History Of The Ibm Corporation Commerce Essay

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IBM is an international computer software, hardware and services company. It was headed by John Akers since 1985 until 1993 when he was replaced by Louis V. Gerstner, Jr. The company went through a workforce of about 407,000 in 1986 to about 300,000 by 1992. The company registered a drop in its earnings for the first tie during Akers leadership and this trend went on and created so many problems for the company until he was forced to step down in 1993. The company was seen as a ruthless giant with very tremendous growth. It was singled out by the government and the entire industry or criticism on very many occasions. As a result of this it attracted anti-trust legislations. Once the personal computer industry started to boom, the company lost out. It later came to find out that the old paradigm system of closed priority that was applicable to mainframe business did not apply to PCs (Zschech, Whelam & Mikolajisck, 2005, p. 32).

The company aims at practicing what it preaches. Its early support of a fully automated process like order management, OEM manufacturing orders f work and service request has been very helpful in improving the satisfaction of the customers and its operational efficiencies. According to Schwlbe (2009), the company has however also remained committed to its improvement over time through the intelligent use of new technologies. It also aims at becoming a fully automated enterprise model using some of the most advance d practices and solutions. Ideally the company defines the next level of efficiency in business process as an on-demand form. "an enterprise whose business process can respond with speed to any customer demand, market opportunity or external threat." (p. 32). Such a model needs a seamless end to end process of business integration of the internal systems of the company while also going into the key suppliers, partners and customers.

IBM is the largest provider of rental and financing ($2B), hardware ($24B) and IT services ($47). It conducts business in a total of 170 countries and has about 329,000 employees. It also provide data storage devices together with enormous and secure database. It provides the most powerful computers and has been the pioneer of new and effective technology like the silicon and so on. The mission of the company is to find solutions the problems of its clients using the most advanced information technology. Some of its clients include special businesses, individual users, and institutions like governments, spatial, defense and educational organizations. To meet the needs of the many customers the company has, it manufactures and develops, most of the advanced technologies of the world. These range from computer software, and systems to storage devices, networking systems and microelectronics (Zschech, Whelam & Mikolajisck, 2005, p. 42).

Some major competitors in the industry

The Information technology industry is the fastest growing industry in the world over the past decade. The industry has come along way but has now become more robust than any other industry in the world. More than any economic facet or industry, it has increased productivity mainly in the developed world and therefore become a major driver of the economy. According to Hensch (2004), economies of scale and demand from enterprises and customers characterize the rapid growing IT sector. Both the hardware and software that is involved in the IT industry include the computer systems that are produced by companies like IBM and its competitors (p. 11).

Dell Computer Corporation Company is one of the major competitors of IBM. Dell is a major manufacturer of computer peripherals, personal computers, and software just like IBM. It is among the best and leading computer producers of the world and sells its products directly to the customers through mail order catalogs and the internet rather than the retail outlets like most companies do. The company shares ideas about the design of its products through effective collaboration. This has resulted to production of products that are customer related (Schwlbe, 2009, p. 56).

Hard drives are among the best products produced by Dell and therefore giving it an edge over its competitors. It makes use of very excellent technology in the creation of various kinds of hard drives. According to Fossler (2008), these drives are so adaptable compatible with most of the needs of very many clients. Dell makes sure that the needs of the clients are given enough attention before the creation of its products (p. 11). Its monitors are also among the very best in the industry because of the clear graphics they give. This offers enough satisfaction to the clients gets rid of any problems that might be encountered while using the monitor.

Apple Computer Inc. also poses a major threat IBM company. This company was found in 1976 and has revolutonalized the PC industry and epitomized the coming up of a clean industry in the New West. The first product of the company was the Apple I which is a single board computer with an onboard ROM. This sold for only $650 dollars at it so the company getting so many orders (Quatrani & Palistrant, 2006, 57). It was then followed by Apple II that now comprised of a keyboard and color monitor. The introduction of the Macintosh by the company was the greatest step and the greatest threat to most companies including IBM. The |Macintosh is widely used by graphic designers and major companies but it is not common in homesteads because of the high prices. This therefore gives IBM an upper hand because of its low prices.

