...For many years IBM has been a leader within the technology industry by innovating and continuing to advance within the market. As a major leader in the technology industry it is important to understand the current strategies used along with future strategies that may assist IMB in future growth and success. According to Watkins (2007), “A business strategy is a set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making” (Para 1). Having a clear understanding of what a business strategy is and how it can affect the success of a business is the first step in determining the different strategies and the advantages of each. At the start of IBM, a product differentiation strategy was implemented in order to gain entrance into the market. At the time IBM was starting a new idea of cloud computing began to emerge. Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (Grigoriou, Retana, and Rothaermel, 2013). The advantage to using a product differentiation strategy is to gain entrance into the market by producing a new and innovative product that consumers not only want but need. After years of developing the product it would be in the best interest of IMB to utilize the business strategy of competitive advantage. IBM can accomplish this business strategy by offering the innovative cloud computing within the market allows IBM to offer a higher...
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...attention on for their strategic reshape? I think the most important change to lead the IBM to success is that IBM changed their business model from low margin business like PCs and hard drivers to upmarket to services and software. Because the low margin hardware market has the very competitive market with many players based on China and Taiwan. 2. If you check the stock performances of the two companies since 2005 when IBM sold off its PC division to Lenovo, the thin-margin PC business appears to have worked differently for two companies. The same asset (i.e., the PC division) wasn't beneficial to IBM but the opposite was true to Lenovo. How would you explain this? IBM has maintained strong position in IT industry. The stock price say this to me. IBM read the trend of industry very well. At 2005, IBM can’t generate profit from PC division. So if IBM did not sold out PC division and then continue operation PC division. They may be failing to come present position. IBM sold PC division at the appropriate time, and they also got reasonable money that can be used to improve IBM’s software skills and other division’s abilities I think that in the economy, each economic unit who is the company has the competitive advantage. So same assets can be playing other role in other company. Lenovo has the competitive advantage in low margin PC and hardware industry. and IBM has the competitive advantage in advanced software and IT related service. So the selling IBM’s PC division to Lenovo...
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...The Link Between Competitive Advantage & Corporate Social Responsibility | Business and Society | | There is currently growing interest in corporate social responsibility (CSR) among both companies and managers. It has become an important topic of theoretical concentration and one of the most widely accepted business concepts. The major issues in the field of CSR concern stakeholder analysis and corporate strategic management. Numerous attempts have been made to link CSR and financial performance. While the debate over CSR continues, it reveals that some additional research can be done on the link between CSR and competitive advantage (CA). CSR is understood to be the way firms integrate social, environmental, and economic concerns into their values, culture, decision making, strategy, and operations in a transparent and accountable manner (Berger, 2007). Thereby firms establish better practices within, create wealth, and improve society (Berger, 2007). CSR programs go beyond legal and ethical frameworks to include a wide range of issues for the organization (Berger, 2007). Specifically, CSR programs can impact a wide range of issues managed by the organization including: corporate governance and ethics programs; health, safety, and environment programs; attention to human and labor rights; human resource management policies; community involvement; respect for indigenous groups and minorities; corporate philanthropy and employee volunteering; adherence to principles...
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...Internal and External Equity Comparison Edgar Martinez HRM/324 September 10, 2012 Annette Clark Davis Internal and External Equity Comparison In today’s competitive globalized economy, an organization’s approach to equity and its perception of equity can affect an organization’s ability to captivate, retain, and motivate its employees. Therefore, external as well as internal equity play an important role in an organization’s design of its compensation structure. In this essay, it shall examine the total compensation plans for the Home Depot Corporation and IBM Global Services, focusing on internal as well as external equity. Additionally, it shall also review the various advantages as well as disadvantages of internal and external equity for both organizations. Finally, it will provide an explanation to how each plan supports each organization total compensation objectives as well as the relationship of the organization’s financial situation to its plan (University of Phoenix, 2009). Internal and external equity An Organization that notably uses internal equity to form its pay structure is the Home Depot. The Home Depot’s internal equity exist because of its pays wages and hiring processes designed to fit each store budget, instead of hiring people with the skills to do the job at a market rate pay. The Home Depot’s decentralized stores use an elitist compensation system with different compensation plans by organization level and incentives offered only to...
