Strategic management

Chap 2
1.Porter’s model: mô hình 5 áp lực cạnh tranh
 New entrants (đối thủ tiềm ẩn): A new entrant will bring extra capacity and more competition. The two
things affect the strength of this threat: barriers to entry and response of existing competitors
- barriers to entry:
01. Economies of scale e.g. the benefits associated with bulk purchasing
02. Product differentiation: Existing firms in an industry may have built up a good brand image and strong
customer loyalty over a long period of time. The customer may ignore new market offerings.
03. Capital requirements: if the capital investment requirements are high, the barrier against new entrants
will be strong.
04. Switching costs (chi phí chuyển giao khi sử dụng sp): refer to the costs of time, money and
convenience that a customer would have to incur by switching from one supplier’s products to another’s.vd:
thẻ tích điểm,..
Vd: ngành có switching cost cao: bảo hiểm
05. Access to distribution channels: Do our competitors have the distribution channels sewn up? New
distribution channels are difficult to establish, and existing distribution channels hard to gain access to
(KFCthe first mover vs. McDonal in Vietnam)
 Competitive Rivalry
This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers
and buyers in the market attempt to control. This is why it is always seen in the center of the diagram.
• Factors determining the intensity of competition:
- Market growth
- Cost structure
- Switching
- Capacity
- Uncertainty
- Strategic importance
- Exit barriers
!!! Identifying competitors
 The bargaining power of buyers (customers)
Factors determining the relative bargaining power of buyers:
- The degree of buyer concentration relative to suppliers, particularly if the volume purchase of the
buyers are high (Eg. grocery market).
- The relative volume of the buyer’s purchase in that market, combined with the relative frequency of
the purchase to that buyer.
- The availability of close substitutes
- The standardized or commodity nature of the products or services in the market, which makes it
difficult to differentiate the supplier’s offering.
- Cost of switching is low and involve little risk (between alternative suppliers).
- The degree to which buyers are price-sensitive.
- The degree to which buyers wish (or need) to build up effective long-term relationships with suppliers
to ensure the quality and reliability of supply within the architecture of their value chain.
Kết mảng kinh doanh
  The power of suppliers.
Suppliers’ bargaining power is determined by factors:
• The degree to which suppliers are effectively able to differentiate their product or service.
• The degree of supplier concentration.
• The relative importance to the buyer of the product or service being purchased from the supplier.
• The availability (or otherwise) of close substitutes as satisfactory inputs to the buyer’s requirement.
• The switching costs are high (the cost of switching supplier) e.g. Switching from one software supplier
to another.

Corporate Intensic 1. Khi thị trường hiện tại chưa bão hào
Chiến lược thâm
Level Strategy một loại sản phẩm hoặc dịch vụ nhất
nhập thị trường, là sự
định.
lựa chọn đầu tiên của
2. Khi tỉ lệ sử dụng sản phẩm của các
hầu hết các công ty
khách hàng hiện tại có thể gia tăng một
khởi nghiệp khi tìm
cách đáng kể.
Mark kiếm chiến lược tăng
3. Khi thị phần của đối thủ cạnh tranh
et trưởng kinh doanh rủi
chính đang giảm đi trong khi lượng tiêu
Penetr ro thấp. Chiến lược
thụ toàn ngành đang tăng lên.
ation này giúp gia tăng thị
4. Khi doanh số bán hàng và chi phí
phần cho các sản phẩm
marketing trong quá khứ có tương quan
hoặc dịch vụ của
chặt chẽ.
doanh nghiệp thông
5. Khi lợi thế kinh tế nhờ qui mô tăng lên
qua các nỗ lực
mang lại cho doanh nghiệp các lợi thế
Marketing.
cạnh tranh cơ bản.

