Research And Identify The Areas Of Improvement Of IBM (Case Study Sample)

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Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc482428781 \h 3Improvement Of IBM PAGEREF _Toc482428782 \h 3Introduction PAGEREF _Toc482428783 \h 3Improvement Strategies PAGEREF _Toc482428784 \h 4Dominance in Market Share PAGEREF _Toc482428785 \h 4Minimal Layoff Strategy PAGEREF _Toc482428786 \h 5Pricing Strategy PAGEREF _Toc482428787 \h 6Conclusion PAGEREF _Toc482428788 \h 7Work Cited………………………………...……………………………………………………… 9
Executive Summary
IBM is one of the known companies that are good performers in the business world. Most of its strategies are aligned in that they work for continued improvement, innovation and increased profitability of the company. The company enjoys various privileges among them increased market share. However, this increased market share makes the company more prone to attacks from the competitors, government agencies, and the customers’ organizations. To overcome this IBM should ensure that its strategies aim at optimum market share and not the maximum market share strategy that many firms advocate. It should also embark on diversification to avoid dominance in one market segment. The various challenges that the company experience in their operations are decreased profitability and increased staff layoffs. For the company to curb the continued layoffs, IBM should come up with strategies that will ensure the company retains its employees even during the harsh economic times. These strategies include salary negotiations and ensuring qualified and innovative employees are hired. In ensuring continued growth in profitability, the company should consider lowering the prices of its commodities which are seen to trade at higher prices than the competitors. Lowering the prices and diversification will ensure a steady income for the company.
Improvement Of IBM
Introduction
Business Corporation has both strengths and weaknesses laid down by SWOT analysis. Evaluation of IBM Corporation prompted business propositions for further improvement and strategies to address the weaknesses. The following proposals will remedy weaknesses and improve on the strength of International Business Machines Corporation. They include; dominance in the market share through product diversification, adopt strategies that do not result in employee layoffs and improve on pricing strategies to lower product prices. Moreover, the company will able to compete with Oracle Corporation and Hewlett-Packard Company which are its strongest competitors. Although IBM Company has high returns from customized products and services, it is experiencing limited growth and development.
Improvement Strategies
Dominance in Market Share
One of the advantages that the IBM enjoys most is the dominance in the market share. It interprets to huge profits, an attraction of best leadership power and glory. What is not always clear is that sometimes the high market shares come with a lot of headaches. Companies that have huge market shares like IBM tend to be prone to attacks from the competitors, government agencies, and consumer organizations. These agencies are more likely to take actions against these companies than they would do to the companies with small market shares. The attacks may be in the form of suits on antitrust which IBM was forced to pay Telex $259.5 million (IBM. 26).
To overcome the problems associated with high market shares; the following proposal should be taken into consideration. IBM should ensure that its high market share is as a result of innovation and a decrease in the cost and prices of the products that the company is offering to the customers. In growing the market share through these means the government, the competitors and the consumer organizations may be reluctant to attack IBM as they lack the basis of the attack.
For the company to have long-term benefits, it should develop a different kind of policy towards the market share. Instead of a policy advocating for market share maximization, it should have a policy that advocates for an optimum market share. For an optimal market share of the IBM, the profit that is resulting from the high market share should not be outweighed by the risk associated with the market share. The company should make sure that the resultant profitability can offset the cost of attaining the market share and compensate the risk associated with the market share expansion. This way the company would have an optimal market share.
The risk of market share can also be diluted through diversification; these strategies have been used by many companies successfully. For example, the Gillette company diversification into shampoo and hairdryers from shaving products. In ensuring continued diversification, the company should discourage the act of abandoning the old products after new inventions and innovations.
Minimal Layoff Strategy
A serious challenge that is facing the International Business Machine is the continued employee’s layoff. It is very disastrous and has to be dealt with appropriately. Although the company wants to cut down the production cost employee layoffs has serious impacts on the business. Some of them are, the business is not able to retain nor attract the best personnel as they fear job insecurity. Also, the company image may be tainted as many may view the company as underperforming or in a declining situation (Harreld, J. Bruce et al. 34). This hurts greatly on the market of the company’s products.
For the company to overcome this challenge, it should adopt new strategies I the financial this year (2017/2018) that do not result in employee layoffs. The best way to do this is ensuring that the company has a contingency plan. This plan will help in recollecting the company whenever there is a crisis. The company should rethink various alternatives that are available instead of layoffs (Howe, R. M. 103). The approaches are, negotiate with the employees who are not on a contract employment for a certain pay during a crisis, negotiate for a scrap of some or all the benefits, and offering early retirement. More importantly, hiring qualified and intelligent employees will ensure a continued thriving business that will eliminate any chances of layoffs. Also, whenever the business makes innovation or comes up with new inventions, it should turn from doing away with the previous line of production as it is also necessary for revenue generation and ensures job security.
Pricing Strategy
International business machines company`s product portfolio declined by 43 percent in the year 2000 (IBM. 20). It has been the trend all through. In the year 2014 product portfolio dropped by 24 percent (IBM 29). Reduced returns were as a result of low sales due to high prices of products and services. IBM offers expensive software solutions and services compared to its competitors such as Oracle Corporation and Hewlett-Packard Company (Lessard, Donald et al. 145). IBM targets enterprises which want to develop IT infrastructures, it offers expensive custom solutions. Major competitors realized the weakness and exploited it to their advantage by offering similar subsidized services. Organizations analyze quotations from different companies for similar items such as hardware and software before making major purchases and installation. IBM can improve on pricing strategi...