International Business Assignment: IBM Case Study Report

This report analyzes IBM's internationalization strategy, focusing on its global approach, external and internal environments, and strategic implementations. It examines the application of PESTEL and SWOT analyses to understand IBM's operational context, including political, economic, social, technological, environmental, and legal factors. The report also explores conflicting environmental forces, the AAA Triangle strategy (Adaptation, Aggregation, and Arbitration), and identifies current challenges IBM faces in the industry. It provides recommendations for future operations and sustainability within the competitive landscape of the technology sector. The report assesses IBM's strengths and weaknesses, as well as the opportunities and threats it encounters, ultimately aiming to provide a comprehensive overview of IBM's international business strategies and their effectiveness.

Running head: INTERNATIONAL BUSINESS ASSIGNMENT
INTERNATIONAL BUSINESS ASSIGNMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction....................................................................................................................1
Background of the organization and current situation...................................................2
Environment – external and internal factors..................................................................2
Conflicting environmental forces...................................................................................5
Strategy implementation – past and present...................................................................6
Identification of current challenges................................................................................7
Suggestion and recommendations..................................................................................8
Conclusion......................................................................................................................8
References......................................................................................................................9

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Introduction
The case study that has been taken into consideration for this analysis is related to the
internationalization strategy that has been applied by IBM in order to maintain its position in
the industry in contrast to its competitors. The global approach that has been applied by IBM
is built on the balance that is developed by the organization between local responsiveness
levels to the local conditions and the economies of scale. The major goal that has been
developed by the global strategy is related to the ways by which large amounts of differences
are handled and an organization can maintain its operations in a profitable manner as well.
The organization that has been discussed in the case study is IBM (Bartlett & Beamish,
2011).
The approaches that have been implemented by the firm in order to maintain the
global operations in a profitable manner have also been discussed in the case study. The
report will be based on the analysis of the internal and external environment of IBM and its
impact on the revenues that have been earned as well. The conflicts that can take place in the
environmental forces will also be an important part of the analysis in the report. Challenges
that are being faced by IBM currently will be discussed in the report as well.
Recommendations will also be offered based on the future operations of IBM in the
competitive industry and the sustainability levels as well (Bartlett & Beamish, 2011).
Background of the organization and current situation
The International Business Machines Corporation or IBM is a global information
technology based organization of American origin that has its headquarter in Armonk, New
York. The firm operates in more than 170 countries in different parts of the world and was
established in 1911. IBM mainly sells computer software and hardware and aims at providing
the consulting and hosting based services to the customers. IBM is a major organization that
conducts extensive levels of research and has been able to gain US patents that are generated
by the business for around 26 years. The business operations of IBM have been changing on
a continuous basis by enhancing its focus on the more profitable and high value based
markets in the world.
Environment – external and internal factors
The organizational capabilities that have been developed by IBM grow continuously
despite the challenges that are related to the threats and opportunities that are a part of the

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information technology industry. The remote or macro environment in which IBM has its
operations is an important part of the strategies that have been applied by the organization in
order to maintain its operations (Aguinis, Edwards & Bradley, 2017). PESTEL analysis
framework can be applied in order to study the external environment related to the operations
of IBM.
PESTLE analysis of IBM –
Political factors – The move that has been made by the governments of different
countries towards the increase in levels of digitization is a major growth opportunity for IBM.
E-technologies have been successful in gaining political support and this has further
enhanced the growth levels of IBM. Governments have also started implementing efforts for
proper protection of data and have led to the enhancement in revenues of the company (Bergh
et al., 2016).
Economic factors – The major emerging and developed markets have depicted high
levels of economic growth in the last few years and have enhanced the revenues of IBM as
well. Rapid growth of the developing countries is considered to be a key support that has
been able to ensure the growth of IBM. The organization has also aimed at increasing the
levels of its growth with the support that is offered by the development of new and innovative
products. Expansion related opportunities that have been provided to the organization are also
considered to be important for enhancement of revenues (Brannen, Piekkari & Tietze, 2017).
Social factors – The rise that has been seen in the purchasing based capacities is able
to support the increase on sales of the organization. Customer services have been used in an
extensive manner for the purpose of evaluating the quality of business operations and the
products that are developed as well. The organizational culture of IBM has been able to
provide a foundation for the development of services that are offered to the consumers. The
company has set high standards for providing services to customers in different parts of the
country (Cascio & Boudreau, 2016).
Technological factors – Technological integration in the markets and different
industries is considered to be an important part of the industry. The new entrants are thereby
attracted towards the organization due to the presence of high levels of technology integration
and this is able to enhance the competition levels in the industry as well. The interest that is