Intel Corporation is also another company that is actively involved in the IT industry and it is consider to be the best producer of integrated circuits and microprocessors. It is the investor of the microprocessor which is used to power personal computers. Most of the computers use Intel microprocessors. It also makes computer network products, servers, memory products and supercomputers (Fossler, 2008, p. 30).

Despite all this competition, the IBM Company is trying everything possible to keep an advantage over the rest. One of the key strategies is maintain a good relationship with its clients and offering great products but a reasonable price so that most of its customers can be able to afford the products. Moreover, there are various promotional materials used by the company to ensure that the clients get familiar with the kind of products produced (Hensch, 2004, p. 26).

Porter's five forces model

Bargaining power of suppliers

IBM Company has really no bargaining power over its suppliers since it has business to business agreements and contracts over the suppliers. This makes switching of the suppliers very expensive and therefore unthinkable for the company. The contacts are biding agreements between the company and the suppliers and going against them can be very expensive and damaging to the company. According to Quatrani & Palistrant (2006), the company is therefore forced to abide by the stipulations of the construct until the agreed period is over. However, changes could sometimes be made but only through mutual consent of both parties ie the company and its supplier (p. 7). AMD and Intel are two of the greatest suppliers of processors in the world and they have enjoyed this monopoly of the market for quite some time. The cost of switching the suppliers is very huge and therefore leaving IBM with no alternative other than maintaining the same suppliers.

The buyers bargaining power

On the other hand, the buyers have a very strong bargaining power over the company because the IT business has developed so much over the recent time. There are so many small and large companies that are competing with IBM. As illustrated above, there are very great companies that are equally successful like IBM with examples like Apple and Dell. Remember these are only but a few huge companies. We also have small industries that still produce cheap computers. According to Zschech, Whelam & Mikolajisck (2005), this bargaining power influences the company quite a great deal. It shows that the company is doing great in serving its clients and that's why they keep the loyalty. Moreover it also helps in determining how globally known the company is (p. 67). To maintain the high bargaining power of the buyers, the company ensures that the clients are concentrated and also maintain a few buyers in a significant market share. The reason as to why the buyers bargaining power is high especially in UK is that they did not concentrate to one firm and also the lower cost of switching buyers is also low. There are also many choices of products like Dell, Apple etc


The IT technology is very much differentiated from many other products and this means that the threat of substitution is are minimal or non existent. However substitutes have a very great influence on the company because they can make it lose most of its clients. It is therefore very important to ensure that substitutes do not give it much problems. To keep of threats from substitutes the company ensures that it produces products of very high quality so as to satisfy the needs of the clients and most of all are of better quality than the substitutes. This has kept its clients maintaining a very high level loyalty (Price, 2007, p. 9). The kind of services it provides are also high considering that it incorporates the needs of the clients in the production of its products.

The threat of entrants

Threats of new entrants are also weak because the processes of discovering new technologies is original and venturing into this same business by another company is very expensive. This could be seen by how many renown companies exist. Although there might be other small companies especially in countries like India and China, the customers are known to be brand loyal and therefore maintaining to the same company considering that it has established a great reputation (Schwlbe, 2009, p. 76). IBM has been around for quite along time and therefore it is not very much affected by the new entrants. Although influence of potential entrants might be weak, the company does not take chances and therefore it maintains a low cost for unit production. This helps in ensuring that the new entrants don't have a great advantage over it and snatch away its clients. On the same note it produces high quality products that keep the clients coming.

IBM spent about $171 million in its system technology in 2005 for server product. in addition it also spent over $1 billion in the acquisition of the Linux operating system in 2001 as stated by Hensch,2004. This just indicates how expensive it is for any company to get involved in the IT industry and therefore this keeps off most companies (p. 77).

