Strategic Management (MBSA 1213)
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Added on 2021-06-07
Strategic Management (MBSA 1213)
Added on 2021-06-07
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INTERNATIONAL BUSINESS SCHOOLStrategic Management(MBSA 1213)FINAL EXAMINATION:IBM STRATEGIC PLANNINGNUR SYAZANA (MBS 1001)LecturerDr. Shathees Baskaran
Table of contentVision and mission statement of IBM........................................................................................2External Analysis: General Environment...................................................................................4Justification on General Environment External Analysis..........................................................6Industry Environment Analysis: Porter 5 Forces.....................................................................10Competitor Environment Analysis...........................................................................................11External Factor Evaluation (EFE) Matrix for IBM..................................................................13Strategic Group Map................................................................................................................14Competitive Profile Matrix (CPM)..........................................................................................15Capabilities, Core Competency and Competitive Advantage of IBM.....................................16Internal Analysis: Strengths and Weaknesses..........................................................................17Justification on Strengths and Weaknesses..............................................................................18Internal Factor Evaluation (IFE) Matrix of IBM......................................................................23Value Chain of IBM.................................................................................................................24TOWS Matrix...........................................................................................................................27SPACE Matrix..........................................................................................................................30The Boston Consulting Group (BCG) Matrix..........................................................................32Internal External (IE) Matrix....................................................................................................33Grand Strategy Matrix..............................................................................................................34Summary on Strategies.............................................................................................................34Quantitative Strategic Planning Matrix (QSPM).....................................................................35Long-term Objectives...............................................................................................................37Annual Objectives....................................................................................................................38Corporate Level Strategies Formulation for IBM....................................................................39Porter's Five Generic Strategies...............................................................................................431
Vision and Mission statement of IBM According to the case study, as in 2015, there are no official vision and mission statement ofIBM on its website. Nevertheless, based on my findings on IBM website(https://www.ibm.com/ibm/ke/en/examples.html) on 15 December 2017, there is a statementfound that seemed to be its abandoned mission during the 2003 statement which is “at IBM,we strive to lead in the creation, development and manufacture of the industry's mostadvanced information technologies, including computer systems, software, networkingsystems, storage devices and microelectronics. And our worldwide network of IBM solutionsand services professionals translates these advanced technologies into business value for ourcustomers. We translate these advanced technologies into value for our customers throughour professional solutions, services and consulting businesses worldwide.”. However, there isno vision statement of some sorts to be found in its website. Vision and mission statementsboth serve purposes of putting the company in clear direction as the statements provide clearcompany’s goals to all its employees, which later act as important key priorities for them toconstruct effective strategic planning. For vision statement, there are 3 elements should be considered which are:1.What the company wants to become in the future?2.The type of business the company is in.3.Constructed in one sentence, preferably.Thus, the proposed new vision statement for IBM is, “to be the world leader in informationtechnologies manufacturer and developer”.For mission statement, which officially IBM does not have, there are 9 components to beconsidered in creating a good mission statement which are:1.Customers4.Technology7. Self-concept2.Product or services5.Survival, growth &profitability8. Public image3.Market6.Philosophy9. EmployeesApart of that, it should be inspiring, broad in scope without any numbers included and isfewer than 150 words. If I were to consider the unofficial mission statement of IBM mentioned which is “at IBM,we strive to lead in the creation, development and manufacture of the industry's most2