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...IBM Case Analysis “What happened to IBM, the symbol of American supremacy?” -Challenge to America video, 1993 Problem Statement IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace. Problem Analysis In 1993 IBM reported a $5.6bn loss for the fourth quarter of 1992 ending a yearly deficit of $4.97bn; which at the time was the biggest annual loss in American corporate history. The fiscal loss could be explained in part to the ongoing aftermath of the severe 1990-91 recession that adversely affected the entire computer industry, but clearly IBM was no longer the colossal success it had been throughout most of its history. Primary to its listless growth was a fundamental change in the environment of the computer industry, which was the persistently accelerating rate of technological breakthrough in the world of data processing and IBM’s slow response to this change. IBM’s personal computing business technological environment was changing rapidly as the underlying shift in the computer field was from mainframe computing dominance toward personal computing...
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...MACHINES (IBM) International Business Machines (IBM) is a leadingcompany in global technological products and services. It specializes in services, software, systems, fundamental research and related financing. This mix of businesses and capabilities together provide integrated solutions to the company’s clients (ibm.com). IBM Business Strategy In keeping with the business strategy perspective, an organization’s competitive advantage lies in its ability to produce or get resources and competences, "take a strategic position in a market and implement a competitive strategy that takes into consideration the opportunities and threats in the external environment” (Porter, 1980). Applying a business strategy that is coherent increases competitive advantage by influencing organizational outcomes and creates superior performance. IBM has successfully incorporated this perspective. The 2014 Annual report states that IBM’s strategy continues “to be one of innovation and a constant drive to deliver higher value for our clients”. This global strategy is positioned on three pillars: data, cloud, and engagement. Pillar 1 - the company will use data to transform industry and professions. It reads: “We are making markets by transforming industries and professions with data”. According to IBM data is increasing capability, rapidity and diversity in an exponential manner and is emerging to be a novel global natural resource. It has embraced data as the new heart of competitive advantage...
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...TABLE OF CONTENTS Introduction 2 Global Impacts of the Credit Crunch 3 IBM – International Business Machines 4 Table 1: IBM’s Financial Performance History 2000-2009. Source: IBM Annual Report 2009 5 Table 2: Earnings per share 2006 to 2010 projection. Source: IBM Annual Report 2009. 6 How the Credit Crunch Impacted IBM’s Operations 7 Global Integration 7 Changing Business Scope 7 Revenue 8 Human Resource Management Impacts 8 Price Instability 8 Exchange Rate Fluctuation 8 Interest Rate Fluctuations 8 Debt 9 Notable Impacts 9 IBM’s Operational Strategy 10 Strategic Response 10 HRM Strategy 10 Value Chain Strategy – Developing a Business of Values 11 Table 3: IBM Value Chain. Source – ibm.com/services 12 International Strategy 13 Institutional Strategy 13 Recommendations for Future Growth 14 Delivering Value to Customers 14 Human Resource Capital 15 Research and Development 16 References 17 Bibliography 18 Introduction The ‘Credit Crunch’ emerged in 2007 with the first effects being felt by the U.S. Mortgage industry. The term ‘credit crunch’ came was used to describe the collapse of the subprime mortgage industry that resulted in a freeze in lending by financial institutions. With non-payment of loans, huge debt and no capital gains, financial institutions began to go under. Investment banks, financial services and real estate market felt immediate impacts. Trillions of U.S. dollars were lost, huge government bailouts...
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...Why did Bharti outsource its network operations? Bharti was facing a challenge – the customer base was growing explosively (100% per year) but it was not able to keep up with the pace of the market growth. Bharti had challenges with management time, capital costs, and human resources. 1. Faster time to market: There was huge delay between the time when Bharti needed additional capacity and when that additional capacity could be up/running. Bharti was spending from six months to a year in the process of planning, tendering, purchasing, and installing. This took a lot of time from Bharti’s management team too and did not allow them to focus other important priorities in the company. 2. Scalability: Bharti was facing scalability issues both in its IT function and network function. 3. Human resources scarcity: Given the rapid growth in the industry, Bharti was finding it more and more difficult to hire and retain people. It was facing intense competition from other telecom providers as well are other multi-national companies to hire engineers. 4. Lean and predictable cost model: With the rapid changes in technology and also in the requirements for network capacity, Bharti was having a very unpredictable cost model. Instead of huge capital assets on the balance sheet and capital expenditures, Bharti wanted operating expenses which went hand-in-hand with the pace of its growth. 5. Capital Expenditures: With industry consolidation, the focus was switching from having...
