Description
Write on IBM as a company and what strengths and weakness they have. Introduction State the problem or issue (It is expected that you write: This paper will attempt to solve the following problem or issue: (state the problem)… Summarize and introduce Background What is the environment? Culture? Socio/Political/Economic factors? Establish an understanding of the organization: outside research Alternatives (TWO or more). (this section is extremely important!!!!!!) Explain possible options Pros?????? Cons?????? Why are these alternatives possible or not possible? What are the obstacles? Are there outside forces at play? Proposed Solution Decide on one solution Provide support Explain your reasoning!!!!!!!!! Did you do outside research? Can you support your solution with real-world experience? Recommendations How will your solution be implemented? Is there an action plan? Who should be tasked with these steps? References Current APA citations Current APA format Title page References and citations in current APA format 3 pages (not including title and reference pages)
Case Study 5.3: Dynamic Capabilities at IBM
Edmund Solecki
Embry-Riddle Aeronautical University
6 July 2020
Introduction
In today’s modern world, information technology plays an extremely important role for business and leisure activities. Without the use of IT, sending files or sharing important information could take weeks to send to someone by mail or other means. Additionally, data tracking and analysis is done by most, if not all, businesses using IT. IBM is a great example of emerging and effective IT implementation, and has many incredible capabilities with cloud computing, data and analysis, and systems of engagement. With high competition against IBM like Amazon, Google, and Oracle, IBMs strengths and weaknesses will be evaluated on and how IBM will move forward as a company.
Dynamic Capabilities at IBM
IBM is one of the top leaders in IT. The current CEO of IBM, Virginia Rometty, says the current business strategy for IBM is to continue to build and update the three main technologies when it comes to IT. The first technology is cloud computing. Cloud Computing becomes more of an important contribution to businesses every day because of the vast amount of information able to be stored and shared. The cost of utilizing IT is relatively low, and the technology itself is very convenient, thus creating a massive increase in the number of businesses that use this technology.
The second disruptive technology is big data and analytics. Data can be acquired, processed, stored, etc. All of those things happen at a very high volume. In addition to cloud computing, using big data has also been preferred by many business today. Modern business require data to function properly. Data helps track trends, feedback, and adjust strategy. Data analysts and software engineers are the primary managers of big data at companies such as IBM. Lastly, the third technology is social media. Companies are using new forms of engagement to engage with consumers and this is beneficial for them as they can engage one-on-one with customers without sacrificing human capital to do so as in the past. IBM’s corporate strategy revolved around moving from a vertically integrated company which kept most of the outsourcing and manufacturing most components inhouse to becoming more globally integrated and outsourcing when need be. This strategy change was successful as under the old vertical integration strategy, IBM recorded one of the biggest net losses of a corporation ever in the United States history (8.1 Billion).
One of IBM’s major strengths is the brand name and reputation associated with IBM. IBM has consistently ranked highly in various company rankings dealing with but not limited to: profitability, reputation, brand value and global presence. These high rankings signify the brand awareness surrounding IBM and most people whether involved or not in the industry can name and recognize IBM as one of the worlds leaders in technology and innovation. Another one of IBM’s strengths is their continuous innovation as a technology leader in todays market. IBM was a first mover when it came to cloud computing, and their “Blue Cloud” program offered firms and enterprises the ability to have their own private cloud server which today is something that is invaluable and almost a necessity.
The final strength of IBM is the diversification of product lines and services. IBM previously generated a majority of their revenue from their hardware sales, but as of recently they have shifted their product lines and services to accommodate more software and led to positive growth. The company now generates 50% of their income from software alone and this diversification is shifting them into the new era of technology which is software based. IBM also has diversified geographically and now earns more than 60% of their revenue outside of the United States. IBM has a variety of strengths but now we can take a look into some of their weaknesses as a global firm.
The first of IBM’s weaknesses is the growth of IBM may be greater than the company is able to handle. IBM’s growth means slower service times and specialization in services is harder to achieve due to them having over four hundred thousand employees worldwide. This can lead to attrition of the company due to product lines overlapping and cannibalization; which can greatly reduce profit margin. Another one of IBM’s weaknesses is their outsourcing of jobs. They have greatly reduced the number of employees in the United States from 100,000 in the past to around 30,000 currently. The weakness here is that although they are a U.S based company, there has been an explosion of employment outsourcing in the company which may or may not be a considered a weakness based on what country is being affected.
Another side effect created through this is through the communication barrier created from outsourcing labor to other countries. Moving past weaknesses, some of IBM’s opportunities are to continue to grow further their cloud and security services as well as their enterprise solutions. This industry will continue to grow and there is a huge profit margin available to the worldwide company leaders who will take advantage of this. Another opportunity available to IBM is expanding their consulting services even further. Consulting services are becoming more and more valuable to firms as firms are using more and more external sources to analyze their data and provide feedback and advice on how to move forward. IBM’s opportunities may seem golden, but there are also threats to IBM. Some threats to IBM is the intense competition they are in contention with regularly which include : Amazon, Google , Hewlett Packard, Oracle and others. The competition is fierce so IBM has to remain sharp in all aspects of business management. Another threat to IBM is the global economy, whose growth is fluctuating unpredictably. Since a majority of IBM’s revenue is coming from outside the United States, this is becoming an increasingly greater threat and IBM needs to take note of this as it can significantly cut into their profit margins spreading across their product lines.