Competitive rivalry

Rivalry in the It industry has been on the rise because of the many It businesses coming up in the market with new technology that is slightly different from that offered by IBM. The company tends to focus so much on competition. To ensure that the company gets an advantage over its competitors, its employees offer business from their heart and make sure that the clients are satisfied. This also ensures that the company maintains a good relationship with its clients which gives them an advantage over the rivals. By 2003, the server market rivalry had become so intense throughout the world. Some of the competitors include HP, Dell, Sun Microsystems and Fijitsu Siemens Computers (Franz & Sarcina, 2009, p. 60).

The quality prices offered by the company is also another strategy for overcoming competition. The prices are very much reasonable and therefore ensures that the clients can be able to afford whatever they would like. However, this does not mean that the products are of low quality. The company ensures that it dos not compromise on the quality of the products just to lower its prices. The quality remains that great as usual. More over, there are very many promotional materials the company uses to keep more clients coming. Advertisements through the internet is just but one of them (Fossler, 2008, p. 89).

Considering the above five forces, the IT industry could be considered profitable because the desire for IT equipment is growing each and every day as people continue to embrace it. Similarly there are also not very many companies involved in the business in comparison to other industries like clothing industry for example. As it is illustrated above you find that only one or two companies are involved in the production of a certain product like say the processor. According to Franz & Sarcina (2009), This means that these companies will enjoy monopoly for as long as they exist before any company thinks of entering that field which is unlikely considering the amount of money requirement (p.91).

Internal analysis

Firm infrastructure

The IBM supply chain is becoming more complex day by day and also harder to manage in addition to becoming more expensive. This means the company is spending more than it used to. For instance it spent $3.4 trillion on the supply chain in 2005. Expenditure has definitely increased by now. The company has been forced to set up a supply chain management outsourcing practice for business information. These solutions are intended to help the company to improve customer services and its costs. Similarly it is to reduce the supply chain inventory in totality (Price, 2007, p. 39). In 2006, it enabled companies in It to come up with an end to end process, analyze the execution in the real time alongside given goals and make the necessary adjustments. For example the company offers consulting services to simulate and monitor various business processes in addition to providing the clients with a real-time analysis of the current IT systems as they are.

Organizational structure

The sales and distribution group is charged with the responsibility of ensuring that the products reach various customers apart from ensuring that the clients are aware of the current product sin the market. This is also involved in the promotional activities just to increase the sales. The innovation and technology group is involved in various research projects to help the company come up with new and better technology that will help satisfy the clients needs. Other departments include Global business service, software group, integrated operation group, system and technology group, and global technology service (Ghetie, 1997, p. 71).


According to Price (2007), the incorporation of HRM has helped the company to eliminate overhead structures and redundancies to drive productivity. It has also increased its capacity to innovate through providing greater clarity on the key areas of priority around the shared objectives and goals and even lead to greater focus of the entre company in terms of learning, sharing and development of information. This integration has seen IBM acquiring various companies to improve their capabilities (p. 28).

The technological development in IBM differentiates it from its competitors. The company spends around $5-6 billion every year only on research and development. This includes capitalized costs of software and focused investment in opportunities that are high growth. The company has registered some of the best technologies in its accounts that have created a great change in many business operation through very huge amounts of data that is transferred throughout the world.

There are various business partnerships that the company has come up with, best on the SCM solution provider. Their solutions put together with the products and services of IBM help deliver stable, cost competitive, and secure infrastructure that is vey much needed by the customers. According to Ghetie (1997), the company has acquired companies that are service related into the global service segment. For instance we have data storage and transferring, network solutions and mainframes among many more (p. 76). It has also acquired companies that are software related and which were which were integrated before in the software segment.

The company's manufacturing, supply, logistics and customer fulfillment operations are now integrated into one operating unit. This has helped reduce inventories, converted fixed costs to variable costs and improved the response to the opportunities for the market place and external risks. The feasibility IBM was acquired after the company faced a huge flexible competition form Compaq in 1982. This has now made IBM to posses almost the first position in the market.

