Sample Case Study Paper on IBM

The International Business Machines Corporation is also known as IBM. This is an
American conglomerate information technology company that has its headquarter in Armonk,
New York, in the United States of America. IBM which is incorporated in New York was
founded in Endicott as a Computing, Tabulating and Recording Company in 1911 which was
later renamed IBM in 1924. The company which produces and vends computer software and
hardware alongside the provision of hosting and consulting services has operations in more than
170 countries globally. Additionally, as an organization, IBM is a leading researcher being on
record as having the most patents spawned by a business consecutively for twenty-six years.
IBM which is incorporated on the Dow Jones is among the world’s largest employers with a
workforce of more than 350,000 employees who are commonly referred to as “IBMers”.

Threats in IBM Top Markets

Numerous factors influence the performance of any business. IBM’s fiscal performance
is directly connected to the organization’s capability to address the external factors associated
with the strong intensity of the force of competitive rivalry. These competitive forces can either

be moderate, weak or strong forces. It is important to note that the rates at which the two forces
hinder the strategy implementation process do vary. The five major threats in IBM’s top markets
are; bargaining power of suppliers, competitive rivalry, the threat of substitutes, Threat of new
entrants and bargaining power of buyers or customers.
The bargaining power of suppliers has a moderate effect on IBM hence it determines the
price, quality, and supply of materials available in the business. The bargaining power of
suppliers is an important tool that is in cooperated in IBM’s corporate social responsibility
strategy( Lattemann et al, 176). Generally, high supply is an external force that has minimal
threats to IBM. For instance, a change in the supplier’s mode of operation will have a
considerably low impact on IBM if a supplier changes his or her operation mode. It is important
to note that the size of the supply is directly proportional to supply power. It is also important to
note that if the company fails to acquire adequate supplies of materials it requires for its business
from other sources will lead to the strengthening of the bargaining power of the supplier that they
currently have at their disposal.
Competitive rivalry is another threat is faced by IBM. Competitors in the market impose
pressure on the company in terms of market share, pricing, and profits, among other changeable
relevant to the information technology In the business ecosystem. To this end, for IBM to fend-
off competition in the ever-competitive market, it has to improve on its products or
services(Lattemann et al, 175). The entrance of new firms is another threat faced by IBM as they
bring competition to the already existing company. These new entries can take over IBM’s
market shares which may intern lead to the incurring of losses since IBM’s customers might opt
to go for products offered by the new business. The introduction of substitutes in the market is
another major threat to IBM as it may lead to a reduction in revenues of any business. It is

important to note that customers tend to go for new and unique products that have features that
appeal to their tastes. The final threat that IBM faces is the Bargaining of Customers who are the
main sources of the company’s revenues and are important as they directly affect the profits
made by IBM(Lattemann et al, 178). The number of customers that any business has determined
its bargaining power.

IBMs VRIO Analysis

As a company, IBM analyses its resources to evaluate its competitive advantage and thus
comprehend its place in the business environment as well as know its potential weaknesses.


The IBM VRIO Analysis indicates that the value of its financial resources is highly
valuable thus aiding in external investment while averting outside threats. The analysis also
portrays a workforce that is very valuable as compared to its competition. IBMs employees are
highly trained making them more productive thus maximizing output which in turn transforms
into positive returns for the company. Besides, IBMs employees are steadfast and dedicated
making the company’s retention level high leading to a reduced labor turnover. This, in turn,
translates to a greater worth for IBMs customers’ goods. Due to the company’s valuable patents,
IBM has been able to wade off competition easily resulting in greater revenue for the company at
large(Kamran, 1990). The mode of distribution at IBM is also a very valuable resource for the
company as it helps in reaching out to more customers. On the contrary, development, and
research is not a valuable resource for the company as innovation is proving to be a costly
venture as the company has realized minimal innovations and breakthroughs in the past years.



IBMs financial resources are proved to be rare according to the company’s VRIO
Analysis. This is because only a few companies within the computing industry possess strong
economic assets. This result in IBM facing minimal competition from its competitors in this


It has proved to be very difficult to imitate IBMs financial resources as they are costly.
These resources have been obtained by the company For many years of operation thus new
entrants into the industry may find it rather difficult to copy their design. Additionally, IBM's
patents are very difficult and costly for other companies to duplicate as identified by IBMs VRIO
analysis (Kamran, 2000). On the other hand, it is not costly to imitate IBM employees as noted
by the company’s VRIO analysis as other companies are also able to train their workforce to
advance their expertise. These companies can also poach IBMs employees and offer them an
attractive package thus posing competition in this area as far as IBM is concerned.


IBM’s financial resources are structured in such a way that they capture the company’s
value as identified by the VRIO Analysis of IBM. These resources help the company to invest
strategically in the right places. The Patents of IBM, on the other hand, are not well organized as
identified by the IBM VRIO Analysis making the company not utilize these patents to the
maximum(Kamran, 1980).
Conclusion: IBM’s Business And Corporate-Level Strategies And Recommendations

Although IBM is strategically positioned in the industry, there are substantial challenges
which are associated to the weaknesses of the business, and the opportunities and threats in the
external environment. To this end, IBM has formalized some strategies and that will help it in
dealing with the threats it faces in the market. One of These strategies is horizontal integration
whereby IBM can either merge with another business entity or acquire a new model of business
operation which will aid in warding off competition through the exploitation of technological
integration opportunities. Another fundamental strategy is vertical integration whereby a
business cooperates with different businesses and makes it one. This leads to the improvement of
the bargaining power of IBM. Diversification is another corporate strategy IBM uses to improve
its scoop of market shares as it enables the business to venture into risks exposed in the
information technology market.


Works cited

Bilir, L. Kamran. “Patent Laws, Product Life-Cycle Lengths, and Multinational Activity.” The
American Economic Review, vol. 104, no. 7, 2014, pp. 1979–2013. JSTOR,
Lattemann, Christoph, and Ilan Alon. “The Rise of Chinese Multinationals: A Strategic Threat or
an Economic Opportunity?”Georgetown Journal of International Affairs, vol. 16, no. 1,
2015, pp. 172–179.,