Thomas Watson steered IBM toward a computer-based business in 1956. Sam Palmisino came with transformative ideas that ushered the company into the new wave of tech industry in 2012 – creating the platform for the current CEO’s – Ginni Rometty – ideas. Lessons that can be learned include the benefits of focusing on global business. IBM has done this by making 200 acquisitions in the last 25 years with an aim of having a better grip on the ICT industry.
IBM’s acquisitions are strategic since the acquisition program is aimed at keeping the firm’s operations relevant to its market. Many of the companies are ICT-oriented to give IBM a competitive edge. Some of the challenges associated with the acquisitions include the expansion of operation cost, increase in taxes and the need to shoulder some of the acquired firm’s liabilities. The potential difficulties in the acquisition processes peg on hard-driven bargains that may lead to high payouts by IBM in the bid to beat other bidders in the market.
IBM strengths stem from the fact it’s a strong brand. It has strategic positioning in the global market and this allows it to raise the capital it needs for global operations. It weakness emerge from the high-level competition faced by the company and some bad acquisition decisions that it has made in the past – some of the acquired firms are liability. However, it has a growing market with boundless opportunities and human capital to take on some the threats which include the rise of robust firms such as Apple and Microsoft. With this is in mind, IBM can still steer off loses and make it emerge at the top based on customer loyalty and global business attributes.
IBM’s move to take advantage of its futuristic opportunities should focus on its cognitive products. This will help the firm to build a tech-supported defensive strategy that border on product and service reliability with a global outlook. IBM products such as Watson will idealize modern consumer’s tech-oriented needs and maintain its market relevance. The company’s plan can also formulate an offensive outlook by taking a different approach – modifying its b2b system and launching against Amazon’s b2c system that is powered by Alexa. The offensive and defensive lines will enable IBM to capture the best of both worlds –service and hardware since it’s known for its innovative machines and it already owns a cloud company. The plan should aim at taking full advantage of IBM’s list of 200 tech-oriented firms with a global diversification agenda. Rometty believes that the company should focus more on service but this may not be the right decision given the diversification spectrum displayed by its competitors.