The company realigned its organizational and operational structures in 2005 in Europe to give delivery and sales teams a greater authority, flexibility and accountability to make best decisions and execute them more effectively on behalf of the many clients it has. The company at one point broadened its services to Asia so as to increase its sales. This has enabled the company to make so much profit especially in the far and Middle East Asia that includes some of the quickest growing economies like India, China, Hong Kong, Thailand, and Singapore and so on (Ghetie, 1997, p. 103).

The services provided by the company to the clients are information and technological services. It also invests in various businesses to enable its clients to improve in terms of innovation. This is a very profitable and high value process. Other services that IBM provides I addition to those mentioned above are minicomputers, middleware services, server services, security and privacy, mainframe storage, mainframe communication, business consulting services and soon. Generally the services provided by IBM can be categorized into three.

Services that are more IT offering like integrated technology services, strategic outsourcing and hosting

Delivery of IT infrastructure

Offerings that are aimed at transformation and business value that is high ended.

Pestal analysis

Political factors

No company can survive without paying enough attention to the political situation in the country. This is important for the company to earn respect and a trust from its clients. The heavy taxation in UK has had a very negative influence on the IBM Company especially on the server products. This increases weakness to the price factor because the company can not go at a loss. It is forced to charge a little bit higher that it could have charged if the taxes were lower. The most affected is the premium price for the company's products. Increase in the taxation will mean that the company will have to spend more in its production and operational expenses. For instance if the company is charged more for investment credit, this will translate to high expenses at the end of the day and therefore the company will have to charge more to make some considerable profits.

Political stability will also affect the cost of doing business in various ways. For instance it will be difficult to acquire and transport the spare parts required in the production of this machines considering that the parts are obtained from various companies. For instance you would not transport these parts by road when there are confrontations in various locations within the country. According to Hensch (2004), this will mean that the company has to transport by air since this is somehow safer than road. This will add to the expenditure cost and therefore the company meaning that the company will have to use more money in the whole production process (p. 85). The security could also be threatened by the outcome of elections especially if vote stealing is involved. This will also lead to more expenses.

Economic factors

The company enjoys a good market for its products and services considering that there is a healthy economic environment with stable and strong GDP in all the regions. The increase rate in GPD is not that fast but the stability in the economy balances this disadvantage. The service sector of the whole world contributed to about 73.4% of the GDP in 2006. This indicated that the service market's high value is the world has matured and the experience of the customers on the services would be somehow difficult to satisfy (Price, 2007, p. 41).

According to National Research council(US). Board on telecommunications and Computer Applications (1981), the exchange rates of currencies can be influenced by economic policies, international agreements, and even the international economic conditions. In instances where these conditions raise the dollar's value, the US firms may find themselves disadvantaged in terms of competition inn the international market. This might lead to the customers in America buying products from abroad so that they can feel the pain of high prices within the country (p. 21).

On the other side, when the dollar is strong, most American manufacturers normally locate most of their products abroad. They also make most of their purchases from abroad because it is cheaper that way than the domestic market. The changes it the exchange rates are very disadvantageous to the company considering that they are very unpredictable. You could never know what the exchange rate would be tomorrow and this leaves the company in a dark zone. It would be better if the company could understand what the situation would be in future so that it could make appropriate adjustments. Although most companies are now trying to predict through their learned economists, it is not usually 100% satisfactory.

Information technology definitely would require the use of energy to run the machines. If the energy costs are high, them most people would tend to use machines that would consume more power and stick to using energy for most essential services like cooking and lighting. This will therefore mean that very few people would purchase the products form these companies. On the other hand, the companies producing these machines also need energy in their production. Increase in the cost of energy will mean that the company reduces the rate of production so that it does not spend much. Alternatively it would produce in mass and sell at a little bit higher prices so that it could reduce the average cost. The problem here is however that you are not guaranteed of market.