advanced information technologies, including computer systems, software, networkingsystems, storage devices and microelectronics. And our worldwide network of IBM solutionsand services professionals translates these advanced technologies into business value for ourcustomers. We translate these advanced technologies into value for our customers throughour professional solutions, services and consulting businesses worldwide”, and compare it tothe mission statement elements, the elements analysis results are as following:1. Customers4. Technology7. Self-conceptNoNoYes2. Product/services5. Survival & growth8. Concern for public imageYesNoNo3. Markets6. Philosophy9. Concern for employeesYesNoNoThe proposed new mission statement for IBM is:“We strive to create the most advanced information technologies (IT) devices, systems andsoftware [2] to IT users [1] from all around the globe [3] through our broad network of IBMprofessional solutions, services and consulting businesses [7]. By using advanced technologyin our creation [4], we prioritise our business growth and sustainability [5] to further forgeour philosophy of “Innovation that matters—for our company and for the world” [6] thathelps making the world better for the community [8] and as a way to appreciate ouremployees [9]. (90 words)3
DemographicEconomicPolitical/legalSocioculturalTechnologicalGlobalPhysicalOpportunities1.Asia has best growth rate in IT2.Potential market growth on emerging market countries3.IT and managementconsulting high growth in US1.Growth in business of data2.Worldwide growth of software business3.Cloud computing high growth percentage4.High-end server business is less prone to commoditization1.Fast growth of use of data and the informationthat can be derived from data.1.UKhighlightedtheimportance ofworkplaceequality2.Establishmentof gay-friendliness index for company 1.Smartphoneapps furthergrowth2.Increase in developmentof IT infrastructureby other business companies3.Social mediarevolutionNotmentionedin the case.Notmentionedin the case.Threats1.Europe debt 1.Reduction of 1.PrivacyNot mentioned in1.New super-NotNot4External Analysis : General EnvironmentElementExtrnal Analysis
crisis 2.Costly labour force for software industry.price due to highstandardisation of computer products 2.Increase demandin tablet and smartphone3.Low entry barrier of the industry4.Slow growth between 2015 and 2017 for IT consulting, IT outsourcing and IT hardware supportconcernsfrom thepublic2.Legalissuesagainst bigdata usage3.Privacyrisk threat4.Piracy orcopyrightriskthe case.computer technology innovation by HPmentionedin the case.mentionedin the case.5
Justification on general environment external analysisOpportunitiesDemographic2.Asia has best growth rate in IT As per IT growth by geographic region, Asia has experienced the best growth rates of late, with China up 7.7 percent, Indonesia up 6.2 percent, Vietnam up 5.0 percent, and India up 3.2 percentin 2012. (Page 8, paragraph 3, line 1)4.Potential market growth on emerging market countriesAccenture has seen the U.S. market grow at an annualized rate of 13 percent in revenues from 2011 to 2013, but continues to focus on emerging markets, especially Brazil. (Page 7, paragraph 7, line 7)6.IT and management consulting high growth in USIncrease in growth for project-based of IT (Page 8, exhibit 6)Economic1.Growth in business of dataThe business of data analytics, data storage, and security are growing. (Page 9, paragraph 2, line 1)2.Worldwide growth of software businessSoftware is a growing business worldwide, and....(Page 7, paragraph 5, line 3)3.Cloud computing high growth percentageCloud computing clearly dominates future expectations. Some analysts in fact predict over 80 percentof all IT growth between 2012 and 2017 will be cloud related. (Page 8, paragraph 1, line 6)4.High-end server business is less prone to commoditization For example, IBM acquired SPSS and Cognos (data analytics software) in 2009 for $1.2 billion. IBM plans to keep its high-end server business, which is less prone to commoditization by other firms’ products. (Page 1, paragraph 7, line 6)Political/legal1.Fast growth of use of data and theinformation that can be derived from dataThe use of data, and more specifically the information that can be derived from data, has grown faster than our legal systems can keep up. (Page 3, paragraph 2, line 3)6
Sociocultural1.UK highlighted the importance ofworkplace equalityIn recent years, IBM UK has ranked first in Stonewall’s annual Workplace Equality Index for United Kingdom (UK) employers. (Page 3, paragraph 2, line 4)2.Establishment of gay-friendlinessindex for companyIBM provides same-sex partners of its employees with health benefits and provides an anti-discrimination clause. The Human Rights Campaign for 10 consecutive years has rated IBM 100percent on its index of gay-friendliness. (Page 3, paragraph 2, line 2)Technological1.Smartphone apps further growthSmartphone apps represent about 2 percent of this industry, but further growth is expected. (Page9, paragraph 2, line 3)2.Increase in development of IT infrastructure by other business companiesGlobal Technology Services (GTS) consists of delivering outsourcing services to help improve clients’ existing IT infrastructures to aid in risk management, flexibility, and financial value....... GTS is IBM’s largest division with respect to revenues, with the cloud-computing portion of the division being the fastest-growing and having the largest expected demand moving forward. (Page 5, paragraph 1)3.Social media revolutionIBM expects firms to double its expenses in this area by 2016. IBM’s purchase of Skype and Facebook’s purchase of WhatsApp are two examples of companies trying to profit off the social media revolution. (Page 3, paragraph 8, line 2)ThreatsDemographicEurope debt crisis Europe, still recovering from its economic debt crisis, reported the smallest growth rates, with the United Kingdom up only 0.2 percent and Germany up 0.9 percent. (Page 8, paragraph 3, line3)Costly labour force for software industry.But this industry requires large R&D expenses to stay current, as well as an expensive labor force, protection of patents and piracy risks, and substantial marketing. (Page 9, paragraph 2, 7
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