Tháng 5/2005, Adidas tuyên bố sẽ

mở 40 cửa hàng mỗi tháng trong
1. Khi doanh nghiệp có thể thiết lập được
liên tiếp 40 tháng tới, mặc dù tại
một kênh phân phối mới hiệu quả: ổn
thời điểm đó Adidas đã có 1.500
định, sẵn sàng với chi phí hợp lí.
Chiến lược phát triển cửa hàng tại Trung Quốc.
2. Khi một doanh nghiệp đang kinh
thị trường là phương
Mark doanh rất hiệu quả trong ngành kinh
thức tăng trưởng của – Và kết quả là Adidas, dù chỉ là
et doanh mà nó tham gia.
doanh nghiệp bằng con công ty kinh doanh các dụng cụ thể
Devel 3. Khi tồn tại một đoạn thị trường nào đó
đường đưa những sản thao đứng thứ hai trên thế giới sau
opme chưa được khai thác hoặc chưa bão hòa
phẩm hoặc dịch vụ Nike, đã được chọn là nhà cung cấp
nt 4. Khi doanh nghiệp đang hoạt động dưới
hiện có vào thị trang phục chính thức cho Ủy ban
năng lực sản xuất.
trường mới. Olympic quốc gia Trung Quốc.
5. Khi ngành kinh doanh mà doanh
Đồng thời Adidas cũng đã chi 80
nghiệp đang tham gia có xu hướng mở
triệu USD để trở thành nhà cung cấp
rộng về phạm vi trên toàn cầu.1.
trang phục chính thức của Thế vận
hội Opympic Bắc Kinh 2008.

Produ Chiến lược phát triển 1. Khi một sản phẩm đã rất thành công McDonald's là hãng cung cấp đồ ăn
ct sản phẩm là chiến của doanh nghiệp đã bắt đầu đi vào giai nhanh theo đuổi chiến lược phát
Devel lược nhằm gia tăng đoạn bão hòa trong chu kì sống sản triển sản phẩm.
 phẩm, chiến lược này nhằm thu hút
Hãng đã thử nghiệm và phát triển
những khách hàng đã thỏa mãn với
loại bánh kẹp dành cho người sành
những sản phẩm hoặc dịch vụ hiện tại
ăn (Gourmet - like sandwiches) vì
của doanh nghiệp tiếp tục thử hoặc tiêu
hãng cho rằng người tiêu dùng có xu
dùng các sản phẩm hoặc dịch vụ mới.
hướng chi trả nhiều hơn cho các loại
2. Khi doanh nghiêp hoạt động và cạnh
lượng hàng hóa tiêu đồ ăn nhanh có nhiều các thành
tranh trong ngành có tốc độ đổi mới và
opme thụ bằng cách thay đổi phần bổ dưỡng.Mọi người ngày
phát triển công nghệ cao.
nt hoặc cải tiến sản phẩm, càng mong muốn các loại đồ ăn
3. Khi đối thủ cạnh tranh chính đưa ra
dịch vụ hiện tại. không chỉ có mùi vị ngon mà còn
sản phẩm có chất lượng tốt hơn nhưng ở
phải thực sự ngon khi ăn. Hãng
mức giá cạnh tranh.
cũng có các cửa hàng bán bánh kẹp
4. Khi doanh nghiệp cạnh tranh trong
mà người mua có thể tự lựa chọn và
ngành có tốc độ tăng trưởng cao.
kết hợp các vị khác nhau (Design
5. Khi doanh nghiệp có thế mạnh thật sự
your own sandwiches).
trong hoạt động nghiên cứu và phát triển.

Hãng máy tính Dell (Dell

1. Khi các nhà phân phối hiện tại có chi
Computer) là một ví dụ. Dell theo
phí cao, không đáng tin cậy, hoặc không
đuổi chiến lược hội nhập dọc về
đáp ứng được nhu cầu của doanh nghiệp
phía trước bằng cách thiết lập hệ
trong việc phân phối hàng hóa, dịch vụ.
thống cửa hàng bên trong cửa hàng
Chiến lược hội nhập 2. Khi các nhà phân phối hiện có chất
(stores-within-store) ở Sear,
Forwa về phía trước là chiến lượng và mang lại lợi thế cạnh tranh cho
Roebuck.
rd lược nhằm sở hữu hoặc doanh nghiệp nhưng có giới hạn về năng
Integr gia tăng khả năng kiểm lực.
Chiến lược này chủ trương thiết lập
ation soát đối với nhà phân 3. Khi doanh nghiệp cạnh tranh trong một
một hệ thống các điểm trưng bày
(V) phối hoặc người bán ngành đang tăng trưởng có triển vọng
nhỏ cho phép người khách hàng có
lẻ. tăng trưởng rõ ràng trong tương lai, điều
thể tham quan và dùng thử sản
này là cần thiết bởi vì việc hội nhập dọc
phẩm trước khi chính thức đặt mua.
về phía trước là giảm khả năng đa dạng
Nhưng kể cả các ki-ốt hay cửa hàng
hóa của doanh nghiệp, nhất là trong
của Dell thì đều không lưu kho các
trường hợp ngành chính có biến động.
loại máy tính.