An economically stable economy will also be advantageous to the company in the sense that most people will be able to afford its products. Unlike in poor economic times where families will reduce its expenses and spend only on the most basic needs, a good economy will; mean that they will have the chance to buy some of these equipment that might be considered luxurious. This will be advantageous to the companies because they will be able to sell more. It is important to consider that it's not only the economy of the domestic country that affects the company but also the economy of other countries because buyers of these products come from various countries throughout the world.

Social cultural factors

Some of the social values that might affect the profitability of the company are social values, tradition, trends and religious practices. Social values are those beliefs that a society tends to hold towards a certain issues. For instance in the US some of the social values include individual fairness, freedom and equality. In the business sense, the success of the company will definitely be affected by the ability, energy and ambitions of the ones success. If a populations sees that the company is undermining the rights of a certain group, you might find that most people would boycott the products. According to Monczka, Handfield & Giunipero (2008), this happens mostly in cases where the rights of the employees are interfered with or the health of the neighboring population is affected. In such a case, populations tend to act in solidarity and avoid these products (p. 73).

The company should therefore ensure that it does not infringe on the rights of people as well as keep the health of its users in mind. A good example is that CRT monitors have a bad effect on the sight of its users. This therefore has led to most clients going for TFT monitors to avoid poor eyesight. Companies should therefore tend to focus more on the production of LCDs and TFTs since they are friendly to the user's eyesight. Similarly the company ensures that its products are safe for customer use and it does not use dangerous chemicals. There has been a problem raised by third world countries that the developed world dispose of most of their computers into counties like those in Africa. These are considered hazardous to the people's health. Is case a company is linked to such acts, it will definitely face some resistance from such countries.

According to Pugh (1995), the population of internet users as by 2006 was 37.6 million. This number has now more than tripled according to the CIA records. This is an indication that the need for the products of these companies has also more than tripled because most people now own computers with the developed countries taking the leading role (p. 67). In the current time, most of the students in colleges and universities own their own computers and laptops for research and social purposes. This has increased the demand fro computer products which is advantageous to the company.

The social traditions also define most of the social practices that have been in existence for quite along period of time. For instance families tend to spend more during occasions like Christmas with the buying of gifts and luxuries. Similarly, the company also would sell more at such times where the families spend more (Monczka, Handfield & Giunipero, 2008, p. 99).

Technological sector

A survey conducted by CIA in 2007 indicated that there were about 6,064,860 internet hosts in 2006. Similarly the internet provider in 2000 were about 400. This number has increased steady through time and now there are over 800 internet providers. In such a sophisticated market the competition and opportunity would definitely exist together (Pugh, 1995, p. 89). For instance most of the youth and even the young adults are always on the social sites like face book and twitter. Similarly most of the students are given assignments in school of which they are expected to use the internet for their research. This has increased the number of internet users a very great deal. On the same note, the number of computers and service appliances have definitely increased. This ahs led to more sales by the companies. However the completion of these products has also increased a great deal.

The technological inventions have also increased and this has led to introduction many new products into the market. According to Zysman & Tyson (1984), this has caused a lot of completion meaning that every company has to pull up it socks and produce the best products for the customers to choose them over the rest (p. 35). With such, new products are emerging n a daily basis with improvements than the previous ones. There are also many research projects begin conducted in various institutions and with various scientists. All these research procedures normally require the use of IT at one point or the other. This has therefore led to the demand of products from various companies including IBM.

Environmental factors

Looking at the environmental dimension, IBM Company made use of some of the major technologies like tracing the weather throughout the world. This is the company that made computers for NASA for the astrological activities that even made it to set up a satellite in the skies which is now used to monitor the changes in the environmental conditions. This si a very great achievement considering that environmental factors have a very huge on both agriculture and the lives of every human being. The company has also involved some environmental saving strategies that not only save the environment but also the energy cost (Pugh, 1995, p. 130).


The major legal constraint for the IT companies is usually the cyber protection by various government arms. According to Price (2007), there are various strict laws and regulations that a person has to go through before setting up a cyber. This has made most people give up and therefore they wont buy products from the IT companies (p. 71). Similarly, the taxes that you have to pay for are also so much. The chemicals that are used in the production of the products involve silicon, germanium and carbon. These chemicals are not only unfriendly to the environment but are also very expensive to find and this makes the company to strain more.

