Strategic Planning: International Business Machines

Name Instructor: Course: Strategic Planning & Operational Analysis Date Written Case #2: International Business Machines (IBM) Background International Business Machines Corporation is an integrated information technology (IT) company offering consulting, delivery services, implementation services, financing solutions, systems solutions and enterprise software solutions. IBM is headquartered in the U.S., but also operates globally. IBM faces intense competition, while the management has focused more on short-term growth revenue even as more investments in R & D would improve the company innovativeness and competitiveness in cloud computing, consultancy and big data analytics businesses segments. Major issues facing IBM Short-term problems While International Business Machines (IBM) is one of the earliest computer technology firms, the company has been losing its market share over years because of short-term, long-term problems and challenges. The main short-term problem is that IBM emphasizes short-run growth, which has resulted in the earnings per share rising without improving competitiveness. The technological has changed rapidly in the past two decades yet IBM has lagged behind for failing to focus on strategic sustainability and long-term technological innovation. while short-term performance signals to investors that future performance will likely be better, IBM has failed to plan for the future as there are declining revenues, higher debts and declining capability related to off shoring and failure to invest in innovation. Long-term problems IBM has failed to address top- line growth as there is more emphasis on cash generation and even share buy-backs are increasingly financed through debts. Additionally the company’s technical competencies are inadequate while the management identifies gadgets that are most likely to improve the share price without considering long-term competitiveness. Denning pointed out that IBM spends less than 10% of long-term investments as part of selling, general, and administrative expenses (SG&A), indicating that innovation is not highly prioritized by the management (Denning ). Even when IBM has invested billions of dollars has at times been share buybacks, while IBM is relying on cheaper technical ‘expertise’ more than ever before especially from India and even American workers can be laid off because there is culling of staff to a predetermined level regardless of the employees’ performance (Denning). IBM’s major businesses and components an d SWOT analysis IBM’s major businesses and components include the global technology services and global business services (global business, hardware, software and global financing (Sharwood). Global Services is necessary to provide solutions to clients, IT infrastructure as well as business insights. This extends to various software and systems targeting businesses and individual users. Global Technology Services focuses on IBM’s traditional IT services like database management and outsourcing maintenance and global business services that provide customized IT solutions (Sharwood). IBM has merged Global Technology and Global Business Services will be part of IBM Services (Denning). global technology services support the business ...