Chiến lược hội nhập

Back về phía sau là chiến
ward lược nhằm sở hữu hoặc
Integr gia tăng khả năng kiểm
ation soát đối với nhà cung
cấp.

Chiến lược hội nhập
Horiz ngang là chiến lược
ontal nhằm sở hữu hoặc gia
Integr tăng khả năng kiểm
ation soát đối với các đối thủ
cạnh tranh.
Chiến lược hội nhập ngang được theo
Ví dụ, Disney sáp nhập với Pixar
đuổi bởi một công ty để củng cố vị thế
(sản xuất phim), Exxon với Mobile
của nó trong ngành. Một công ty thực
(sản xuất dầu, tinh chế và phân
hiện loại chiến lược này thường sáp nhập
phối) hoặc sáp nhập Daimler Benz
hoặc mua lại một công ty khác đang
và Chrysler (phát triển, sản xuất và
trong cùng giai đoạn sản xuất.
bán lẻ xe hơi).
 Chiến lược đa dạng
hóa liên quan là chiến
lược xảy ra khi công ty
thêm hoặc mở rộng
dây chuyền sản xuất
hoặc thị trường hiện
có.
Ví dụ, một nhà sản xuất giày bắt đầu
Trong những trường
sản xuất một dòng ví và các phụ
Relate hợp này, công ty bắt
kiện bằng da khác; một cửa hàng
d đầu sản xuất một sản
sửa chữa điện tử bổ sung vào danh
divers phẩm mới hoặc thâm
mục dịch vụ cho thuê của mình các
ificati nhập vào một thị
thiết bị để khách hàng sử dụng tạm
on trường mới liên quan
thời cho đến khi điện thoại của họ
đến hoạt động kinh
được sửa chữa.
doanh của mình. Dưới
sự đa dạng hóa liên
quan, công ty làm cho
việc tiêu thụ sản phẩm
dễ dàng hơn bằng cách
sản xuất hàng hóa bổ
sung hoặc cung cấp
dịch vụ bổ sung.

- Những doanh nghiệp đa dạng hóa

Chiến lược đa dạng không liên quan thường tìm kiếm những
hóa không liên quan doanh nghiệp có nhu cầu mua bán, sáp
hướng việc đầu tư tài nhập và có triển vọng lợi nhuận cao trong
Unrel chính vào những ngành các ngành công nghiệp khác nhau.
ated có triển vọng lợi nhuận
divers tốt trong danh mục đầu - Những doanh nghiệp được chọn làm
ificati tư thay vì theo đuổi mục tiêu thường là những doanh nghiệp
on việc đầu tư mở rộng đang được định giá thấp dưới giá trị tài
hoạt động trong cùng sản thực, những doanh nghiệp đang lâm
chuỗi giá trị hiện tại vào tình cảnh túng quẫn hoặc những
của doanh nghiệp. doanh nghiệp có triển vọng lợi nhuận cao
nhưng thiếu vốn đầu tư.

Retrench Turna Tái cấu trúc

ment: round (turnaround): có 2
Chiến chiến lược để thực hiện
lược cắt điều này. Thứ nhất,
giảm doanh nghiệp củng cố
kinh hoặc tái cấu trúc hoạt
doanh động kinh doanh; và
thứ hai, thực hiện cắt
giảm chi phí lao động
và marketing.
 Thoái vốn
(divestment): Doanh
nghiệp loại bỏ một
mảng hoặc một phần
hoạt động kinh doanh
Divest
thông qua bán, đóng
ment
hoặc loại bỏ một đơn
=
vị kinh doanh chiến
Divers
lược (SBU) hay một
titute
dòng sản phẩm hoặc
một bộ phận hoạt động
(kèm hiệu quả hoặc
ngoài trọng điểm) nào
đó.