SWOT analysis of the company


The diverse portfolio of IBM's products and offering is designed in such a way that it gains market share in both weak and strong economic climates. The company makes sure this is possible by offering products of very high quality and competitive. It also has a effective and skilled resource base that ensures continuous production of high quality products. IBM's portfolio of capabilities range from software, hardware, Business performance transformation services, financing and so on. These capabilities are put together to provide solutions within the computing space of the enterprise. The technology employed by the company has always been a very huge strength because of its uniqueness. It is used to come up with new products and also improve on the products that had problems before (Bohm, 2009, p. 34).

The internal control structure of the company is also very effective. In fact it always comes up with new software solutions that are used to provide the best solutions to the clients. It also maintains a great and effective internal control structure which consists and clearly defines the responsibilities and delegations of various authority and these are supposed to be adhered to for better running of the company. According to Bohm (2009), the company always makes sure that it responds to all the needs of the clients in the best way possible to ensure that the client gets a full worth of his money (p.42).

The suppliers of the company are always the best in the business. This puts the company ahead of the rest because it ensures that the products produced by the company are of the highest quality. The suppliers are well chosen and therefore the company is sure of getting the best from the best suppliers. The end result will definitely be the best products. The organizational culture of the company gives it enough motivation to produce the best products. There is good relationship between the employers and the employees and also amongst the employees. This ensures that the workers are able to share ideas and help one another in various circumstances which ensure that the company achieves success (Dealtry, 1992, p. 45).


The company being this large, it is sometimes very difficult for it to react quickly to sudden changes. This would definitely slow down the rate of production and it might cost the company dearly. According to Dealtry (1992), with the magnitude of the company, it needs to spend so much money in various departments for it to run smoothly, sometimes money is not always easy to come buy and it may put the company in problems. Similarly, any damage in the production means that the company has to spend so much to repair or install a new one (p. 65).

Since the company has to keep up its technology, it spends so much on research and development. This puts the company at a risk because it also needs to sell more for it to make some considerable amount of profit. In stances that the research fails, the company will have gone at a great loss. The company's suppliers are also very few. This puts its competitors like Dell at an upper hand because they are wide spread in various places (Bohm, 2009, p. 56).


The company has the capacity to integrate across its various portfolio to come up with the best solutions to its global client base. In this way, it will be able to make more profits and over a long period of time which is beneficial to the company. The company also has the chance o invest in technologies and strategies that have the best growth in the long run in addition to the high profits. This way, it can transform itself to make good use of the advantage of shifting demands (Dealtry, 1992, p. 69).

Another opportunity for the company is that it can invest more in it practices to provide the best services to the company which will ensure that it earns more profits. According to Bohm (2009), this might be through more research processes or even through collaboration with other companies in the same field. It can also move into other areas of IT that have not been fully exploited such as investment in R & D. similarly it has the opportunity to open up into countries where it is not fully established like Brazil (p. 67).

Considering that the company has only a few competitors it has the opportunity to become the best and establish a monopoly in the industry. According to National Research council(US). Board on telecommunications and Computer Applications (1981), the internet is one such area that it can invest in because it is growing at a very fast rate. The wireless market is also very profitable considering that it is very efficient to the clients. An investment into this sector would see the company make enough profits (p. 43).


There are many competitors in the IT industry and this poses a threat to the company because the clients have a good number of choices from where to buy their products from. The competition increases pressure pricing and this might cause the company to sell it s product at a very low prices so that the customers can buy its products. Some of the small companies like Compaq also cause so much threat to the company. According to Bohm (2009), the customers also have very high expectations of the kind of products they need and this puts the company under pressure. Having been in existence for quite sometime, clients would expect nothing but high quality products from the company (p. 73).

