IBM's strategic goals are to grow annual revenues by at least 5% and increase earnings per share by at least 10%. Its strategic plan involves openness by sharing innovations and collaborating with customers and rivals to reduce the cost of providing services. The document outlines IBM's SWOT analysis, identifying strengths like intellectual property and R&D, weaknesses such as high costs and employees, opportunities like open-source and standards, and threats like low-cost competition and outsourcing. Strategies are developed to leverage strengths and opportunities while addressing weaknesses and threats.

1. What is IBM’s Strategic Goal(s)?
To grow revenues at least 5% each
Formulating Business year
To increase earning per share at
Strategy Using least 10%
SWOT Analysis
IBM Case
(Solutions)
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What is IBM’s Strategic Plan(s)? SWOT Internal Analysis-Strengths
“Openness”-
Openness” Valuable intellectual property,
– sharing IBM innovations software, patents, ideas...
– collaborating with customers and rivals Talented work force
Reduce the cost of providing services Research & development ($5.7
billion)
A multi-national organization
multi-
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2. SWOT Internal Analysis-
Weaknesses SWOT External Analysis-Threats
260,000 expensive employees Low-cost generic competition
Low-
High operating costs (commoditization)
Outsourcing
New competitors in services market
(e.g., Dell, Accenture)
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SWOT External Analysis- SWOT Analysis
Opportunities match strengths with opportunities
Collaborative innovation Strengths Opportunities
Open-source
Open- • Open-source
•Valuable intellectual property Open-
Expensive products of competitors •Talented work force
•Research & development
• Standards→economic
Standards→
expansion
Accepting standards brings economic
expansion
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3. SWOT Analysis
match weaknesses with threats Develop Strategies
Weaknesses Threats to exploit opportunities in areas
where the organization has strengths
•Expensive workforce • Low-cost competition
Low-
•High operating costs • Outsourcing to defend against threats in areas
• Bigger competitors
where organization has weakness
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Example Example
Strengths Opportunities Weaknesses Threats
•Valuable intellectual property • Open-source
Open- •Expensive workforce • Low-cost competition
Low-
•Talented work force • Standards→economic
Standards→ •High operating costs • Out sourcing
•Research & development expansion • Bigger competitors
Strategy
Tactics Expectations Tactics Strategy
• Support open-
• Utilize workforce
source Making pie bigger
Openness more efficient
development IBM can sell services Reduce
• Shutdown
• University Cost of Services
operations in EU
Programs
• Move to low cost
• Give precious IST 301/ A. Konak 11
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technology away
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