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depicted by new entrants to diversify their business operations can be a major threat related to
profits that have been gained by IBM (Dodgson, 2018).
Environmental factors – The environmental or ecological situation has a major
impact on the operations of IBM in the information technology based industry. The increase
in usage of renewable energy is able to support the revenue growth of IBM and development
of the recycling programs as well. The interest of organizations in the programs related to
business sustainability have increased in the last few years further enhancing the image of a
firm like IBM (Enderle, 2015).
Legal factors – The protection of intellectual property on an overall basis is a major
growth opportunity for IBM. The organization however has to be take into consideration the
laws that have been developed for protection of intellectual property. Regulation of e-waste is
also an important factor that has been able to offer significant opportunities to IBM in
Southeast Asia (Engert, Rauter & Baumgartner, 2016).
SWOT analysis of IBM –
Strengths – The internal factors have an influence on the methods by which business
organizations can be promoted and levels of resilience can be identified as well. The
strengths of an organization are able to support in gaining revenues and maintaining
profitability levels as well. The high brand value of IBM has been able to play a key part in
the methods by which the organization has been able to uphold its position in the market. The
levels of expertise that are required in the process of production and managing the materials
have an impact on position that is maintained in the information technology industry.
Innovation is also an important part of the success that has been gained by IBM in the
industry (Frow et al., 2015).
Weaknesses – The products that are offered by IBM to the consumers are considered
to be highly imitable in nature and this is considered to be a major weakness of the
organization. The product mix that is offered by IBM to the customers is not diverse in nature
and is not able to fulfil their different needs and demands. The company also currently
operates in only limited markets in information technology industry due to the high levels of
risks that are offered by different markets. IBM has not been able to develop a successful
relationship with the increase in levels of diversification of the products (Frynas & Mellahi,
2015).

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Opportunities – The external strategy based factors have provided major levels of
involvement to the growth of favourable conditions for the proper growth of business
operations of IBM. The company aim at increasing the levels of diversification in different
business areas or operations. IBM can also form effective alliances with other companies in
order to uphold the levels of innovation in the organization. Rapid levels of innovation will
be able to provide major growth chances to IBM in the technology industry (Helfat & Martin,
2015).
Threats – The threats are mainly faced by IBM based on the ways by which the
competitors are able to imitate the products that are provided by IBM to the consumers. The
rapid changes that take in the information technology industry can have a major impact on
the operations and levels of profitability that have been developed by IBM. Cybercrime is
also considered to be a major threat that is faced by IBM based on the revenues and position
of the organization (Hitt, Ireland & Hoskisson, 2016).
The internal strengths and weaknesses that have been depicted by IBM based on its
operations in the information technology industry are able to influence the opportunities that
are provided to the firm. The threats that are faced by IBM on the other hand have a major
impact on the profits and levels of revenues that are gained by the organization (Hitt, Li &
Xu, 2016).
Conflicting environmental forces
The environmental forces that are being faced by IBM in the operations in technology
industry are able to affect the profitability levels of the organization. The political and
economic condition of the countries in which IBM operates can influence the policies
followed by the firm and the revenues as well. The economic condition has a main influence
on the rivalry that is faced in the information technology industry. The economic factors are
able to affect the prices that are set by IBM for the different products that are being offered to
the customers (Mas-Verdú, Ribeiro-Soriano & Roig-Tierno, 2015). The customers will be
able to play a major role in profits that are earned by IBM in the industry and the ways by
which the firm is able to uphold its position in the industry as well. The social conditions and
choice of consumers are influenced by diverse types of products that are offered by IBM.
Diversity levels are able to play a main part in the growth of revenues of IBM in the
information technology based industry (Meyer & Peng, 2016).

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The strengths and weaknesses of IBM are able to influence the methods that are used
by the firm in order to take advantage of the opportunities that are provided to the
organization. The diversity levels in the product portfolio are able to play a main part in
attracting the customers towards the organization (Bartlett & Beamish, 2011). The demands
that are a part of the market are able to support the firm to develop the global strategies that
can have an impact on the future operations. The globalization approach is considered to be a
vital aspect that is related to the product portfolio that is developed by IBM (Pehrsson, 2016).
The organization aims at proper improvement of diversity of the products in order to attract
customers from diverse parts of the world. The conflicts that are a part of the external forces
faced by IBM can have a major impact on the operations and the profitability levels that have
been gained by the firm (Picciotto & Mayne, 2016).
Strategy implementation – past and present
The strategy of global integration named the AAA Triangle in order to understand the
global strategy that has been applied by IBM in order to maintain its global operations. The
manufacturing plants of IBM in China and the business process in India will be analysed with
the help of proper implementation of AAA strategy. The three A’s that are a part of the AAA
Triangle mainly depict Adaptation, Aggregation and Arbitration (Bartlett & Beamish, 2011).
Adaptation is mainly related to the methods by which a company aims at boosting the
revenues and shares in the market by proper maximization of local relevance levels.
Aggregation can be defined as the attempt that is made by an organization to deliver the
economies of scale by proper creation of regional and global operations as well. The AAA
Triangle can be implemented in order to understand premise of growth of an organization
outside its home market (Prajogo, 2016).
The organization has to choose one or more than one basic strategic options in order
to understand the globalization strategy in an effective way. The application of three A’s are
mainly based on the types of organizations and areas in which they are able to operate in a
profitable manner. The companies are able to represent or depict and emphasize different A’s
in various aspects of the operations. IBM has mainly pursued the adaptation strategy in order
to serve the overseas markets by the development of its production plants and operations in
different countries (Pucci, Nosi & Zanni, 2017). The operations of IBM in different countries
comprise of different activities of the organization from the research and development and
the process of resource allocation as well. The aggregation of IBM in different countries is a

