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Strategic Management Assignment: Impact of Internal & External Factors on IBM


Task: Write a detailed report on strategic management assignment critically discussing the internal and external factors which are affecting the operation of IBM.


Executive Summary
This study prepared in the strategic management assignment will highlight the internal and external factors affecting the operation of IBM. The challenges that have affected the operation of IBM and the approach to tackle the challenges have also been discussed in the study. IBM is trying its best to transit from an infrastructure player to a data and cloud-driven company.

Background of the firm
International Business Machines (IBM), established in 1911 is a global technology company providing software, hardware, cognitive computing, and cloud-based services. This company has been established by the merger of four companies in New York by Charles RanlettFlint, known as the Computing-Tabulating-Recording Company, and later renamed IBM in 1924. IBM is also nicknamed “Big Blue” which offers cloud-based products in the shape of BlueMix, server hardware, and software (Redefining Competition, 2021). This study will highlight the internal factors, the external factors, the major challenge affecting IBM, and the approach that is effective in tackling the challenge.

Internal factors affecting the firm
The strong brand proposition and the digital transformation are the internal factors affecting the operation of IBM.

Strong brand proposition: The services tenacity of IBM is trying its best to transform the business in catering to the era of digital transformation as well as the hybrid IT along with the year-to-year growth revenue. The services spearhead the integrated strategic imperative solution of IBM following the rebranding initiative that has been launched in 2017. Moreover, the management of resources can also be regarded as one of the vital challenges of IBM when the company signs complex DT engagements in digital strategy, the varied technologies, and the process reengineering (Hanelt et al. 2019). On the other hand, with the help of a brand strategy, the Global Technology Services (GTS) and the Global Business Services can be considered to be the same organization with the same type of transformation challenges. The margins that are associated with both the segments can be considered to be improved on a sequential ground involving the 1Q18’s transformation as well as the GBS that follows a multi-year margin including the engagement of SaaS (Pathiranage, 2019). The rebranding strategy of IBM is generally aligned with the milestone of the company and lined up with the current changes in the technological market.

Digital Transformation: The digital transformation of IBM can be considered to be intensifying thereby embracing the revolution. In 2019, the CEO of IBM has carried out a study considering the greatest challenge where it has been found that the ability for the technology to tackle the complexity can be clear and the technology is a second market force of change.

Further, it has been found SAP also provides intelligent technologies and applications with the help of data that is considered to be important to the individual (Spencer, 2021). The digital transformation benefits along with automation and innovation are also regarded as the vital transformation benefits in the case of IBM. Further, there have also been careful attempts made in the process of building a roadmap for private-level deployments.

External factors affecting the firm
Innovation of new products and technology, as well as competition, are the major external factors affecting the competitiveness of IBM.

Innovation of new products and technology: It has been found that IBM has unveiled a series of new technological innovations at CES 2019. The IBM Q System One can be regarded as the new and integrated quantum computing system that is important both for commercial and scientific usage (Warner and Wäger, 2019). Further, the IBM Global High-Resolution Atmospheric Forecasting System provides weather system updates hourly thereby providing 200 percent improvement in the forecasting of revolution accordingly. Moreover, the project debator, as well as the IBM fingernail sensor, can also be considered to play an effective role in the health sector accordingly.

Competition: The competitors of IBM in the field of IT services include HP, Accenture, and Wipro Technologies. Further, in the case of infrastructure software, the biggest competitors are Oracle, Amazon, and Microsoft (Wessel et al. 2019). As the technological advances have created massive upheal, the industries are considered to be converging and the ecosystems are emerging at the same rate to a great extent. The strategic priorities, as well as the go-to-the market plans, can be regarded as the vital organizational approaches where the CEO of IBM had great sway (Goerzig and Bauernhansl, 2018). Further, the disruption, convergence as well as emergence are also the vital drivers of change of IBM with more focus on cognitive computation and mobile computing to a great extent.

The major challenge facing the firm
The most crucial challenge that IBM has witnessed in the recent past includes the competitivenessi.e.acquisition of customers and the alternative cloud platforms. In the case of the alternative cloud platforms, it has become difficult to find out the effectiveness of the cloud strategy of IBM and not choosing to replace the existing OpenShift strategy. This can be considered to create difficulty in the acquisition of new customers by redefining the cloud strategy through improved ways. Although the primary goal of IBM was to unlock the value from the data, automate the and reinvent the process thereby maximizing the value captured by the company in the long run (IBM, 2021). Moreover, driving the acquisition of customers through cognitive insights has changed the intelligence and the visibility of the marketing and the sales team of IBM. The reversed sales approach of IBM has made it easier to focus on the marketing and the monitoring of the classified events instead of creating extrapolation as well as assumptions in the long run (Reinartz et al. 2019). On the other hand, the alternative cloud platform has made it difficult to leverage the public cloud offerings offloading some of the heavy usages and therefore paying for what is required in the organization.

The proposed approach to tackling the challenge/ Conclusion
To tackle the challenge of an alternative cloud platform, IBM needs to choose a multitude of software components included in the datacentre infrastructure that is associated with the release tenurity of the software. Moreover, it is also essential to carry out a partnership with the hybrid cloud transformation that poses maximum scalability including the fast transaction response time that is essential for agile development (Vinod, 2017). Further, the approach of tackling the challenge of acquisition of customers of IBM includes the adoption of the centralized approach in business intelligence that acts as an incubator verifying the vests and the latest capabilities tackling the market opportunities to a large extent. Further, driving this customer acquisition through cognitive insights can also be regarded as the vital approach satisfying visibility, intelligence, and conversation to a great extent. Thus, it can be said that the centralized model of business management engaged with sales and marketing assists in figuring the cognitive and the analytical aspects accordingly. ?

Goerzig, D. and Bauernhansl, T., 2018.Enterprise architectures for the digital transformation in small and medium-sized enterprises. ProcediaCirp, 67, pp.540-545.

Hanelt, A., Bohnsack, R., Marz, D. and AntunesMarante, C., 2021. A systematic review of the literature on digital transformation: Insights and implications for strategy and organizational change. Journal of Management Studies, 58(5), pp.1159-1197.

IBM. 2021. Digital Transformation. [online]. Available at: 17August, 2021)

Pathiranage, J., 2019. Organizational culture and business performance: an empirical study. International Journal of Economics and Management, 24(2), pp.264-278. Redefining Competition. 2021.IBM. [online]. Strategic management assignmentAvailable at: 17August, 2021)

Reinartz, W., Wiegand, N. and Imschloss, M., 2019. The impact of digital transformation on the retailing value chain. International Journal of Research in Marketing, 36(3), pp.350-366.

Spencer, L. 2021. Channel Asia. [online]. Available at: 17August, 2021)

Vinod. 2017.Techmonitor. [online]. Available at: 17August, 2021)

Warner, K.S. and Wäger, M., 2019.Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning, 52(3), pp.326-349. Wessel, L., Baiyere, A., Ologeanu-Taddei, R., Cha, J. and Blegind-Jensen, T., 2021.Unpacking the difference between digital transformation and IT-enabled organizational transformation. Journal of the Association for Information Systems, 22(1), pp.102-129.

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