External and Internal Environments of IBM Company - Case Study Example

External and Internal Environments of IBM Company Introduction Almost every organization is characterized by both internal and external factors that determine the reaction to the success of its operations. With respect to the external environment, there is much focus consisting of varieties of activities outside the company. However, it lacks immunity and proper control over internal aspects that form part of the business environment within, which the organization depends upon for sustainable foreseeable future (Rothaermel, 2013). As such, IBMs innovation and competitiveness plays a considerable role in terms of strategic management that is aimed at improving the organization requirements and customer’s satisfaction. Besides, the organization is engaged in a transformational and creation of new opportunities and markets to enhance future growth thus it increases production and sustainability of the organizational returns. As part of the understanding and recollection of the past, IBM management is engaged in the present day capability that targets future goals achievements through full engagement of the entire stakeholders. Technological segment of IBM Company The above segment forms the main IBM’s organizational strategy and is mainly referred to as global services, computer applications, systems applications and technological integration by the company. The IBM’s global segment forms a critical strategy that establishes an information technology infrastructure hence creating an insight resolution to the organizational suppliers and the customers. The technological segment provides a global return to IMB Company mainly through integrated systems leading to an improved revenue collection clarifies (Plunkett, 2006). Technology also provides an integrated platform for the business infrastructure through enhanced-business process services thus improving business value to both the organization and customers. Besides, technology facilitates the delivery of outsourcing services targeted at transforming the clients’ existing infrastructural services, which finally enhances consistency and quality delivery of risk management and financial value to exploit new market values. Moreover, the above technological segment also influences the delivery of portfolio project-based management by improving the flexibility and productivity. Such an activity is mainly done through harmonization while ensuring an adequate harmonization concerning business operational costs through proactive quality delivery and security compliance (Plunkett, 2006). Global segment According to Plunkett (2006), most scholars have reported possibilities of global impact of IBM to the environment in different habits. For instance, the use of chemicals and additives especially in the line of research and manufacturing requires proper management and disposal solution to avert environmental degradation and activities that pose extreme threats to the ecosystem. IBM Corporation has implemented environmental management policies that address concerns of employee’s workplace safety and conservative measures to improve environmental sustainability. Through the above policies, the organization has been globally attracted. More to this, its expansion through global advocacy has enabled IBM to achieve competitive advantage over its rivals. With a focus on the global segment, the organization has sustainably managed to influence a wide range of customers internationally through increased complexity and volatility. The organization has also succeeded to foster an excellent operation mechanism by forming franchise network with other likeminded companies thus making tremendous reduction on its overhead costs. IBM’s global segment has called for a fair integration of an enterprise functions thus enhancing the development of a quality leadership and innovative talent management throughout the organizational outlets across the world. The above has enabled the above company to achieve sustainable management despite intrigues and constant variation in the impacting pressure to the organizational success (Plunkett, 2006). IBM forces of competition Bäumer, Kreutter & Messner, (2012), explains that different from other manufactures IBM Corporation might appear in the market, the underlying factor that drive it towards achieving a competitive advantage. The above procedure is more or less similar to other companies that are also dealing in a similar line of products. In the production of computer hardware for instance, IBM Corporation appears to have its consolidated strategy to improve its organizational returns. As such, its competition and profitability have been moderated mainly by threats of substitute products and bargaining power of buyers as part of the five forces to achieve the organizational competitive edge. Threats of substitute products IBM has received a remarkable success in the recent past despite the threats of substitute products. While addressing the above problem, the company has put in enough mechanisms to manage its outlets through a proper connection type such as automatic security baseline adoption. Such a strategy will endure all the process are within the line of production and a recurrently updated version of the software. The above ensures consistent configuration of the organizational end products to avert threats posed by substitute products (Bäumer, Kreuter & Messner, 2012). Besides, the organization has developed an inbound policy that monitors any slightest entrants of substitute products. As such, it helps in keeping up with the bottom line growth by cutting down the costs and chances of financial engineering that might deter future growth of the company. Bargaining power of buyers In the past few years, an IBM computer manufacturer embraced a utility concept of unique competitiveness to achieve the relative escalating market share in the computer manufacturing industry. After the adoption of other market brands such as notebook and I PAD, the organization continued to optimize its strategies to make a sustainable bargaining power of buyers. Initially, the IBM bargaining power of buyers in the market has been relatively low. Consequently, the organization has only been able to maintain its bargaining power of buyers through consistent provision of quality products that contains extra features to maintain customer relationship. As such, it improves optimum success of the business (Bäumer, Kreutter & Messner, 2012). The above strategy was perceived convenient by the organization because majority of the IBM customer’s enterprises that buy the organization’s big amount of products mainly the computer processors. Ultimately, the organization tends to produce products accompanied by fashionable slogans that draw the attention of new customers while maintaining the consumer market of the already existing buyers. Prediction of the IBM’s future using the above two forces In order to keep up with other rival groups in the market, IBM Company must withstand the market force as one of the world’s largest technological producers and information based innovative companies. For an organization to avert threats of substitute products, the organization should expand into new geographical locations that promise market leverage by forming franchise to improve its bargaining power. Moreover, the organization does its best to maintain its image by seeking better opportunities in terms of charitable activities globally. For instance, IBM harmonizes job satisfaction for its employees while also improving the life of the communities around its areas of operation thus helps in building of customer’s relationship with the company hence making it difficult to change their perception towards substitute products (Bäumer, Kreutter & Messner, 2012). With respect to bargaining power of buyers, the organization has also noted that most of its customers prefer to buy high-quality products at a low cost. Therefore, the organization is expected to control its production quantity most especially in terms of hardware and software PCs to maintain the bargaining power of buyers support (Bäumer, Kreutter & Messner, 2012). Moreover, the organization has noted that there is very minimal difference between its products and the other products that are of the same line in the market. External threats affecting IBM and the opportunities available IBM is believed to be one of the oldest companies dealing in the manufacture of computer parts and accessories. Therefore, most customers have had experience in their products. With computers becoming an essential element in the current world, threat of a new entrance has become a common fact to the manufacturers. As a matter of fact, IBM experiences stiff completion from most companies. Some of its common threats include adequate customer’s experience in technological products characterized by high switching cost of hardware parts and imminent competition from other rival companies. However, since IBM has been in the technological business for a long period, the organization may consider instituting different changes in the production of its brands. The above strategy will re-entice and draw customer’s attention thus improving its flexibility in the market. Besides, the organization may also consider a rapid change in response to customer’s environment so as to avert excessive rivalry from companies such as Toshiba or Compaq (Bäumer, Kreutter & Messner, 2012). In my opinion, since the organization is faced by a strong market context and exemplary internet market, the organization should increase its share market. Therefore, it will be easy for it to develop a monopolistic approach in the market. However, it would be a lucrative approach for IBM because it has already ventured in provision of data services thus fostering a good competitive advantage. I also believe that, through wireless application, the organization can create an extensive network to customer base, staff and suppliers hence leading to a central management solution towards the emergence of new technologies. Ultimately, the organization should set up management and security committee whose mandate shall be to ensure that any slightest chances of organizational threats are detected in time and appropriate action is implemented (Bäumer, Kreutter & Messner, 2012). Strategy to take maximum advantage of strengths: Bäumer, Kreutter & Messner (2012), Confirms that it is of greatest concerns IBM Company must adopt appropriate strategies that would ensure the society remains environmentally sustainable. With respect from the above statement, IBM Company needs to institute proper strategies to achieve competitive advantage. Some of which include Global integration: It is vital for the IBM company to consider global integration strategy as its will ensure that