Table of Content

Organization Practices, management role and

functions---------2
Organizational Structure
--------------------------------------------------3
Significant Problems
-------------------------------------------------------4
Alternatives
------------------------------------------------------------------5
Implementation
------------------------------------------------------------6
Appendix: Work Cited

Organization Practices, management role and

functions

C
V
E
P
O

Corporate level Strategy

(Decided by CEO
Discuss and give instruction to VP at meeting)
- Corporate goals and objectives:
The new corporate level strategy of IBM was to become one of the
leading
e-business

service providers

and

to

develop

new-commerce

engineering,
software and consulting services.
Development of corporate level strategy:
(Lead by Senior Vice President
VP make creative decision
General Managers implement and assign work
Program group work on assigned project)

De-emphasizing the manufacture of high tech hardware.

Increasing emphasis on providing customer with e-business

engineering, design and service.

Converting old data bases into new online system.

Improving efficiency by introducing web technology into their

internal business.

Corporate expanded scope of its new service as well as old

hardware business to serve smaller customer that were

previously
neglected.

Significant
Problems in
IBM:
IBM on Oct 19th
announced a sharply
lower

sales

and

revenues in the third

quarter,

revealing

some

potential

weaknesses
its

during

progress

of

transitioning into new

fields

like

data

analytics,

cloud

computing

and

mobile
applications. With the
companys net profit
falling 14 percent and
operating

earnings

declined 9 percent ,
the stock price of IBM
was sent to a drastic
fall immediately after
the report.
The primary issue in
IBM is that its growth
in

their

strategic

initiatives

and

expansion

into

the

new fields cannot yet offset the erosion in its traditional hardware,
software and services business. Martin Schroeter, IBMs chief
financial officer, insisted on the company's good performance in its
recently invested fields during the discussion of the latest earnings
report and concluded their actions as prudent despite the declining
revenue. He pointed that the company was at a transformation point
where IBM was moving out of areas without long term value and
looking for new opportunities across every industry. However, the
big decline in revenue as a results revealed that even the rapidly
growing new fields couldn't cover the loss of value in the old ones.
At this point, investors would only gain confidence to put their
money back into IBM if solid evidence on the new business rising
faster that the old ones are shrinking were shown. It is very possible
that the revenue would continue to act negative until IBM finds a
way to reach the equilibrium of their gaining and losing.
The secondary problem, however, is related to IBM's business
overseas. According to Schroeter's statement, the strength of the
dollar was responsible for 9 percent of the decline. This data
indicates IBM's vulnerability against the currency effect as a result
of having large amount to business aboard. This situation is every
likely to happen again if IBM doesnt no shift its emphasis from
foreign market to domestic ones and continues to expose their
revenue to the volatility of global markets.

Alternative to solve the problem:

Focus on Cloud Computing & Big-data
Despite the general decline indicated in the last report, the rapid
growth of IBM's cloud computing service resulted in total cloud
revenues of $7.7 billion in the twelve months leading up to the end
of 2015s first quarter although the popularization of Cloud
Computing brought a disastrous

impact on IBM's

traditional

businesses. Through Cloud Computing, low-end PC servers can be

congregated together and form one giant cluster, and the capability
provided by the cluster can be comparable or even outperform the
p-series servers of IBM. And it was the Cloud Computing technology
brought the substantial decline on the revenue of hardware sales,
because the cost for using IBM p-series server is remarkably higher
than that of using PC servers. The technological trend of IT industry
are the transformation to the Cloud Computing and Big Data
services, the performance of these product thus represent the future
and strength of a company. By focusing on this industry, IBM would
be able to meet the demand of the market better and increase its
sales.

Implementation
Step1: Research and Development (R&D):
Develop a cloud computing software , then integrate the cloud computing software

into the infrastructures based on IBM hardware or non-IBM hardware. The purpose
for this step is to make the "cloud computing software" work, and the fundamental
functions should be able to be used, the performance should be competitive with the
contemporary products provided by IBM's competitors, and should be cost efficient.
According to the chart, IBM has been spending less on technical development for the
past years, which is a opposite trend comparing to that of Apple. However, in the
2014 annual report it is said that IBM is investing $1 billion in IBM Bluemix to give
developers cloud-based tools to design, deploy and manage enterprise grade apps at
start-up speed, and also had another 4 billion invested in software as-a-service
acquisitions for business professionals. From these data we can tell that IBM is well
on its way to develop more competitive technologies, and in order to bring it to a even
higher level, a increase in R&D budget should be suggested.
Step2: Marketing & Sale:
The marketing department should promote this product through certain propagandas.
After certain recognition of the product, the staff including client representatives,
sales personnel, consultants, engineers should be ready for the new technology. First
client representatives should try to find the potential business opportunity for IBM's
Cloud Computing &Big Data technology, then our sales personnel will be involved to
provide detailed information about this technology and persuade our client to consider