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...International Business Machines, abbreviated IBM and nicknamed "Big Blue" (for its official corporate color) was incorporated in the State of New York on June 16, 1911, is a multinational computer technology and IT consulting corporation headquartered in Armonk, New York, United States. Now, the chairman and CEO of IBM Company is Samuel J Palmisano. IBM manufactures and sells computer hardware and software, and offers infrastructure services, hosting services, and consulting services in areas ranging from mainframe computers to nanotechnology. IBM has been well known as one of the world's largest computer companies and systems integrators. With over 388,000 employees worldwide, IBM is one of the largest and most profitable information technology employers in the world. IBM holds more patents than any other U.S. based Technology Company and has eight research laboratories worldwide. The company has scientists, engineers, consultants, and sales professionals in over 170 countries. IBM employees have earned Five Nobel Prizes, four Turing Awards, five National Medals of Technology, and five National Medals of Science. IBM competitors IBM's main competitors are Hewlett-Packard Company (HPQ) and Dell (DELL) but each of these companies has a different focus area. Dell makes most of its money on PC and server hardware, while Hewlett-Packard is more diversified as the leader in PCs and Imaging & Printing as well as offering IT services. Since IBM relies heavily on its Software and Services...
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...Information Technology and the Intranet Sherri Wheeler Keller Graduate School of Management IS535ON JUL10 SECJ Abstract Information Technology has become essential in every organization; it has provided firm and specific value which results in competitive advantage over other firms. Investigations are conducted to deal with specific business issue of technology. A report is prepared on procuring I.T. services from IBM. Companies have the intention of connecting with IBM for I.T services news and information through the Internet. Business services offered by IBM are being studied, and a particular focus is on consulting and information services. Website services and other Application services are also investigated to report on I.T. issues. The strategic results of information technology solution will provide expertise, consultancy which will assist in building competitive advantage. Purpose of the Report: The report aims at obtaining information about I.T. services from the IBM, an information technology and consulting firm. Also, this report will show the benefits of incorporate the intranet for internal and external purposes. A study is conducted on how to access integrated data, acquire knowledge and guidance. Intranet: An intranet is an internal, secured business environment, which uses HTML and TCIP protocols like the Internet, but operates on a LAN (local area network). If the LAN provides access to the Internet, the intranet resides behind a firewall...
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...Executive Summary This paper reviews the competitive landscape of the PC and peripheralsindustry through analysis of thecompany strategy, business model, distribution channels, competencies and value chain to provide a series of recommendations for Acer’s Board of Directors. Acer is the third largest PC manufacturer in the globe using atransnational strategy to procure components to maintain cost leadership. By using strategic group maps, Porter’s five forces, SWOT analysis, value chain review and the Dranove model a comprehensive analysis of the Acer external and internal forces are reviewed. On the basis of the analysis a series of recommendations have been made to ensure that Acer remains competitive, retains the number 3 ranking and are sustainable into the future. It is recommended that Acer find blue ocean against competitors through the use of the premium branding of product, whether this be Ferrari or another premium luxury brand and determine if some of this can be derived from sustainable and green materials. Once these are determined it is recommended to use a balance scorecard with alliances to help drive innovation together with a tried and tested sales system to increase Acer market share. Background and Context Acer is the third largest PC Company in the world (9.5% market share) with growth being experienced outside the mature USA market, predominately in emerging nations. Although Acer experienced growth in 2007, increasing its sales by 32.9%, the PC...
