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Background The strategy behind the IBAX venture was to combine Baxter¡¦s experience in software applications with IBM¡¦s expertise in the computer related business. This partnership, however, failed to produce the financial and strategic aims of both Baxter and IBM. In order to turn IBAX around the partnership sought out a new CEO who could affect the kind of changes necessary to make the company a success. As a result, IBAX hired Jeff Goodman, a MBA graduate from the University of Virginia with a background from GE. As the case reported, the problems with the company were substantially understated. In order to better analyze IBAX and make appropriate recommendations, we performed a SWOT analysis detailed below: Strengths: ¡P IBM reputation brings credibility to partnership ¡P Market Leader with 12% market share Weakness: ¡P Poor product quality (Series 3000, 4000, 5000) ¡P Poor customer service ¡P Low employee moral ¡P Overstaffed with 750 employees ¡P Void of senior level management team (only 1 lawyer and 1 Human Resources) ¡P Lack of cooperation between different departments ¡P No homogeneous corporate culture ¡P Adversarial customer relationship ¡P IBAX Sales people amateurs ¡P Organization geographically dispersed (Corporate HQ - NY, Operating Facility - FL, Business Units - IL, Business Units - RI ¡P Project Staff - CA, Service Center - OH) Opportunity: ¡P Domestic client base, opportunity for international growth ¡P Sources of revenue: software sales, installation, customization services, ¡P On-going maintenance and support ¡P IBAX develops and markets department-based info systems for: ¡P Pharmacy management ¡P Billing operations ¡P Operating room scheduling ¡P Products that network physician offices to hospitals Threats: ¡P Small hospitals merging with other hospitals ¡P Installations decreased from 285 to 220 ¡P Contract disputes b/c unrealistic client expectations for Series 4000: ¡P Disk capacity ¡P Response time ¡P Product upgrades and add-ons Group Analysis The challenges facing Jeff Goodman as CEO of IBAX are three fold. First, poor product quality, low customer satisfaction, and the inability to manage the changing market paradigm within the healthcare industry compromised IBAX¡¦s reputation as a reliable provider of systems solutions and hurt its ability to compete in the marketplace. Second, the geographic dispersion of IBAX offices, the fragmented nature of its work force and the existence of low employee moral pose significant organizational and employee relations challenges. Lastly, despite initial favorable financial projections, the venture¡¦s financial position became volatile resulting in significant financial losses even in the first year of operation. In the proceeding section, we will offer sample solutions on how Jeff Goodman can remedy the challenges before him. We acknowledge that there is a wide spectrum of solutions at Jeff¡¦s disposal and that the recommendations advocated in this report will only be a sampling that our team (Team C) felt would best address the company¡¦s ailments. Issue #1: Problems with Marketing and Customer Management The biggest problem facing Jeff is poor product quality. Problems associated with product quality stem, for the most part, from inadequate communications between sales staff and product developers. As stated in the case: -¡§The IBAX sales forces had made commitments to the customers regarding such things as the disk capacity used by the system, response time and the availability of product upgrades and add-ons.
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