Ibm Internal and External Environment Essay

992 Words Dec 9th, 2014 4 Pages
Rough Draft
Conduct Analysis
Porter’s Five Forces

IBM
Lisa M Schmidt
Team 3
GEB 4891Strategic Management
Dr. Tristan Davison

Overview of the Business
IBM Corporation creates business value for clients and solves business problems through integrated solutions that leverage information technology and deep knowledge of business processes. IBM solutions typically created value by reducing a client’s operational costs or by enabling new capabilities that generate revenue. These solutions draw enterprise software systems and financing.
IBM provides innovative solutions that exploit cutting edge technology for their clients.
The Business Model as a Value Chain for IBM
An important concept from Michael Porter (1985) is called the value chain,
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Porter argued that these five forces determine the ultimate profit potential of the industry and the essence of business strategy that deals with competitive rivalry. This means that these five forces and the business strategy reflect profitability measures for a company as reflected in aggregate financial statements.
The pressure to Innovate new products and services is the lifeblood of IBM, and any missteps in predicting industry trends cam be costly investments with little return. Competition is intense, although IBM holds the largest share of anyone company, yet it does not hold any dominant position. Much of the competition is small companies and individuals who may have a focus as narrow as IBM is wide. Few companies can hold their own against IBM’s broad depth of software products and platforms, but the lucrative business of providing skilled individuals, the suppliers, is attractive to any company, whether they are large or small.
As a large public corporation with a global presence, IBM has many stakeholders with many interests. The stakeholders key concerns are clients who are cost-sensitive and are generally not pursued by IBM and have a diminishing relevance. Companies who provide discounted prices set the price floor for IBM and IBM’s exit point from the market, maintaining

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