Introduction
Amazon is the other active competitor in the market, offering Amazon Web Services (AWS). The company provides services based on this market segment, including machine learning, flash memory, analytics, and machine intelligence. Due to its expertise in disruptive technologies, Amazon can dominate the market (Caronzolo, 2019). The advancement of technology companies has pushed IBM into a pool of challenges, mostly emerging from competitor organizations. Some of the challenges experienced by this organization involve stiff rivalry, the threat of substitutes, insufficient funds, and reduced supplier power.
Potential Solutions
According to the IBM research study, the problem is the company’s business plan, which focuses on big data analysis, cloud computing, and system engagement. The focus makes it more difficult for the company to concentrate on certain active areas that ought to provide commercial profit. Potential solutions like manufacturing PCs, increasing outsourcing, and expanding mergers and acquisitions should be considered for the success of IBM.
Increased Outsourcing
The deliberate utilization of resources obtained from other organizations is referred to as outsourcing. The organization’s outsourced resources carry out tasks previously carried out internally by employees and equipment. The human resources division evaluates the company and considers whether further resources should be added. The performance review team of a company may notice a lack of passion among the internal workers (Gao et al., 2019). Nevertheless, IBM should consider the advantages and disadvantages of outsourcing before fully diving into the strategy.
Expanding Mergers and Acquisitions
When two independent organizations join forces to form a single, new organization, a merger takes place. On the other hand, an acquisition is the taking over of an existing entity by another. To increase shareholder value, acquisitions, and mergers may broaden a company’s customer base or increase its market share (Gao et al., 2019). An acquired company does not become a new one. Instead, the smaller business is frequently swallowed up and goes out of business, with its capital becoming a part of the bigger business.
Manufacturing Microprocessors
The Global Microprocessor Market has recently gained traction due to its use in new digital applications, PCs, and communications. It serves as the brain of data centers, PCs, and large mainframes. The Computer chip Market is predicted to grow further during the forecast period. Because of the high popularity of the products, the business for microprocessors is operating well in the industry (Wu & Liu, 2019). IBM can develop efficient microchips for its industry competitors by leveraging its research and development capabilities.
Manufacturing PCs
The PC market is made up of sales of PCs by companies that sell PCs, which are multi-purpose computers for personal use. Only products and services are acquired between enterprises or marketed to end users. A personal computer (PC) is an overall, low-cost device designed for a single end-user. PCs rely on microprocessor technology, which allows PC manufacturers to integrate the entire central processing unit (CPU) onto a single chip. The most common are desktops, notebooks, workstations, and other personal computers (Wu & Liu, 2019). A desktop computer is an individual device designed that is intended to be utilized at a desk and remain stationary. It is distributed through business-to-business and business-to-consumer channels and is used in consumer, commercial, and industrial applications. To solve the problem, IBM should grow its operations to make its PC. The strategy will allow it to enhance market production, which will boost sales (Wu & Liu, 2019). The goods will easily sell thanks to the company’s reputation.
Impact of Merger and Acquisition
Mergers and acquisitions result in several organizational changes. The size of organizations changes, as do their stocks, shares, and assets, and ownership may change due to mergers and acquisitions. Mergers and acquisitions have a significant impact on the activities of organizations (Kayombo, 2019). The effect of mergers and acquisitions, on the other hand, varies from organization to organization; it is dependent on the group of people being discussed here. The transaction’s structure also influences the effect of acquisitions and mergers.
Implementation of Merging and Acquisition
The economic effect of acquisitions and mergers includes some economic effects on shareholders. If it is an acquisition, the partners of the acquired firm benefit greatly because the acquiring business pays a large sum. On the other hand, the acquiring company’s shareholders suffer losses due to agency costs and increased debt load (Kayombo,2019 ). Therefore, the stakeholders of IBM need to be adequately informed about how the process of mergers and acquisitions will affect them.
Strategy
The most important M&A strategy is the acquisition of the business organization. After deciding on a business entity for acquisition, the company can plan the next steps in the acquisition process. A thorough examination of the organization to be purchased’s operations. A study of anticipated business, clamor, and future growth will also be conducted. It will also provide an idea of the risks associated with the purchase or future business.
Conclusion
In a rapidly evolving and competitive market, business companies must create effective plans and strategies that will allow them to stay proactive and lucrative in the market. The decision by IBM’s CEO to keep investing in cloud-based solutions, big data analytics, and system interaction was appropriate. Still, it deprived the company of the ability to compete with its industry competitors. IBM has robust research and development approaches that will make it easier for other firms in the market to produce effective products.
References
Caronzolo, D. M. (2019). Digitalization in the medium and large companies of Ticino: Opportunities and challenges for IBM. Retrieved from tesi.supsi.ch
Gao, Y., Liu, X., & Ma, X. (2019). How do firms meet the challenge of technological change by redesigning innovation ecosystem? A case study of IBM. International Journal of Technology Management, 80(3-4), 241-265.
Kayombo, K. M. (2019). Critical assessment of performance of mergers and acquisitions. Retrieved from dspace.zcas.edu.zm
Wu, J. X., & Liu, S. (2019). Information security research challenges in the process of digitizing business: A review based on the information security model of IBM. Data Science and Digital Business, 81-119.