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Iomega offers customers a way to store large amounts of information on disks rather than saving them on the hard drive of their computer. The company offers 100MB Zip USB and now the new 250MB Zip drives. This option benefits both businesses and personal computer owners. Businesses profit from owning a Zip drive due to the convenience of saving large presentations or proposals on a disk and then carrying it to different places; for personal computer owners, the Zip drive allows everyone in the house to have their own disk, keeping children s games separate from parent s finances. The notebook Zip gives people with digital computers the ability to carry large amounts of information with them in a slim, low power design for easier storage and transportation.

Iomega recently lowered the price on their external Zip 100MB SCSI and their 100MB Zip USB; the new prices are $99.95 and $129.95, respectively. Reducing the prices was driven by the product s universal adoption by the users of more than twenty-two million Zip drives, said David J. Henry, vice-president and general manager of Zip/Jaz management at Iomega Corporation. 14 By lowering the price of the product, Iomega makes their products more affordable for their customers, attracting more potential buyers.

Management

Iomega Corporation announced in January 1999 that it is restructuring in hopes of increasing gross profit figures for the upcoming fiscal year. Although Iomega controls over 86% of the removable storage market, its gross profits have decreased to levels that have made public investors somewhat weary. Previously, Iomega s structure was that of three decentralized product units which included the Professional Products, Personal Storage, and Mobile Storage divisions. The new structure will focus on eight business functions that include sales and marketing, product development, manufacturing and operations, corporate marketing, finance, legal, human resources, and corporate development and strategy. In addition, top management created a new functional group known as customer service and development which combines the existing customer service organization with a new group of applications engineers.15 Iomega hopes that these changes will ease the rise-fall-and-rise-again impression that the company has acquired since its entry into the removable storage market in 1980, thus spurring improved gross profits, consumer confidence, and an increased interest on Wall Street.16

In 1983, Iomega was on top of the Wall Street world. The searing property raised $21.7 million in public offerings due to the interest drawn by IBM PC users who were amazed by Iomega s patented Bernoulli Box technology. The Bernoulli Box used a subsystem with stand-alone disk drives that rest beneath the monitor and provide unlimited data storage capability with removable cartridges. After several years of prosperity, the bottom fell out in 1986 and 1987 when computer makers began including relatively large storage hard drives as a standard part of the home PC. Demand for the Bernoulli Box technology waned, and Iomega experienced hard times that included an $8.5 million bank debt and enormous inventories. Michael Kucha took the reins as chief executive officer (CEO) and immediately made an impact on the struggling company. Kucha cut costs by trimming the workforce from 1,350 to 750 as well as utilizing substantial tax write-offs. In less then a year, Kucha helped Iomega gain an $18 million cash balance, cut the bank debt to zero, and slashed inventory by 50%.16 More importantly, Kucha stressed research and development during his leadership reign. The company was able to adapt its Bernoulli Box product for the Apple Macintosh computers and began benefiting from the increased demand for the Macintosh in the late 1980 s and early 1990 s.

After a few years of slightly above average success, 1993 proved to be a disastrous year for Iomega. CEO Fred Wenniger, who replaced Kucha in 1989, departed due to shrinking margins and increased competition. The removable storage market had recently been flooded with Iomega clones that caused prices to decline, thus increasing competition. Analysts wondered if the company would survive the year.17 Leon Staciokas was named acting CEO as the company restructured during 1993 and 1994. In January 1994, Staciokas advocated a staff cut in hopes of reducing overhead expenses and freeing up extra cash. Eight percent of salaried positions were cut as part of the corporate wide restructuring.18 Later in the year, Kim Edwards replaced Staciokas and became permanent CEO of Iomega. Edwards first task was freeing up more money to invest in updating and improving technology. In July, Iomega cut 100 salaried jobs in a bold management move that would free up $4 million in overhead annually.19

Edwards new management approach towards Iomega eventually transformed the company from a struggling business into the most successful removable storage manufacturer in the world. This approach was based on the idea of creating a product that the public would buy and use rather than simply admire. After meeting with top management and technical advisors in the early months of 1995, Edwards was able to lay the groundwork for

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