Phá sản
(bankruptcy): được
sử dụng khi doanh
nghiệp rơi vào tình
trạng mất hoàn toàn lợi
Bankr nhuận. Đây là chiến
uptcy lược hợp pháp để
doanh nghiệp tái cấu
trúc khi tuyên bố phá
sản đối với các khách
hàng trung thành của
mình.

Chiến lược chi phí thấp thường bán các Chiếc lược chi phí thấp đã mở
sản phẩm và dịch vụ theo chuẩn thông đường đến thành công cho nhiều
thường cho hầu hết số đông các khách công ty. Khi mới xuất hiện lần đầu
hàng tiêu biểu trong ngành. Để thực hiện vào các thập niên 1950 và 1960, các
thành công chiến lược này, doanh nghiệp nhà bán lẻ hạ giá ở Mỹ như Kmart
cần thiết phải luôn tập trung vào việc đã thâu tóm phần lớn thị trường bán
Chiến lược chi phí kiểm soát và giảm các chi phí xuống mức lẻ từ tay các cửa hàng bách hóa
Low- thấp là một loại chiến thấp hơn các đối thủ cạnh tranh.
truyền thống và các cửa hàng đặc
cost lược giá mà công ty
chủng.
Strategy cung cấp các sản phẩm Công ty có thể đạt được lợi thế chi phí
SBU = Cost x ở mức giá thấp. Chiến bằng cách tăng hiệu quả của họ, tận dụng
Thành công của họ nhờ vào khả
Leadersh lược này giúp kích lợi thế kinh tế nhờ qui mô hoặc bằng năng cung cấp sản phẩm với giá
ip thích nhu cầu mua của cách nhập nguyên liệu thô với chi phí
thấp, và họ đã phát triển khả năng
Strategy. người tiêu dùng và thấp. ấy bằng cách giữ cho cơ cấu chi phí
giành thị phần cao hơn.
của mình luôn thấp hơn chi phí của
Để một công ty trở thành người dẫn đầu các đối thủ cạnh tranh truyền thống.
về chi phí, cần phải có những thế mạnh Những công ty hạ giá này lần lượt bị
nội bộ sau: thay thế bởi Wal-mart và Target vì
- Tiếp cận nguồn vốn để có những khoản cả hai đã có thể thực hiện một chiến
đầu tư đáng kể lược chi phí thấp hiệu quả hơn.
- Hiệu quả trong hệ thống sản xuất
 - Chuyên môn hóa để cải thiện qui trình
sản xuất

Best-
value
(Differen
tiation)

A cost focus strategy

centers on a limited
market segment or a
particular niche. It Ký hiệu: Thị trường ngách (tiếng Anh:
Cost requires the company Niche market) là thị trường con của một
Focus to understand the sản phẩm hay dịch vụ cụ thể nhưng nhắm
idiosyncrasies of that tới số khách hàng có nhu cầu hẹp hơn
market and the unique
needs of those specific
customers.

Like a cost focus

strategy, the
differentiation focus
approach aims for a
Different narrow niche market.
iation x In this case, the
Focus company finds unique
features of its products
that appeal to a
particular group of
customers.

Strengths (6)

1. Strong competency in acquisitions.

IBM has made 157 acquisitions and 28 investments. The company has spent over $ 69.53B for the acquisitions. IBM has
invested in multiple sectors such as IT Operations, Cybersecurity, Business Intelligence and more.

Over the last 13 years, from 2000 to 2012, IBM has acquired more than 140 companies in strategic areas including
analytics, cloud, security and commerce. This has led to substantial growth in software and consulting offerings from IBM
and established the company as a leading software and consulting provider for enterprises. IBM also expects to invest $20
billion over the next two years on acquisitions to strengthen its product portfolio even further. Company’s competence in
successful acquisitions is the key advantage other companies, like HP, currently lack.

2.  First mover in cloud computing solutions for enterprises.

IBM moved to cloud computing in 2007 with its “Blue Cloud” program, which was designed to offer hardware and
software solutions for enterprises that were willing to have their own private cloud. Since then the company has become
the first reference point for enterprise cloud solutions in the cloud market. Unlike many other companies in the cloud
market, the company has been offering the broadest range of software and services in one place.

