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IBM Corporation - Essay Example

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1. IBM is a leader in IT industry with S$96 billion revenue a year. Customers and technology are the primary driving factors in this arena. Customers want products that satisfy their needs or improve their productivity. IBM looks for ways to deliver these benefits at a lower cost, smaller size, and higher speed…
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Download file to see previous pages Strengths of IBM Corporation include knowledge, relationships, selling and history. The challenges of the company are based on high quality of products and services. Direct sales force maintains a relationship. Among the weaknesses are high competition and rapidly changing technology market (IBM boosts sales productivity, n.d.). The innovative PC technology is not cheap and that is why not all the potential customers can afford it today. IMB, in contrast to Dell Corporation, tries to maintain high standards of service proposing and selling (the most important) to its customers high quality products. In this case IMB takes into account both internal and external stakeholders (Crawford, Benedetto, 2003).
Opportunities of IBM Corporation are local area networks, the Internet and training of the staff. The increasing opportunities of the Internet offer another area of strength in comparison to the box-on-the-shelf major chain stores (McDonald, Christopher, 2003). Customers want more help with the Internet, and IBM Corporation is in a better position to give it to. IBM will strengthen its long-standing commitment to 64-bit computing. For more than three decades, the power of microprocessors has doubled every 18 to 24 months, and most observers expect that to continue for another 10 years. The same progress is being made in other functions in silicon, such as graphics processing. Some portables will have the full power of desktop machines (Clarke, 2001).
The challenges of the company are to follow the technological trends of computer industry and develop new products for professional users. For instance, notebook processors will double in power every two years, "to 12 GHz in five years, predict industry observers. Disks will shrink and may be replaced by solid-state memory. Displays will grow clearer, brighter and more energy-efficient and may even unfold to desktop size. The efficiency of batteries will improve, but perhaps not enough to keep up with power-hungry applications such as multimedia and wireless communications" (Anthes, Brewin, 2002). For this reasons, IBM strategies should integrate technology refresh provisions early in the design process of major systems and components to allow upgrades during development, production and system operation.
Cost leadership (Porter, 1985), however, is a sustainable source of competitive advantage only if barriers exist that prevent competitors from achieving the same low costs. In an era of increasing technological improvements in manufacturing, manufacturers constantly leapfrog over one another in pursuit of lower costs. At one time, for example, IBM enjoyed the low-cost advantage in the production (Winograd, 1997). Then the Japanese took the same technology and, after reducing production costs and improving product reliability, gained the low-cost advantage. IBM fought back with a highly automated printer plant in North Carolina, where the number of component parts was slashed by more than 50 percent and robots were used to snap many components into place. Despite these changes, IBM ultimately chose to exit the business; the plant was sold (Prahalad, Hamel, 1994).
Competitive advantage (Porter, 1985) of IBM Corporation is driven more by sales and performance management than by manufacturing and product innovations. The direct sales model (or other near-direct models) has been successful in the U.S., and the industry is moving more in that ...Download file to see next pagesRead More
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