it. After that, consultants specifically for our client's industry should provide
professional consultant services to our client and collect well standardized "client's
need" back to the technical department.
The recent ads on Cloud Computing and Big Data have done a good job in
incorporating variety of business strategies, for example, put down and heart string
(see in appendices). The next step is to make the promotion more available on
multiform of social media.
Step 3: Expand market-share and refine technology:
Expand the market-share of IBM's cloud computing and big data technology. As
more clients involved, more specific requirements will be added to the original
version of our technique. In IT industry, each client would have its distinct need, and
such needs will be collected back to IBM for furthering improvement of our cloud
computing & big data platform. Based on the information given by the consultants,
engineers will need to design the specific solution for the client, and they can get help
from R&D department if necessary. After that, our engineer team need to implement
the solution and provide training programs to our client that make our client
understand how to use IBM cloud computing and big data platform. On the other
hand, each successful project IBM made for its project is a good example and can be
used as reference for further sales promotion of cloud computing and big data
technology.

Work Cited
"IBM Research and Development Expense (Quarterly)." Fundamental
Chart. Sat. 07 May. 2016.
"2014 IBM Annual Report." IBM. IBM. Sat. 07 May. 2016.
"Apple's Research and Development Expenditure 2007-2015 |
Statistic." Statista. Sat. 07 May. 2016.
"Benchmark: IBM POWER8 vs. Intel Xeon Haswell." Xcelerits Blog.
Sat. 07 May. 2016.
"CIOZone.com - Professional Network for CIOs and IT
Professionals." IBM: Cloud Computing to Contribute $7 Billion in
Revenue By 2015. Sat. 07 May. 2016.
"Global Market Share Server System
Statistic." Statista. Sat. 07 May. 2016.

Vendors

2009-2015

"IBM Earnings: Revenues And 2015 Guidance Disappoints As

Restructuring Continues." Forbes. Forbes Magazine. Sat. 07 May.
2016.
"IBM Investor Briefing." IBM. IBM. Sat. 07 May. 2016.
Bottom of Form
"IBM Reports 2014 Fourth-quarter and Full-year Results." IBM News
Room. Sat. 07 May. 2016.
"IBM vs. Intel Corporation: The Data Center Battle Escalates -- The
Motley Fool." The Motley Fool. Sat. 07 May. 2016.
"IBM: Cloud Revenue Hit $7B In 2014." IBM: Cloud Revenue Hit $7B
In 2014. Sat. 07 May. 2016.
"Lost
in
the
Cloud?
IBM
Software
Revenue
Investors." MarketWatch. Sat. 07 May. 2016.Bottom of Form

Spooks

"New IBM Cloud Ad Campaign Targets Competitor Amazon - Web

Host Industry Review." Default Podcast. Sat. 07 May. 2016.
"New IBM Cloud Ad Campaign Targets Competitor Amazon - Web
Host Industry Review." Default Podcast. Sat. 07 May. 2016.
"Should IBM's POWER 8 Worry Intel? -- The Motley Fool." The Motley
Fool. Sat. 07 May. 2016.
"How IBM Stacks Up Power8 Against Xeon Servers." The Next
Platform. 13 Oct. 2015. Web. 4 Dec. 2015.

"IBM CEO Rometty: We Are Not Exiting Hardware." Digits RSS. Web.
4 Dec. 2015.
"IBM Cloud Computing Services Earns $7.7 Billion over the past Year
- IPWatchdog.com | Patents & Patent Law." IPWatchdogcom Patents
Patent Law IBM Cloud Computing Services Earns 77 Billion over the
past Year Comments. 29 May 2015. Web. 4 Dec. 2015.
"IBM Opens POWER Technology for Development." IBM PartnerWorld.
Web. 4 Dec. 2015.
"IBM Pays GlobalFoundries $1.5 Billion to Take over IBM's Chipmaking Unit." PCWorld. Web. 4 Dec. 2015.
"IBM Unveils OpenPOWER Consortium to Boost Cloud Ecosystem."
Cloud Pro. Web. 4 Dec. 2015.
"IBM's First OpenPOWER Server Targets HPC Workloads." HPCwire
IBMs First OpenPOWER Server Targets HPC Workloads Comments. 19
Mar. 2015. Web. 4 Dec. 2015.
"IBM, Backing Away from Hardware? NEVER!" The Register. Web. 4
Dec. 2015.
Lohr, Steve. "IBM Sales and Profit Dropped 14% in Third Quarter."
The New York Times. The New York Times, 19 Oct. 2015. Web. 4 Dec.
2015.
"Open POWER Consortium Aims to Expand the POWER Ecosystem
beyond IBM." DancingDinosaur. 7 Aug. 2013. Web. 4 Dec. 2015.
"OpenPower Unlocks Floodgates For An All-Chinese Server
Business." Forbes. Forbes Magazine, 20 Mar. 2015. Web. 4 Dec.
2015.