3. Business Model

IBM focuses on two aspects of its long-term growth strategy. First, to help its clients to become more innovative,
efficient and competitive through the application of business insight and IT solutions and secondly, to provide long-term
value to shareholders. Keeping this in mind they have developed superior capabilities to offer services, software and
systems.

This is one of the reasons the brand still sticks by.

4. Clear, stable product development roadmap:

Shorten project implementation time and costs: the components are already integrated into a total solution, so when
deployed, it will save a lot in terms of time, risks, and associated costs. followed by project implementation costs. With
the current competitive situation, bringing the best product and service to the market in the fastest time is a very important
factor for every business. Therefore, saving time, money and risks with IBM solutions will help businesses gain a great
advantage in the market.

Customers are assured of a stable supply and product development roadmap. For high-tech products, having a stable
product development roadmap is very important. Thereby, customers will be guaranteed initial investment costs, ensuring
the sustainability of the solution.

IBM (USA) has announced its latest quantum computing development roadmap, including a plan to radically improve the
performance of quantum processors by 41 times by 2023.

5. Customer Loyalty 

Customer loyalty matters because repeat customers spend more on each transaction.

 Loyal customers are more likely to repurchase, refer more, and try a new offering.

IBM has a huge and extensive client base, which is present across the world. 79% of customers said  that they are satisfied
and will be loyal to ibm's https://www.comparably.com/brands/ibm

6.  Expertise in Production Processes and Materials Management

IBM’s expertise in production processes and materials management. Such expertise is based on a long history of
innovation, which shapes the company’s business strategies and human resource development programs for IBMers’
talent and skills, and influences the development of the industry.

For example, IBM Production Optimization delivers three key capabilities:

1. Predict and pinpoint losses, related to process and equipment

2. Analyze the root causes and test alternative scenarios

3. Prescribe the best actions to solve the issue

The solution is built to be versatile – enabling data scientists and process engineers to optimize costs, quality or
throughput. They can do this by customizing the pre-built analytics for specific assets, and changing the KPIs to maintain
optimal conditions for efficiency. 

 =>The result: significantly better throughput, improved yields and reduced manufacturing costs.

Weakness (6)

1. Expensive service and software solutions.

IBM offers expensive integrated custom solutions for enterprises that want to build reliable IT infrastructure in their
companies. This often involves buying hardware, software and services from IBM at the same time, which is a very costly
expenditure for any size of enterprise. Such an infrastructure investment is often postponed in times of uncertainty or
slowing economic growth. This weakness was evident over the last few years, when IBM struggled to cross sell its
products and saw decreasing revenues in the same period.

2. Low degree of diversification 

In relation, IBM has a low degree of diversification. This weakness pertains to the company’s operations in only a limited
number of markets within the information technology industry, leading to high risks based on these markets. This issue
has even worsened because of the firm’s shrinking product mix.

(kem da dang ve phan khuc thi truong)

3. Production cost is too high

In addition to plant and equipment costs that cost billions of dollars, IBM and companies in this field often have to spend
a lot of money developing new manufacturing technologies to improve performance. data storage capacity, and the price
of the chip. Operating manufacturing plants is often very expensive and sometimes it is a burden for companies, even big
companies like IBM. The production of electronic accessories requires a lot of capital while this is a business that is prone
to fluctuations

According to a recent report by the Wall Street Journal, IBM is considering selling its chip business. According to
research by financial research firm Sanford C. Bernstein, IBM's chip business generated about $1.75 billion in revenue in
2008, but lost $130 million in pre-tax earnings.

4. The size of the company is exceeding to its requirements: 

The massive size of IBM can make coordination on projects difficult.

5. Niche markets and local monopolies that companies such as IBM able to exploit are fast disappearing. The customer
network that IBM has promoted is proving less and less effective.

6. Declining market share of IBM with increasing revenues 

The Computer Services industry is growing faster than the company.

In such a scenario IBM has to carefully analyze the various trends within the Technology sector

and figure out what it needs to do to drive future growth

Opportunities (7)

1. Expanding product portfolio, diverse opportunity areas like cloud, business consulting, sustainable business
projects etc.

