mis-ibm-amir-1230720437915029-2

8/8/2019 mis-ibm-amir-1230720437915029-2

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Analyze

IBM strategies,to remix their businesses in order to move to the

emerging higher-value spaces,

in Macro and Micro environment level

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IBM strategy

PESTEL analysis in Macro level

Five forces analysis in Micro level

Recommendation

Conclusion

IBM SOWT analysis

Complexity analysis

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IBM understood Value was shifting in the IT industry, driven by the risingIBM understood Value was shifting in the IT industry, driven by the risingtide of global integration, a new computing paradigm and new client needs.tide of global integration, a new computing paradigm and new client needs.

Economies of developing nations were growing rapidly, driven by historicEconomies of developing nations were growing rapidly, driven by historic

investments in fundamental business infrastructure. Enterprises wereinvestments in fundamental business infrastructure. Enterprises were

looking to tap skills and expertise available all over the world and tolooking to tap skills and expertise available all over the world and to

integrate their operations globally.integrate their operations globally.

Change in computing architecture was rippling across the data center andChange in computing architecture was rippling across the data center and

the network, along with a proliferation of technology infused into all aspectsthe network, along with a proliferation of technology infused into all aspects

of work and life. Companies were seeking to integrate advancedof work and life. Companies were seeking to integrate advanced

technology with their business processes and operations, not only totechnology with their business processes and operations, not only toreduce costs, but to enable innovation and growth.reduce costs, but to enable innovation and growth.

IBM remixed their businesses in order to move to the emerging higher IBM remixed their businesses in order to move to the emerging higher--

value spaces by focusing on software and IT industry.value spaces by focusing on software and IT industry.

IBM Strategies

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IBM Strategies

Hardware

And ServicesHardware

And ServicesSoftwareSoftwareIBM sold the personal computing department

To Lenovo

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IBM

SocialPolitical

Technological

Environmental

Economic

Legislative

PESTEL Analysis for Macro environment factors

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Iraq War in 2003, affected world economy, and

IBM stock fell down.

Technology affects directly to computer

technology industry because computer technology

can be used as a tool to invent many technological

products

An illness like bird flue, in 2004 effect to all

businesses that operate especially in China. IBM

has many suppliers in china and Asia countries.

Technological

Political

Environmental

PESTEL Analysis

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Oil price, increase the price of energy and

reduce the worth of Dollar.

IBM has a good reputation as big and innovative

Information technology company in the world.

U.S. Government, sanction against Iran and

North Korea.

PESTEL Analysis

Social

Economic

Legislative

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PESTEL Analysis

IBM and U.S. military deployed IBM¶s speech to speech translation

software to help U.S. serving in Iraq for better communication with local

security forces and Iraqi citizens.

On the other hand IBM focused more on outside U.S. market to reduce theimpact of U.S. economies problems. IBM Company revenue more than 50%

is from outside U.S.

IBM collaborated with Scripps research institute to make software

framework to allow world health organizations to more easily share and

analyze electronic health information, such as the outbreak of disease.

IBM stopped to work with Iran and North Korea, therefore they lost these

markets as well.

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I t it

f Ri lr

B rg i i g

P w r f

Suppli r

B rg i i g

P w r f

Bu r

Thr t f

Sub titut

Th Thr t

f Entr

Th Thr t

f Entr

Five Forces Analysis for Micro environment factors

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Five Forces

LOW

The high capital

investment, high

budget for research

and development, and

high technology of

production can be seen

as factors that preventnew competitors to

enter into computer

technology industry.

High

There are many

computer software

manufactures in today

global market. Each

manufacture tries to

differentiate its product

by creating newprogrammes that make

a computer more

powerful.

IBM¶s business

employs a wide variety

of components,

supplies, services and

raw material from a

substantial number of

suppliers around theworld.

The Threat

of Entry

The Threat

of Entry

Intensity

of ivalry

Intensity

of ivalry

Bargaining

Power of

Suppliers

Bargaining

Power of

Suppliers

LOW

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Five Forces

LOW

Software is the main

component of the

computer which used to

enable a computer to

perform specific tasks.

Nowadays, there is no

product to replace or substitute computer

software.

High

As IBM operates

business in B2B

market, most

organizations always

buy in large amount per

one time. Therefore,

customers have power to negotiate with the

company.

Bargaining

Power of

Buyers

Bargaining

Power of

Buyers

Threat of

Substitutes

Threat of

Substitutes

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Strengths Weaknesses

Leading provider of IT servicesStrong research and

developmentcapabilitiesStrong profitability

Weak enterprise mobility productportfolio

Opportunities Threats

Expansion in emerging marketsGrowing information on demandtoolsmarketStrategic acquisitions

Intense competitionEconomic Slowdown in US andEurope

SWOT Analysis

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is to focus on the highis to focus on the high--growth, Highgrowth, High--value segments of IT industryvalue segments of IT industry

IBMNew Strategy

.. IBM decided to become a

globally integrated enterprise

in order to participate in the

world¶s growth markets and

improve IBM¶s productivity..

. . to support two principal

goals: helping clients succeed

in delivering business value

by becoming more innovative,

efficient and competitive

through the use of

business insight andinformation technology (IT)

solutions; and,

providing long-term value to

shareholders.

SystemSystem: The relationship between things which: The relationship between things whichinteract. interact.

Complexity theory:Complexity theory:

NonlinearNonlinear: When noise is added to the graph: When noise is added to the graph

result the result are no longer aresult the result are no longer a

straight line, and are notstraight line, and are not

predictable. predictable.

Complexity theory

Simple System in IBM is focused on software more than hardware andSimple System in IBM is focused on software more than hardware andservices.services.

