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Ibm Competitive Advantage

In: Business and Management

Submitted By rolex1234
Words 554
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How does IBM compete against rivals? What challenges does it face and why? In your opinion, does it have a sustainable competitive advantage?

IBM has experienced a large decline in its traditional hardware and software business over the past few years, with a share price decline of 20% from $200 to $150. The cause for this decline is majorly due to a shift in almost all industries to outsource IT and eventually run enterprise IT on the cloud, which brings significant cost advantages to organization. Traditionally every company would establish its own IT department, hire people to fill position and spend money on hardware, software and real estate to store the servers and mainframes. Handling such aspects of the business in house can be cost intensive and slow in adaptation to new industry standards.

The introduction of cloud computing has created a new environment for software and hardware companies to compete in. Revenue models are switching from single payment contracts with maintenance agreements to a subscription based pay what ever a company uses. This means that all the costs associated with developing H&S in house, the people the space are only to be paid as needed and never owned. This can lead to significant cost savings.

To address these changes in the IT industry IBM has taken on to master the cloud for enterprise IT in order to deliver a faster, cheaper computing solution for companies. Their strategy is based on data, analytics and security. On top of that IBM has realized that a large part of business will be done on mobile devices in the near future, therefore it is also working on making their solutions work mobile. Data will be the means to compete in the industry and even more importantly on the safety of this data. This general offering needs to be enriched by speed (real time analysis of data) and cognitive abilities to identify…...

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