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...with reference to Hechlinger, J. Article 2 Other articles highlighting the application of new learning with respect to outsourcing 3 Dean Meyer’s Article highlighting the advantages of outsourcing 3 Sholstica’s Article highlighting the disadvantages of outsourcing 6 Present and future application of outsourcing within workplace 6 Conclusion 7 References 8 Outsourcing Introduction In the present dynamic environment, one way the companies can gain competitive edge over their competitors is by taking full advantage of all the business aspects. One of such possible aspect of performing organizational activities in an efficient manner is through the platform of outsourcing that provides a company an opportunity to hire an outside firm having proficiency in a particular field and then getting some of the organizational tasks completed through this hired firm either at a reduced cost or an increased productivity rate. A number of factors (both related to internal and external environment) are considered that helps to decide that whether outsourcing is a right answer for a particular company. The process of outsourcing facilitates learning of a number of aspects that if properly applied within an organization can serve as a competitive element for the company, enabling them to remain a competitive force within the industry. The objective for writing this assignment is to highlight the outsourcing aspect by indicating the issues that revolve in the particular area, referencing...
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...1. Historically, what were the Apple’s major competitive advantages? We can identify the Apple’s major competitive advantages through The Potential Source of competitive advantage Model by Michael Porter. Apple successfully differentiates its product as the high-quality PC product. While IBM PC has relatively open system and low price strategy, Apple concentrates on their loyal customers. Apple had relatively narrow customer base in PC market. But their products were a lot different from the standard of the market. Loyal Apple customers had some kind of pride in their Apple PCs. So we can say that Apple had built strong relationship with the customers. This relationship allowed Apple to set premium price on their Macintosh. This discernable differentiation was really helpful to gain high margins but it was also a disadvantage for Apple. IBM PC has relatively low price. So the market share of IBM grew quickly. IBM dominating PC market, Apple had lost significant amount of customers. And their revenue dropped. Also, Apple’s limited compatible software was a problem. IBM’s open system spread out around the world quickly, but Apple stuck to its closed system. 2. Analyze the structure of the personal computer industry over the last 15 years. There were also few successful PC manufacturers, like Hewlett-Packard, Dell, Acer, and Lenovo. These companies stably had held their grounds. Apple made their PC and software exclusively. This was the reason why Apple PC...
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...IBM is a multinational corporation that started its activities in 1911. But its origins can be traced back to 1890, during the height of the Industrial Revolution. It was first known as the Computing-Recording Company, then in 1924, it took the name of International Business Machines. Nowadays, this multinational company is known as the « Big Blue ». IBM main activity is to find solutions to its wide range of clients using advanced information technology. Its clients are individual users, specialised businesses, and institutions such as government, science, defence, spatial and educational organisations. To meet and respond to its customers needs, IBM creates, develops and manufactures many of the world’s most advanced technologies, ranging from computer systems and software to networking systems, storage devices and microelectronics. Indeed, IBM has various product lines and services a few of which are: the Personal Computer that was first created in 1981, AS/400 business system, RS/6000 family of workstations and server systems, S/390 enterprise server, groundbreaking ThinkPad notebook computer; the award-winning IBM Netfinity and finally, PC Servers. It is an important supplier of hard disks, random access memories, and liquid crystal monitors. IBM has created the image “Solutions for a Little World”. Its products and components in other firm’s products are so widespread that people around the world associate the name IBM with computing functions. IBM is a global...
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...Amongst its competitors, Dell has been very profitable with its 2001 ROE of 38.72% and growth in earnings of 31% compared to the next fasting growth Competitor, IBM with earnings growth of 5.0%. The rising ROE was driven by increased profitability, higher asset turnover and increased leverage in the business. Dells cash conversion ratio was also superior to its competitors allowing them to generate cash faster than their competitors to reinvest in the business. The Company has a healthy balance sheet with little debt and sizable cash amounts (largest % to assets in the industry with 40.48% in 2001). Dell is an outperformer in the industry due to its direct sales business model. This report will review the financials of Dell Computers in relation to its competitors and discuss the competitive position of Dell in the market place. It will also detail how the Company has changed from 2000 compared to 2013. As Dells most direct competitor IBM’s performance was compared to Dell to understand the reason for Dell’s outperformance. Ratios in Exhibit 1.1 shows significant growth in Dell sales as they increased in 2001 by almost 26% from the previous year compared to 1%, 10%, 15% and 7% for IBM, Compaq, HP and Gateway respectively. This trend is consistent with Net Income having increased by ~31% for Dell compared to 4.95% for IBM. Part of Dells superior performance was the use of its assets. Dell’s asset turnover is 2.37...
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