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vital aspect that is related to the international strategy of the firm. The company aims at
increasing the levels of coordination and generating the scale economies at the global and
regional levels (Silva, Styles & Lages, 2017).
The organization has tried to exploit the differences that exist between different
countries in order to uphold its global processes. The employees of IBM are mainly a part of
the global operations that have been established by the firm in different countries. The fast
growth of the organization is based on the growth of global operations in the emerging and
developed countries of the world (Teece, Peteraf & Leih, 2016). The global strategies that are
developed by the organizations in information technology industry can be quite different for
the competitors of IBM like TCS or Tata Consultancy Services, Cognizant Technology
Solutions. For example, Cognizant has started its operations by pursuing the arbitrage based
strategy in order to uphold the global operations for a long period of time (Thomé &
Medeiros, 2016).
The AAA framework is able to guide the organizations based on the strategies that
can be implemented by them for maintaining the global operations in different countries. The
differences that exist between the global strategies implemented by the organizations in
Information Technology industry are based on the nature of their operations. The ways that
are implemented by the organization in order to adapt to the local conditions are also an
important part of the strategies that are developed on a global basis (Wolf & Floyd, 2017).
The research and development based facilities of IBM have been able to play a key part in the
development of strategies that can be implemented on a global or international basis. Some of
the companies can implement the strategies based on one of the A’s that is a part of the
triangle. However, the global or leading edge based organizations can implement global
strategies that are a combination of two of A’s. The material and organizational innovation in
the international firms can play a key part in the development of global strategies (Zander,
McDougall-Covin & Rose, 2015).
Identification of current challenges
The global strategies that have been currently implemented by IBM are mainly related
to the challenges that the organization faces in the Information Technology based industry.
The innovations that have been developed by the organization are considered to be structural
and have the ability to implement the arbitrage based strategies. The assignments of people
can be optimized in a dynamic manner in different areas of the operations of IBM (Bartlett &

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Beamish, 2011). The major challenges that are being faced by IBM in the technology
industry currently are as follows,
 The development of a people services model in order to attract and retain the
customers for a long period of time in the highly competitive information
technology industry. The proper allocation of teams in order to form the
strategies is also a major challenge that is being faced by IBM in the industry
(Teece, Peteraf & Leih, 2016).
 IBM is facing major levels of challenges based on the implementation of the
three A’s together for the purpose of proper development of the global
strategies. The global operations have been hindered in an enormous manner
by the increase in levels of competition in the Information Technology
industry (Picciotto & Mayne, 2016).
 IBM is recently facing major challenges in deciding the externalising of
different functions that is currently a major part of the ambitious levels of
global strategies. Open innovation has to be enhanced in the organization for
the purpose of improving and enhancing the future operations in the
Information Technology based industry (Helfat & Martin, 2015).
Suggestion and recommendations
The recommendations that can be offered to IBM for the purpose of improving the
operations in the future and enhancing the global presence are as follows,
 IBM needs to develop and implement the AAA strategy in order to maintain
the operations of the organization on a global basis.
 The global corporate strategies will be developed with respect to the proper
implementation of the three A’s in different aspects of the organization.
 The focus of IBM has to be increased on the global operations and research
and development activities.
 The global operations based strategies will be implemented by IBM in such a
manner so that it is fit for the operations of the firm and the employees who
are a part of the firm as well.

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Conclusion
The report can be settled by asserting that a company like IBM that functions in the
highly competitive Information Technology industry has to develop the global strategies in an
effective way. The global strategies will be based on the Triple A framework that has been
discussed in the provided case study. The organizations need to combine the three A’s in
order to form the global strategies that can prove to be effective for its future operations in
the industry. IBM can maintain its place in the industry with the help that is offered by the
AAA framework and the effective global strategies as well.

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