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IBM At The Crossroads Case Solution

Solution Id Length Case Author Case Publisher
2040 1008 Words (4 Pages) Frank T. Rothaermel McGraw-Hill Education : MH0036
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IBM, the International Business Machine, was founded in 1911 by Charles Flint. It is headquartered in New York, USA, with operations in over 170 other countries. The company’s current segments include; Cognitive Solutions, Global Business Services, Technology Services, and cloud platform, Systems, and Global Financing. Out of all these operations, Cognitive Solutions holds the highest gross margin (78.6 %). IBM is currently being led by CEO Ginni Rometty, who faces two urgent issues. Firstly, will an emphasis on high margin products and software drive customers away? And the second challenge is the concentration of sales in the American Continent while losing share in Europe.

Case Study Questions Answers

IBM has survived and experienced multiple significant technological changes. Virginia Rometty became CEO in 2012. She was handed an IBM that was booming with high margins and enjoying a leadership role in security and data management. However, the technological world is continuously evolving. IBM was able to capitalize on the internet boom by introducing e-business. It needs a similar strategy at this crossroads. IBM believed that three disruptive technologies were tied to the future of how businesses operated and also the future of IBM. The technologies were: Cloud computing, Big Data, and Analytics, and Systems of Engagement. Cloud Computing was responsible for changing how the value was distributed in the IT industry. Cloud computing was erasing the distinctions between different components of the computer system. The reputation helped IBM to participate in business with Google by stamping Google’s cloud systems and services as secure. By providing both public and private cloud services, IBM was able to deliver an integrated system that utilized IBM’s insights. A consequence of Cloud Computing was the storage of large amounts of public and private data by organizations. Big Data could identify patterns of their customers to make better decisions. It could also be used to offer tailored products, discover hidden patterns of customer behavior, forecast events, etc. However, companies did not have the capacity and ability to analyze this data as it required expensive cutting-edge technology. IBM has a complete solution for organizations planning to utilize this data, but it has remained restricted to North America. IBM has to understand the booming economies of China and India. It can then enter those markets by employing its expertise and marketing campaigns. The third evolutionary technology is the utilization of Artificial intelligence to engage with individuals to provide them tailored services, enabling reduced time to make decisions, which translates to faster delivery times. 

IBM can make companies more efficient by integrating all three technologies with their current systems. Its focus on the North American market has left it dependent on every competitive market where technology is continuously changing. Competitors are coming up with new solutions that can reduce margins. IBM needs to expand its services in Europe and Asia. The strategy to enter these markets should include a massive advertising campaign to create awareness and keep prices attractive to gain market share. China and India are massive economies, and both provide highly developed IT services all over the world. IBM can offer unique solutions to the companies in these regions. It is an established brand that is known for its security and services. By leveraging its experience, it can increase its market share. A global strategy will help make its cloud and analytics business more available and highly integrated, which can be attractive to potential customers.  A comprehensive services network will help it achieve economies of scale, which will ensure high volumes, high margins, and low prices. An internationally well-integrated IBM can then flex its muscles by offering cutting-edge solutions at economical prices.

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