Discuss the main risks and limitations facing IBM in the future. What recommendations would you make to ensure that IBM's new strategy is successful at Corporate, Business, Functional and Network levels Justify your recommendations.
A case study on IBM's "On Demand Business" Strategy was conducted by the University of Hong Kong in September of 2005.
The contributing key success factors were :
However, in 2002, with the achievement and success of its business model and the introduction of the new computing architecture like grid and utility computing, IBM made a high-profile announcement about its new corporate strategy centered on the concept of "on demand business". Unluckily, IBM's stock price plunged down and hit the lowest after the disappointing financial results in the first quarter of 2005 with sales increased by merely 3% from the previous year, far lower than many industry analysts' forecast of a 6% increase. It was some years after Sam Palmisano took over as chief executive officer (CEO) in March 2002. As a precautionary measure, the company announced an immense restructuring in its European operations. Even though there were improvements in the second quarter, some began to express their uncertainties and doubts whether the "on demand business" strategy would deliver the promised results. More distinctively, many started to question how and why such a strategy was accepted and justified in the first place.
In order for IBM to remain competitive and ahead of its competitors in the increasingly crowded marketplace, a new corporate strategy called the "On Demand Business," was conceived. ...