IBM Assessment Assignment

During the 80’s and 90’s, the firm was a force to be reckoned due to its remarkable and innovative staff. While other technology firms struggled to create a niche for themselves and increase their profit margins, IBM enjoyed tremendous growth rates. According to available data, International Business Machines (IBM) raked in sales worth $72 billion which was a 12 percent increase from the previous year. Profitability was also up by more than 40%. Indeed, no technology company had the financial clout that IBM had a couple of decades ago. Although the company has had to adjust and welcome new technological trends, its woes are not over. The company has in recent year's experienced mixed fortunes which compelled it to carry out major shakeups. The company’s stock prices and profit margins have been dwindling much to the chagrin of the top executives and shareholders.

According to experts, the firm's financial woes were largely attributed to its inability to or rather reluctance to accept and incorporate change. Due to major technological transition that has been witnessed in the sector in recent years, the firm has had to jettison its top leadership to bring in new individuals who can steer the once technology powerhouse into the future. The contemporary technology business is rife with competition and demands that every business keen on gaining an edge over its competitors must differentiate their products to make them not only unique but also desirable. For instance, Cognitive Business, IBM’s latest platform exemplifies the new era of technology, a new era of business and a new era of thinking. International Business Machines has been at the forefront in innovating and coming up with new and effective business solutions (E.

Dobbs)Although IBM’s competitors are always striving to come up with similar capabilities, IBM has always been ahead of its competitors in terms of innovation. Another innovation that has been critical towards IBM’s success was the introduction of IBM Watson. The company specifically targets forward thinkers in the field of commerce, those who desire to change the world and leave a positive and lasting impact. Porter’s Five Force Model IBM applies numerous approaches to address a wide variety of issues in the IT industry. Among the strategies employed by IBM is the use of Porter’s Five Force Analysis to understand external factors that directly impact the business. The external factors include competitive rivalry, buyer power, new entry threats and substitution.

International Business Machines financial performance is directly linked to the firm's ability to effectively and prudently address external factors such as competition. Threat to New Entrants Establishing a technology company requires substantial investment in terms of capital and human resource. IBM has been able to shield itself from threats of new entrants since the field requires substantial investment in research and innovation. Another competitive advantage that the firm draws from using Porter’s Five Force Model is the fact IBM provides a number of products which do not have substitutes. Competitive Dynamics Utilized By IBM Most corporations always aspire to be market leaders. Today’s challenging marketing conditions, however, often command that companies conceive their marketing approaches and products multiple times.