IBM SALES STRATEGY In early 1993, IBM's Board of directors decided that the time was right for dramatic action. The once-proud company had seen its sales fall from almost -S69 billion in 1990 to $64 billion in 1992. In the same period, profits had plunged from $5.9 billion to a loss of S4.96 billion. In April, the board hired Louis V. Gerstner, Jr, a former McKinsey Company consultant and R.J.Reynolds CEO, to serve as its new chairman and chief executive officer and to turn the company round. In July 1993, Gerstner announced his first major strategic decision. He identified the IBM sales force as a key source of the company's problems. Many observers had expected that he would restructure the sales force which was too large and unwieldy, and had become too slow to change to meet customers' needs. Although bureaucracy and slowness were significant problems, IBM's customers and industry observers identified IBM's preoccupation with its own view of the world as the real problem. They argued that the company had stopped listening to its customers. It peddled mainframe computers to customers who wanted midrange systems and personal computers. It pushed products when its customers wanted solutions. One former salesperson noted that 'We were so well trained, we could sell anything, good or bad. Under quota pressures, we sold systems that our customers didn't need, didn't want and couldn't afford." IBM had designed its sales compensation system to encourage and reward selling mainframe systems. "You could sell a PC and get a pat on the back. Sell a midrange system and get a lot of dollars. But when you sold a mainframe, you would walk on water. You were a hero,' observed another former salesperson. Required: A. What salesforce structure options can the company employ? [20 Marks] B. What salesforce compensation plans are available for IBM to implement? [10 Marks] C. What Salesforce compensation plans were used by above? [10 Marks