8.093 billion, shareholders' equity is 19.433 billion RMB , IBM's business growth caught the attention of the public again.