Chapter 8 analysis International Business Machines (IBM) is an Information Technology company with its head office in New York. It manufactures and distributes computer hard ware and software components to both the local and international markets. It has diversified its product offering to engage in building IT infrastructure for companies, providing web hosting to small and medium sized companies (SME’s). It also consults for corporate of a variety of information, communication and technology needs. Its clientele varies in size and form; it deals with wholesalers, who distribute its products and services to the mass market.
It also helps corporate bodies develop IT systems to improve internal efficiencies. IBM is market savvy, and is at the forefront in protecting its own inventions from imitation by patenting its products. Trends in the recent past show that most companies, especially those involved in mass production of low cost IT products, copy their technologies from more advanced companies. They then offer these products to an unsuspecting market at low cost. The company have also established nine research laboratories in different places of the world.
Moreover, the company has an excellent team of employee with a high degree of qualifications, and which highly values teamwork. These factors have seen the company have a competitive edge over the other US based IT companies. It has an effective internal and external communication tools that keeps its customers supplied with the most recent technologies. For instance, the company has a Facebook page where it updates clients on product updates and providing general computer care information. It organizes workers into teams which are responsible for specified tasks; reports from these teams’ acts as a guide when making short and long term business strategies (Garr, p.
61). Critics about IBM’s company culture come from the fact that they tend to rely more on client message rather than recognizing them as a partner in business. In its core competencies, IBM is recognized by various bodies because of its business performance that has continued to impress its shareholders, making it the third most traded technology company in America. For instance, it received recognition from Newsweek as a leader in environmental conservation. The company uses product differentiation as an operational strategy; it is involved in production of both hardware and software computer components.
Because of this, it is known for inventing game changing products, for example, nanotechnology which revolutionized understanding of computer processing capabilities. The company places its customers as the most important resource and therefore, its strategies are aimed at increasing value of their products. It produces specialized products for its customers; depending on the organizational demand of the organization in question (Emerson, p. 18). This strategy has worked well for the company, allowing it to cultivate more customer loyalty and goodwill.
Chapter 10 analysis The company has introduced some business model evolutions to improve the way it handles its customers. It is now recognising its clientele as a partner in business; this change best describes the structure transformation and strategy of IBM Information Technology Company. Modern companies are now recognizing the need to be efficient by reducing employees engaged in duplicating duties, and striking the right balance between setting its products at a fair price while at the same time ensuring margins meet shareholder’s expectations.
The company has developed a culture of change; by recognizing that culture ensures good business performance. The Company obtains a commitment for change from all of its stakeholders before it embarks on introducing such changes. The IBM change strategy and practice is integrated within IBM global business service (Emerson, p. 49). The company has adopted a gradual change strategy that allows the companies stakeholders first understand and commit themselves to any prospective change before it is implemented. This way, the company ensures that the changes it seeks to undertake are well supported. Innovation has been the driving force for change, through its consistent involvement in research for new technologies and integrating such changes in the organization.
Existing employees are the major forces behind change resistance; these employees are used to their existing corporate culture and are unwilling to give up their positions when affected. They then head to the unions which engage the company in frequent court battles. This eats into its profits because of the hefty attorney costs. This is a hindrance to organizational change. The company has adopted a strategy for change, to reduce transformation and operational costs and maximize on the dedication of stakeholders to its change strategy. IBM strategies to increase revenues The company has identified small and medium enterprises as its most valuable business to business relationship partner.
This is because it is a growing sector with new units offering specialized products coming up. For instance, there is an upward shift in the number of small sized IT companies which require IBM’s products such as web hosting and softwares. It has also increased financing channels to provide the much needed funds for opening new markets in developing countries.
Restructuring is done to align human resource capabilities with the right job descriptions to make organizations more effective. In 2005, the company reduced its workforce by 330,000 to reduce on operational costs and at the same time automating some of its functions to improve on output accuracy. Such changes was aimed at reducing company expenses, removing the bureaucracy involved in its management and enable it to expand its operations overseas (Emerson, p. 81). This cost cutting measure reduces the amount spent on the workforce in the long run. The company is currently pursuing an international expansion strategy.
This is due to the fact that companies are moving to new developing markets to create niches. Convergence of global markets also requires companies to be a universal player and contribute to system development in these young markets. It has acquired PWC consulting and SPSS to diversify its product offering thereby extending its market share. The major problem with this move is the complex regulatory framework in host countries which associate multinationals with monopolistic tendencies.
These new markets offer high returns because of the rising middle class who use internet based platforms to perform daily routine duties (Lesser & Prusak, p. 49). Works cited Garr, Doug. IBM redux: Lou Gerstner and the business turnaround of the decade. New York: HarperBusiness, 1999. Print. Emerson, Pugh. Building IBM: Shaping an Industry. MIT Press, 2006. 17-135. Print. Lesser, Eric L., and Laurence Prusak. Creating value with knowledge: insights from the IBM institute for business value. Oxford: Oxford University Press, 2004. Print.