Noise happen by internal and external factors on organization andNoise happen by internal and external factors on organization andmarket.market.

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IBMNew Strategy

External FactorsExternal Factors

. Political. Political

. Technological. Technological

. Environmental. Environmental

. Economic. Economic

.S

ocial.S

ocial. Legislative. Legislative

Weaknesses (spun off)Weaknesses (spun off)

.. Printer division

. Storage division

. PC division

Internet's revolution

ProductProduct

complexity,complexity,high costhigh cost

This is because IBM is a complex nonlinear system, like most system found inThis is because IBM is a complex nonlinear system, like most system found innature.nature.

The more the model must look like the actual system to predict system result,The more the model must look like the actual system to predict system result,

the more complex the system is considered to be.

the more complex the system is considered to be.

Complexity Analysis in Macro and Micro level

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. The general rule for complex systems is that one cannot create a model. The general rule for complex systems is that one cannot create a modelthat will accurately predict outcomes but one can create models thatthat will accurately predict outcomes but one can create models thatsimulate the processes that the system will go through to create the models. simulate the processes that the system will go through to create the models.

IBMNew Strategy

. Innovation company. Innovation company

. Powerful brand. Powerful brand

. 84. 84 ± ±years experienceyears experience

IBM has the highest

levels of control and

the lowest of

technology risk or

transfer.

Strong research and

development..

IBM use externalIBM use external

factors asfactors as

opportunity..opportunity..

50% revenue out50% revenue out

of US and alsoof US and also

13000 partner and13000 partner and

flexible business.flexible business.

. The high budget

for research and

development,

high capital

investment .

.. Grow in

software market

IBM have strong

enough in terms of

financial, management

and experience.


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These ideas explain why things never go according to plan, asThese ideas explain why things never go according to plan, asdevelopment set up strategy base on research and analysis.development set up strategy base on research and analysis.

IBM is flexible company, they can remix their strategy base onIBM is flexible company, they can remix their strategy base onhappening. Even thought variable factors make noises in linear path,happening. Even thought variable factors make noises in linear path,IBM has potential to reduce the direct impacts of them. IBM has potential to reduce the direct impacts of them.

Base on simple factors in above, IBM can be success to achieve theirBase on simple factors in above, IBM can be success to achieve their

respects about market as well as plan.

respects about market as well as plan.


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IBM, should keep his position in the market as world's largest informationIBM, should keep his position in the market as world's largest informationtechnology company, with 80 years of leadership in helping businessestechnology company, with 80 years of leadership in helping businessesinnovate.innovate.

IBM should expand into new markets with promising growth through itsIBM should expand into new markets with promising growth through its

partner's strategy network program.

Already prospering high growth inpartner's strategy network program.

Already prospering high growth inChina, India, Brazil, and Russia, gives them competitive advantage overChina, India, Brazil, and Russia, gives them competitive advantage overother Western brands. IBM have the advantage to be top Western brandother Western brands. IBM have the advantage to be top Western brandby rapidly expanding into these markets all the while developing newby rapidly expanding into these markets all the while developing newproducts, services, and solutions to better help its wide variety of products, services, and solutions to better help its wide variety of customers from small to large.customers from small to large.

To improve and maintain its corporate image, IBM needs to find new andTo improve and maintain its corporate image, IBM needs to find new andbetter ways to be philanthropic company worldwide. For examplesbetter ways to be philanthropic company worldwide. For examplesimproving job satisfaction, communities, and living standards. IBM canimproving job satisfaction, communities, and living standards. IBM canalso offer scholarships, educational assistance, and internships to improvealso offer scholarships, educational assistance, and internships to improveeducational system, which enable them to have quality staff, partners,educational system, which enable them to have quality staff, partners,customer, and suppliers. customer, and suppliers.

Recommendations

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In conclusion refer to both analysis in macro and micro level of In conclusion refer to both analysis in macro and micro level of environmental factors on IBM strategy, IBM has strong competitors inenvironmental factors on IBM strategy, IBM has strong competitors inhardware industry like Dell or Hp but IBM can work more powerful inhardware industry like Dell or Hp but IBM can work more powerful insoftware industry with few strong competitors like Microsoft.software industry with few strong competitors like Microsoft.

IBM accuracy understand the demand for software and services skillsIBM accuracy understand the demand for software and services skills --across Asia and worldwideacross Asia and worldwide -- is growing. is growing. Therefore, the computerTherefore, the computertechnology industry still has high market growth rate. technology industry still has high market growth rate.

Although the external factors such Iraq war, SARS and bird flu haveAlthough the external factors such Iraq war, SARS and bird flu haveimpacted on computer technology industry, IBM still exit on the market. impacted on computer technology industry, IBM still exit on the market.

This is because of they have strong enough in terms of financial,This is because of they have strong enough in terms of financial,management and experience. Moreover, the technology factor hasmanagement and experience. Moreover, the technology factor haseffected directly to computer technology industry.effected directly to computer technology industry.

Conclusion

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Thank you!

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References

http://www.pmthink.com/2006/07/globalizationhttp://www.pmthink.com/2006/07/globalization--of of--researchresearch--and.htmand.htm

http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htmhttp://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm

http://intelligentmeasurement.wordpress.com/2007/03/29/macrohttp://intelligentmeasurement.wordpress.com/2007/03/29/macro--oror--micromicro--approachapproach--toto--evaluation/evaluation/

http://www.ibm.com/annualreport/2007/proxy_toc_1_excom2http://www.ibm.com/annualreport/2007/proxy_toc_1_excom2--1.shtml1.shtml

http://jlbawards.venturenavigator.co.uk/index.php/content/169?s=truehttp://jlbawards.venturenavigator.co.uk/index.php/content/169?s=true

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