IBM has been trying endlessly to expand its services, one such service is IT consultancy. If a big name like IBM ventures
into something of this sort and puts money into it, it can pay off really well in the long run. IBM already has an
established reputation that people can catch onto very quickly.

IBM has the opportunity to acquire more companies and to partner with many others. This can prove to be a very good
option considering the current situation. Previous acquisitions have benefitted IBM significantly and contributed majorly
to improving its market share.

IBM provides various services (cloud, security and infrastructure) and enterprise solutions (servers, networking and
storage), which are the most profitable IBM’s businesses at the moment. The company should focus on growing these
divisions as they promise better growth opportunities and higher profit margins.
2. Alliances with firms from different industries or markets.

The opportunities for IBM is to develop alliances with other firms in different industries and markets. This external factor
is based on the trend of technological integration in industries and markets. For example, the products of other industries,
such as the automotive industry, are becoming increasingly dependent on computing technologies

3. Increasing demand of cloud based services

The cloud computing market is expected to grow by an average of 22% each year from 2011 to 2020. By 2020, the market
is expected to reach $240 billion value. Currently, IBM is offering many services related with cloud computing and is well
positioned to benefit from that growing market.

4. Data Analytics

The big data and analytics market reached a value of nearly $73,287.6 million in 2020, having increased at a compound
annual growth rate (CAGR) of 10.2% since 2015. The market is expected to grow from $73,287.6 million in 2020 to
$135,706.1 million in 2025 at a rate of 13.1%. The market is then expected to grow at a CAGR of 13.2% from 2025 and
reach $252,361.3 million in 2030.

To take advantage of the opportunities, IBM should focus on big data-as-a-service (bdaas), hybrid clouds, investing in
edge computing, establish operations in emerging markets, provide competitively priced offerings in low-income
countries, partnerships with end-users, increase visibility through websites, leverage social media to maximize reach and
focus on industries.

5. Increasing government regulations are making it difficult for un-organized players to operate in the Computer
Services industry. This can provide IBM an opportunity to increase the customer base. (TẠO RA HÀNG RÀO GIA
NHẬP THỊ TRƯỜNG CHO CÔNG TY ĐÃ BASED)

6. Opportunities in Online Space - Increasing adoption of online services by customers will also enable IBM to provide
new offerings to the customers in Computer Services industry.

7. Trend of customers migrating to higher end products - It represents great opportunity for IBM, as the firm has
strong brand recognition in the premium segment, customers have experience with excellent customer services provided
by IBM brands in the lower segment. It can be a win-win for the company and provides an opportunity to increase the
profitability.

Threat (7)

1. Information leakage

Ginni Rometty, IBM Corp.’s Chairman, President and CEO, had the following to say at the IBM Security Summit in New
York City earlier this year, “We believe that data is the phenomenon of our time. It is the world’s new natural resource. It
is the new basis of competitive advantage, and it is transforming every profession and industry. If all of this is true – even
inevitable – then cyber crime, by definition, is the greatest threat to every profession, every industry, every company in
the world.” Cyber incidents will damage their reputations – which can have a negative impact on revenues, company
valuation when raising capital, customer acquisition and retention, and their ability to recruit top talent. For example,
cloud platform products expose the firm and its clientele to potential cyber attacks and related risks.

2. The price of software products and services is quite high compared to competitors

With the goal of providing quality products and solutions with perfect support services, IBM always holds the view that
price is not a competitive advantage. IBM's products and solutions are always perceived by customers as being rarely
inferior to competitors. However, this is easily the reason why IBm loses its competitiveness compared to other low-cost
software companies in some developing markets.
In IDC's 2013 report, IBM achieved revenue of $2.97 billion and closely followed HP with 23.6% market share. IBM's
revenue fell more than 10% year-over-year on the threshold of a technology refresh cycle, and within more than two
years, IBM's server revenue fell more than 19%. Servers accounted for about 15% of IBM's total revenue in 2012 and
13% in 201

3. Political instability (chinese + usa) bất ổn chính trị . dẫn chứng 5 forces + pestel

Political stability is important for business organizations as it influences customer and investor confidence, and therefore,
has a wide impact on the economy. High political instability has serious implications for the consumption, investment,
and economic growth of businesses. 

