IBM at the Crossroads
Instructions
This assignment utilizes a case depicting a real-life situation of which you will conduct a detailed case analysis. This will involve reading the provided case, researching the company, identifying a problem/challenge and compiling three to five potential alternatives that could solve the problem. Finally, you will conduct additional research in order to determine which of the alternatives you will recommend, including your rationale and supporting research.
First, read the case study: “IBM at the Crossroads". You will use the Case Analysis Template to complete this assignment. This analysis should include supporting documentation as well as the financial statements of the organization.
It is expected that a minimum of three managerial tools be used including (but not exclusively) political, economic, sociocultural, technological, ecological, and legal (PESTEL), strengths, weaknesses, opportunities, and threats (SWOT), Porter’s Five Forces, balanced scorecard, gap analysis, root cause analysis and/or McKinsey 7-S Model.
In order to successfully complete this case study, you need to review the video and Task Learning Guides (TLGs) located below. This will provide you with the skills to research companies using scholarly research (Google search) and how to research industries/competitors. This is the basis for your external analysis and identification of the problem within the company. This will also provide supporting research within your recommendations.
Company and Industry Research
Transcript for Company and Industry Research
How to Find Company Information in the Business Source Ultimate Database (TLG)
How to Search for Articles with a Company Focus (TLG)
Your completed case study must be at least five pages in length. Follow APA Style when constructing this assignment, including in-text citations and references for all sources that are used. Please note that no abstract is needed. Utilization of the provided template will guide you through the case analysis process.
IBM at the Crossroads
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IBM at the Crossroads
Introduction
The case study “IBM at the Crossroads” shows how the International Business Machines (IBM) Corporation had been growing and expanding until Virginia Rometty’s tenure as the company’s chief executive officer (CEO) in 2012. Sam Palmisano was Rometty’s predecessor and introduced the business strategy with three complementary areas, including software, services, and hardware. During Palmisano’s era, he built expertise by acquiring small firms in the fields of data management, web commerce, and security. In particular, the company spent about $11.8 billion on 54 acquisitions, where 18 were service and 36 software companies between 2003 and 2007 (“IBM at the Crossroads”). Palmisano’s strategy raised the profit margins for IBM despite the increased competition in software and hardware. However, Rometty’s attempt to expand Palmisano’s strategy failed and made IBM decrease its revenues. The paper focuses on how increased competition in the technology industry has affected IBM as discussed in “IBM at the Crossroads.”
Organizational Background
IBM is a multinational corporation that operates in the technology industry. Indeed, Charles Ranlett Flint established the firm in 1911, which was by then called the Computing-Tabulating-Recording (CTR) Company. In 1924, CTR was renamed IBM (Reed, 2020). Currently, IBM has operations in more than 171 countries, and its headquarters are in Armonk, New York. IBM deals with multiple products and services, namely hardware, software, personal computers, consulting and hosting services, cloud computing, information technology infrastructure, artificial intelligence, cybersecurity, commerce, digital workplace, and data and analytics.
Situation Analysis
During the 2015 New Year’s Day, Rometty was in deep thoughts since the IBM performance was retarding, and the company had reported a tenth consecutive declining or flattening sales. The CEO knew that IBM needed urgent change in business strategy. If nothing was to be done, the company’s revenues would have dropped continually, causing a decline in the stock price. Eventually, IBM would halt its operations when it could no longer finance its daily operations.
IBM’s current or future organizational problems emanate from intense competition in the technology industry. There is no time that competition will not be an issue for a company operating in the technology sector. As such, IBM should know how to differentiate its products and services through invention and innovation to gain a competitive advantage.
The three primary competitors of IBM are Accenture, Hewlett Packard (HP), and Microsoft. Accenture competes with IBM in providing global technology and consulting services and generated annual revenues of $44.3 billion in 2020. The competition of HP with IBM occurs in cloud computing, servers, networking technologies, storage, client management solutions, industry-specific software, and mobility solutions. HP generated annual revenues of $56.6 billion in 2020. In addition, Microsoft ...
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