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IBM Corporation at the Crossroads Report

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Updated: Jul 10th, 2021

The activities of large digital companies are dynamic since, for effective work in this market, innovation policies and the desire to improve should be maintained. In the conditions of high competition, corporations are often forced to suffer losses and falling client interest under the influence of new trends emergence. The case of IBM as one of the most well-known computer companies demonstrates a long and rather intense period of development. When involving relevant evaluation mechanisms for analyzing the venture, it can be argued that the corporation has many strengths and opportunities, despite high competition and much work that is needed to control all production activities.

Strategic Change

Today, IBM continues developing, taking into account previous achievements and introducing the new ways of expanding its influence. According to Rothaermel, Grigoriou, Retana, and King (2015), in relation to business strategies, the corporation adheres to “strategic imperatives”: cloud computing, data analytics, mobile, social, and security efforts” (p. 5). Concerning corporate level mechanisms, the company maintains its work with regard to vertical growth, advancing the sphere of cloud computing and engaging customers to use the latest developments in this field (Rothaermel et al., 2015). Such activity is in demand and can provide income even in the face of declining interest in other venture’s products.

Over the past few decades, IBM’s working strategy has changed several times. However, with Virginia Rometty’s coming, the course of activities was changed from reactive to more passive. The CEO of the business was convinced that maintaining phased development was more important than pursuing potentially unpredictable goals (Rothaermel et al., 2015). Conclusions were made regarding earlier mistakes, in particular, failure in competition (King, 2016). The transition to innovative principles of data storage and systematization has led to changes in IBM’s mode, and advances in the field of cloud computing have become obvious. The role of leadership in managing change has always been significant, and when citing Mrs. Rometty as an example, it is possible to see how the course of the corporation has stabilized and what innovations have been introduced into its development program.

Strategic Analysis

To review the strategies and achievements of IBM, it is necessary to attract current evaluation tools, for instance, SWOT analysis to determine the market characteristics of the corporation. In terms of strengths, the company has a global presence, a large customer base, and a high brand value (“IBM SWOT analysis,” n.d.). However, resource depletion and oversize are weaknesses that the management strives to overcome (“IBM SWOT analysis,” n.d). Another element of the SWOT analysis is opportunities, and based on the assessment of IBM’s practice, it has access to emerging markets and operates on the sites of China, India, and other large states (Rothaermel et al., 2015). Finally, the main threat is competition, which prompts too large IBM to find effective methods for maintaining market positions.

When assessing IBM’s industry attractiveness, it is essential to involve Porter’s Five Forces analysis. According to Rowland (2017), the corporation’s competitive rivalry is enough due to the presence of other notable participants in the market. Concerning supplier power, IBM’s performance is moderate, although the company builds partnerships (Rowland, 2017). In relation to buyer capacity, this indicator is also crucial because, as PR Newswire (2018) notes, the corporation in question seeks to expand the sphere of influence in various sectors, including healthcare. The threat of substitution is a significant factor that influences IBM’s operations and forces its management to oppose competitors’ activities (Rowland, 2017). Finally, the threat of new entry also has implications for the company’s work since the computer technology market is dynamic, and constant innovation is fraught with strong competitors.

Evaluating all the elements of the analysis may provide comprehensive insights into IBM’s market power. Although the company works on the introduction of cloud technologies and data analysis systems, some factors, for instance, competition and the threat of new participants complicates its activities. In recent years, IBM’s development has not been dynamic, but today, the trend of introducing information storage and processing systems encourages the management to develop this area and involve possible resources (Rothaermel et al., 2015). The difference between such policies is significant, which is particularly evident in profits and customer interest.

Strategy Recommendations

In order to take advantage of current technology trends, IBM should position itself as a dynamic corporation that is ready to change and adjust to modern interests in the digital realm. The corporate strategy chosen at the moment is reasonable enough since, based on market examples, an ability to create and promote own goods allows engaging customers through unique products. In this case, vertical integration is an acceptable growth system. These recommendations may be relevant, but a decline in the interest of the target audience in specific innovations may entail the need to reorganize the course of development and, for instance, strengthen partnerships.

Conclusion

The assessment of IBM’s strengths and capabilities through the use of SWOT analysis and Porter’s Five Forces system suggests that the company’s current business and corporate strategies are more robust than before. High competition and large size are those factors that complicate introducing innovations and require the reorganization of certain aspects of activities. However, a course on vertical integration may help provide customer interest and market recognition.

References

(n.d.). Web.

King, R. (2016). The Wall Street Journal. Web.

PR Newswire. (2018). Anthem and IBM announce agreement to drive digital transformation. YAHOO! Finance. Web.

Rothaermel, F., Grigoriou, K., Retana, G., & King, D. (2015). Web.

Rowland, C. (2017). Panmore Institute. Web.

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IvyPanda. 2021. "IBM Corporation at the Crossroads." July 10, 2021. https://ivypanda.com/essays/ibm-corporation-at-the-crossroads/.

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IvyPanda. (2021) 'IBM Corporation at the Crossroads'. 10 July.

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