Currently, the geographic area in which IBM Values and Corporate Citizenship is actively present is experiencing some
political instability due to internal and external conflicts. Inability to understand and handle the prevailing political chaos
can inhibit the company from achieving its growth objectives, and management will be reluctant to invest in new capital.

4. An increase in cyber crime

An increase in cyber crime introduces new problems into the industry.  It also exposes weaknesses in the information
infrastructures

5. Distrust of institutions and increasing threat of legal actions for IBM - As the WTO regulations and laws are
difficult to enforce in various markets. Legal procedures have become an expensive and long drawn process. It can lead to
less investment into emerging markets by IBM thus resulting in slower growth.

6. Competitors catching up with the product development - Even though at present the IBM is still leader in product
innovation in the Computer Services segment.

 It is facing stiff challenges from international and local competitors.

7. Shortage of skilled human resources - Given the high turnover of employees and increasing dependence on
innovative solution,

 companyname can face skilled human resources challenges in the near future. => PHỤ THUỘC VÀO NGUỒN BÊN
NGOÀI

II. Strategy

Tên chiến lược: CI6: Horizontal integration

Được đúc kết từ S,W,O,T nào?  S1 O1

Miêu tả:

 S1 - là về gì? 

Strong competency in acquisitions.

An acquisition is when one company purchases most or all of another company's shares to gain control of that company.
Just as the company's adventures into new technology arenas had its hits and misses the past couple of decades, so too did
IBM acquisitions and merger efforts.

IBM has acquired many companies over the years and also sold some of its products to other companies. IBM has
made 157 acquisitions and 28 investments. The company has spent over $ 69.53B for the acquisitions. Strategic
acquisitions of technology, AI and consulting companies have strengthened its position in the competitive market. All
of these decisions have brought value to the company in one way or another. Merging has always been a strategic
business move for brands to sustain themselves by increasing profits.
  O1 - là về gì? 

Expanding product portfolio, diverse opportunity areas like cloud, business consulting, sustainable business
projects etc.

The business is expanding as it focuses on engagement solutions. The company comprises 23 companies relating to
mobile, security, and social sectors. Moreover, IBM is now the partner of Apple to make easy use of personal
applications.

The cloud for telecommunications initiative by IBM has seen over thirty-five partners joining to collaborate with IBM.
The company has also partnered with Samsung and Redhat to develop the next generation 5g and mobile edge
device solutions for private networks (IBM, 2021).

IBM has the opportunity to acquire more companies and to partner with many others. This can prove to be a very
good option considering the current situation. Previous acquisitions have benefitted IBM significantly and contributed
majorly to improving its market share.

 S1O1 - Tận dụng điểm mạnh… để đáp ứng cơ hội ….

IBM makes the most of its advantages to meet the opportunity to expand product portfolio, diverse opportunity areas
like cloud, business consulting, sustainable business projects etc. Acquiring companies helps IBM own the products of
those firms, diversifying IBM's product portfolio. Product diversification helps the businesses expand the reach of
their products in the market, improve the position and value of the brand in the industry.

 Chiến lược X là về gì? 

Horizontal integration is a business strategy in which one company acquires or merges with another that operates at
the same level in an industry.  Horizontal integration is pursued by a company to strengthen its position in the industry.
A company implementing this type of strategy often merges or acquires another company that is in the same production
phase.

Horizontal integrations help companies grow in size and revenue, expand into new markets, diversify product
offerings, and reduce competition.

 Tại sao lại dùng chiến lược X?

A horizontal integration strategy is pursued by a company to strengthen its position in the industry. A company
implementing this type of strategy often merges or acquires another company that is in the same production stage.

IBM is one of America's most iconic technology corporations. In recent years, however, IBM has been eclipsed by the
younger tech giants.

Like many tech companies in the early 2000s, IBM has stumbled a few times trying to find its footing traveling from the
civilized world of proprietary hardware to the wild west that is the cloud-based software and services market. After
falling, IBM appears to have finally found the right path forward. 

In this case, IBM takes advantage of its strength as strong competency in acquisitions to merge or acquire companies in
the technological industry. IBM has spent over $ 69.53B for the acquisitions and has invested in multiple sectors such as
IT Operations, Cybersecurity, Business Intelligence and more. By that way, the company made its software and
consulting products to significantly expand, solidifying the company's position as a top provider of both services to
businesses.