IBM has a very high switching cost in terms of core hardware meaning it has to bare with the one it has despite the problems that might arise. The high spending the company involve in also poses a threat to its future existence. IBM can also barely have any substitutes considering that there are very few substitutes (Dealtry, 1992, p. 91).

Strategic issues

These are aspects which affect the strategic charges within IBM management. They include the interests and expectations of the stake holders, owners private/shareholders profit, direction, performance, government taxation, employment rate, pay rate of on managerial staff and so on. It is however important to note that, the manner in which the company is behaving is not environmentally sustainable (Price, 2007, 121). It causes irreparable negative changes to the planet. The rise in the prices of energy and other levies imposed by the governments on carbon production has also impacted negatively on the cost of doing business. This has been the major factor in making most businesses economically unsound since they go for cheaper sources of energy.

According to Brown, Craig, Hester & Pitt (2003), it is important at this point in time for most companies to act in environmentally sustainable manner so as to fulfill both the moral and legal obligations (p. 24). Environmental change has become the talk of the town and any company that cares for the health and needs of its clients should give priority to environmental protection. This however also enhances the brand and improves the corporate social image for the company. IBM is very much concerned with environmental protection in the sense that it is trying as much as possible to come up with cleaner ways of production. The products for this company are used in various places throughout the world and a solution to this would have helped a great deal.

The company has already on the green and save energy cost campaign which is worth so much money. From the company's environmental strategy, the company has been able to save 40% of energy which could be used by another company and therefore reduce emissions into the environment. Other companies should also follow this idea and this will be a great step in saving the environment (Monczka, Handfield & Giunipero, 2008, p. 74). Apart from the strategy begin eco-friendly, it has enabled the company t save so much money in terns of energy consumption. Considering that the more energy the company uses, the more money it spends, this has gone along way in reducing its expenditure.

Considering the BCG matrix the company should invest more for it to earn more in future because it will have established a huge client base. Some of the investment strategies might include making good use of innovation on the improvement on the business performance or even acquiring many more businesses. According to Zysman & Tyson (1984), there are several pros and cons associated with this. First and foremost the company will be able to come up with better leadership strategies in order to maintain its ever changing business. This is actually done by focusing on solutions that are based on high value innovations and services that constantly generate high returns on the invested capital (p. 105). The company is able to make use of its entire portfolio: hardware, software research and technology to maintain good leadership.

According to Brown, Craig, Hester & Pitt (2003), with the broad capabilities, diversity and expertise of the company's global work force and the large network of business partners and suppliers, the company will be in a good position to make good use of all the priorities that might be presented by the client's needs and the current economic trends of the society (p. 50).

However incase the strategy does not work well with the company, then there will be disadvantages associated with it (Zysman & Tyson, 1984, p. 67). The company might find itself spending so much money for nothing. This is why it is important to critically way out the options before settling on the specific strategy.

According to Quatrani & Palistrant (2006), acquisition of a new business would be advantageous to the company in the sense that you find a company that is already running. This means that it has undergone all the pressure that normally accompany a new company and it is now established in the market. Although might not guarantee the company success, this is a big step in the continued development of the organization (p. 15).

However the greatest threat with this is that you buy also all the problems that the company is facing some of which the seller wont tell you. This is like buying a used car. It is not always perfect like a new one would be. You might find that the company uses more money in the improvement of the company than it would have used to start up a new one (National Research council(US). Board on telecommunications and Computer Applications. 1981, p. 67).

Implementation and change

The biggest threat that the company should be aware of is global recession. This is a problem that has caused some of the greatest and well norm companies like the Lehman brothers to collapse (Brown, Craig, Hester & Pitt 2003, p. 131). It therefore calls for the company to find strategies that will help them overcome such. One of such strategies is conducting prior survey so as to understand when the recessions likely to happen and reduce its staff or reduce other unnecessary expenditure.

All in all the future of IBM company looks bright as long as it adheres to the right procedures of doing business as it has always done. Competition should no discourage it but instead make it grow stronger by finding better alternatives to counter the opponents.