it trades within the relevant framework of the global economy. Moreover, it would improve IBM’s potentiality of getting adequate access to new production ideas and assets that are considered important at every operational location through the world (Bäumer, Kreutter & Messner, 2012). Innovative strategy: It is also advisable for the organization to embrace innovative strategy with production of quality products beyond the ordinary customer’s expectation. A collaborative approach between customers and the organization dimmed importantly while coming up with an innovative product that would ensure total satisfaction of the parties involved (Bäumer, Kreutter & Messner, 2012). Strategy to should select to fix significant weakness Natural distributive strategy: The above is one of the IBM’s most important strategies that would ensure a quick fix to some of the organizational weaknesses. Since the organization has received numerous radical challenges, the adoption of radical, disruptive strategy would help in the transition of value positions and traditional delivery approaches thus leading to an improvement of different kinds of opportunities. Eventually, the organization should adopt a strategy that is a concern with production of genuine products without involving charity perceptions. Such a strategy would ensure would ensure more quality concern to the entire community through by means of actions and thoughts (Bäumer, Kreutter & Messner, 2012). IBM’s resources, capabilities, and core competencies Core competencies: Since its venture into the technological industry, IBM Company has maintained a distinct competency in research and development. The organization boasts of being the top most advanced companies spearheading technological advancement and transforming technological aspects into customer’s values. Since then, the organization has received an outstanding reputation as a center of global technological innovation. Moreover, IBM is recognized for taking chances in innovative aspects leading to success in different areas of technological infrastructure including network integration. In addition, the organization has ventured into an online commerce that finally led to the invention of the internet (Bäumer, Kreutter & Messner, 2012). On the other hand, IBM’s operations have been guided by the principle of competitive capability with customers satisfaction not only based on the sales of the product. It also after sales service targeted mainly through expert knowledge to help consumers solve technical problems that may arise after the sale of products. The above strategy helped the organization to improve on its returns by maintaining a good relationship with the customers. Other capabilities also included power performance of the organizational PC’s and rating descriptions that were high (Bäumer, Kreutter & Messner, 2012). With a lot of focus on dynamic capabilities, IMB has relayed a lot of emphasis on different resources mainly to achieve the best competitive advantage. For instance, the organization focuses on a stable human resource management that is mainly developed through stimulated recognition to aid the performance in the market. Besides, the organization is well-equipped source of raw materials for hardware manufacturing. It helps the firm to build a sense of opportunities while adjusting competencies and developing new capabilities (Bäumer, Kreutter & Messner, 2012). Value chain analysis The IBM’s value chain analysis is characterized by fully integrated network products and well-sophisticated machine with processing capabilities beyond the products of the rival companies. The above resource enables the organization to attain the highest profit margins than any other technological manufacture globally (Bäumer, Kreutter & Messner, 2012). Besides, the organization has put in place enough measures to govern the distribution strategy thus enabling the retailer within the organizational supply pool to get sufficient profits out of their sales. Ultimately, IBM channels its products through the following supply chain Value drivers who are mainly concerned about the value of the products Wholesalers that determines the organizational; products, quality and the best logistics to be used Retailers, who are mainly entitled to prices, choices, and guarantees where there is a need, finally, the organization requires business orders who share relative assignments similar to retailers. \ Conclusion The above report has given relevant clarification concerning IMB Company and how it operationalizes its strategies to achieve the best competitive advantage. Moreover, it has also explained about internal and external strengths environment of the organization through its strengths and weak including the value chain analysis. The ultimate objective of the above report is to highlight on possible weakness that IBM must put into consideration so as to achieve its future objectives. References: Top of Form Top of Form Bäumer, U., Kreutter, P., & Messner, W. (2012). Globalization of professional services: Innovative strategies, successful processes, inspired talent management, and first-hand experiences. Berlin: Springer. Plunkett, Jack W. (2006). Plunketts E-Commerce & Internet Business Almanac 2006: the Only comprehensive Guide to the E-Commerce & Internet Industry. Plunkett Research Ltd. Rothaermel, F. T. (2013). Strategic Management: Concepts. McGraw-Hill Irwin. Bottom of Form Read More