For example:
  IBM has acquired Red Hat since 2019, the main aim of this acquisition was to position IBM as a cloud power.
Another reason is to invest in open source. This deal was supposed to make IBM a top hybrid cloud provider
in the world.

 Another solid IBM acquisition was SoftLayer for $2 billion in 2013, which helped extend Big Blue's reach into
markets where archrivals AWS and Microsoft play. It also served to strengthen its hybrid cloud strategy by
making its SaaS offerings more competitive. The acquisition added another couple of dozen SoftLayer's data
centers to IBM's already extensive existing network.

 One of the acquisitions was IBM's $3.5 billion purchase of PwC global business consulting and technology
services unit, PwC Consulting, in July2002. The hope was that the combination of IBM's technology and PwC's
experience in helping large corporations solve any number of business problems would be a perfect match.

Therefore, we can obviously see that the horizontal integration has been properly applied by IBM, bringing the company
certain benefits. It increases control and ownership over IBM’s competitors. The company's proficiency in making
successful acquisitions is its main edge over other businesses. The horizontal integration may be the best path for IBM to
back to the top.

 Recommend

Acquire ideas, not just revenue

The most successful innovative companies buy startups and other private companies to help transform themselves. The
strategic rationale for specific acquisitions varies. In some instances, they buy a company because it has strong financial
performance in addition to an innovative product. 

IBM has developed Watson’s base IP largely in its own R&D labs. The company has also been an active acquirer of small
companies (e.g., Alchemy for analyzing text) and large companies (e.g., assets of the Weather Channel). As mentioned
above, IBM acquired Explorys and Phytel and combined their IP into a new offering, Watson Care Manager.

Even when it buys private companies, IBM traditionally has favored buying and scaling ones with significant current
revenue, rather than buying ones that only have IP. This strategy is natural since revenue reflects a mature business with
established products and business models that can scale up. To make Watson and Watson Health successful, IBM’s
acquisition strategy must continue to strike the right balance between buying large companies with market dominance and
faster revenue impact and buying many more small startups with differentiated IP and strong teams that have a longer-
term impact. In addition, IBM corporate marketing must restrain itself from fueling the hype about artificial intelligence
and resist Wall Street pressure for short-term results by clearly explaining how far-reaching innovations such as Watson
take years to pay off.

Focusing on operations and people before acquiring

Companies that are financially stable like IBM may consider the acquisition of a company or divestiture have many
avenues to pursue over the near to mid-term horizons. With the disruption in the economy, businesses have the
opportunity to reset and redefine their core business models. By strategically planning now, IBM can prioritize the
resources and tasks needed to turn lucrative acquisition benefit opportunities into reality.

Often the most significant synergies and cost savings from acquisitions are a result of operational integrations between the
involved companies. Before considering the acquisition of another company, IBM should evaluate their own operations,
data and processes to assess if they can quickly add another organization to its current platform. If not, the company needs
to first focus on streamlining its own core operations to ensure flexibility to thrive as a single company and capture
immediate cost savings to support the acquisition business case.
Because employee satisfaction and retention is essential during acquisitions, IBM must also focus early on people
transformation and culture. By bringing this topic to the forefront before the acquisition process even begins, IBM builds
the foundation with their own people to bring in new employees in a positive manner. IBM must look at the transition
from a people perspective and create a culture and environment that new employees want to work in, or they risk
significant retention costs or knowledge loss.

Focus on earnings growth rather than revenue

IBM needs more acquisitions to grow its revenues but warns that earnings are more important than revenues at this
juncture. IBM's shrinking revenues are a portent of doom is curious. The company prefers to be driving greater revenues,
but the fact is that IBM's profitability and its commitment to return profits to shareholders remain robust.

To that end, IBM did sell off several lower margin hardware and software lines of business, including its Intel-based lines
of personal computers and servers to Lenovo; its chip foundry business to GlobalFoundries; its Lotus Notes/Domino
franchise to HCL; and a handful of low-level mainframe applications in order to devote full attention to higher margin
offerings. Except for the Red Hat deal, IBM has yet to either acquire another company that has significantly improved
profit margins.