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Global Issues in Business Ibm

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Homework Week 5
Jose Vasquez
DeVry University

BUSN-427 Global Issues in Business
Professor Rasiah
10/4/12

Homework Week 5
International Business Machines (IBM) first step to expand was internationally which was done by the classical international pattern. The classic international pattern was simply enterprises doing activities at and selling product overseas through sale offices. When Palmisano joined IBM in 1972, it had already moved away from the international approach and was practicing the multinational enterprise. The multinational enterprise in this case was small IBM’s across major national markets across the globe. IBM had to change its strategy again to one that Palmisano called a “globally integrated enterprise”. What he meant was that operations would be placed across the world that encompassed economics, expertise, and the right business environment. In order to achieve this globally integrated enterprise IBM located: its semiconductor R&D and manufacturing operation in Vermont and New York, its global procurement center in China, global services in India, and IBM’s external and internal websites which are supported in Ireland and Brazil. There were three reasons why IBM employed this new strategy. The first was that the world economy had to incorporate the concept of globalization in order to survive. The second reason was one that IBM customers started which was shifting toward global integration. The last reason was that IBM was being to experience fierce competitions that were emerging in regions like China and India. IBM started to lose shares in information technology services business due to a trio of Indian outsourcing firms. In order to compete IBM had to adopt the low cost model that these Indian firms were employing. IBM soon welcomed Daksh which was a smaller firm but grew enough to compete with the bigger firms in India.

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