2. One of IBM?s problems is the operational conflict between its units, especially between the Personal Systems Unit, which produces PCs and workstations for one market, and the other units that provide integrated package solutions for a different market. The conflict in this case is due to the Personal Systems unit?s two functions:
Ø Selling products to the individuals market
Ø Providing other units with products that are to be used as components in integrated package solutions to be sold to organizations.
The Personal Systems market is very competitive with many PC producers getting their product on the market fast. An autonomy strategy would benefit the Personal Systems unit, which would be able to focus on its sales without losing time in coordinating with the other units. On the other hand, the other units would suffer under this strategy because they would lose a supplier of made to specification components.
Our strategic recommendation is that the units should operate as separate businesses, coordinating only when the performance of the individual units will not suffer. The Personal Systems unit produces standard products for an enormous market, so they should not waste time in adapting to the other units. When the other units require components they should buy them from Personal Systems. If these components are incompatible, they should adapt their package system or outsource (out of IBM) the components. The personal systems industry is very competitive because it is simple compared to integrated solutions, services, and products, with lower and decreasing margins. IBM will outsource low margin products and keep high margin integrated products in house.
3. IBM should further integrate the separate systems of its different vendors in order to have satisfied customers
4. IBM employees are experts in products, so they should strengthen ties with firms specialized in applications.
V. IBM vision and strategy of growth today:
1. Today?s mission statement:
?We create, develop and manufacture the industry’s most advanced information technologies, including computer systems, software, networking systems, storage devices and microelectronics.? It has two fundamental missions:
Ø Strive to lead in the creation, development and manufacture of the most advanced information technologies.
Ø Translate advanced technologies into value for its customers as the world’s largest information services company. IBM professionals worldwide provide expertise within specific industries, consulting services, systems integration and solution development and technical support.
2. Today?s objectives:
1) Build marketing for IBM middleware on NT with its channel partners.
2) Be the leader in market share by 1998 on the NT platform.
3. Today?s strategy:
Ø Continue to deliver solutions
-Cross industry
-IBM and partners
Ø Continue to deliver best of breed product
-IBM and partners
Ø Maniacal focus on customer satisfaction
3.1) IBM?s strategy of acquisitions. In 1995, IBM acquired Lotus Development Corp., and the next year acquired Tivoli Systems Inc. Services became the fastest growing segment of the company, with growth at more than 20 percent per year.
3.2) IBM Technologies, whose role is supplying advanced technologies, is currently looking for computer producers with whom it can form alliances. IBM and Dell were in discussions since June 1998 and the result is a strategic agreement worth $16.6 billion over 7 years for IBM. Under this deal they will share their competencies and technologies, and cooperate in developing future technologies. Dell will acquire IBM components for its computers, and database, network, and microelectronic technologies, and they will exchange a large array of licenses. Further areas of cooperation will follow. Dell?s general director says that a company can?t do everything alone. Dell?s share of the US market for servers jumped 95% in 1998 to 5.6%, making it the 5th. IBM is 1st with 30.5%.
3.3) In May 1997, IBM dramatically demonstrated computing potential with Deep Blue, a 32-node IBM RS/6000 SP computer programmed to play chess on a world class level. Deep Blue defeated Garry Kasparov.
World Chess champion.
3.4) In October 1998, IBM has created a division that could take advantage of opportunities for growth in the sale and service of guiding technologies, and would develop its relations with computer producers.
4. Today?s vision:
Nowadays, IBM?s CEO states it clear that the net is the future. The net has changed the way business is done and provides a great network of communication. According to Gerstner the net is ?a vocational medium-a place where real work gets done, real competitive advantage is gained, and real growth is generated. ? Indeed, with the Internet a company can increase its sales and profits. It can enhance communication between employees and thus provide a better internal environment. More than that, it can strengthen employees-customers relationships and better meet customers? needs. It also provides a fast and efficient way of doing business between partners in a supply chain. E-business can also provide an environment of customizable communications through which you better serve customer needs and reflect a good product image. That?s why IBM is getting more involved in e-business. For 1996 the top computer companies in the world were ranked:
1.IBM
2.Fujitsu
3.Hewlett-Packard
4.NEC,
5.Compaq.
VI. IBM in Morocco:
In 1939, IBM France launched in Morocco the first agency in Africa. Morocco was chosen because it represents an open door to Africa. IBM MAROC employs 85 employees and has almost 500 clients (ministries, banks, insurance companies, Al Akhawayn University, etc..). The main activities of IBM MAROC are to meet all customers’ needs, to provide high quality tools, and to create a structure that will guarantee high quality maintenance services.
IBM has two important strategies, which are:
à direct marketing: it means selling directly to the consumer through the mail, by telephone, or door-to-door. By having direct contact with the customer, the company knows what are the needs, the preferences, and then can effectively choose the kind of products it will sell in the Moroccan market.
à Commercial partnership: IBM has 22 commercial partners that sell its products in many different regions in Morocco. Thus, IBM MAROC is not obliged to create agencies in many cities, rather, its products are sold with other firms’ articles, which increases the competition.
31d