International Case Study: IBM
At that time this strategy was very new to the existing firms so assistance was present for IBM rivals. This strategy worked out pretty well for the company. Actually IBM was the first firm to charge for software.
In 1969 IBM decided to sell the software and hardware separately. This decision took IBM to the court room, later the company supplied the System “Control programming” for free of charge and IBM only charged for “Program Products”. This was the era of software development when the company reintroduced its product line for software (IBM archives, 1969).
So Localization strategy played an immense role to make software according to the customer’s preferences. 2.
By the sass the classic multinational strategic relocation was no longer working well for IBM. Why not? Answer: During all the time IBM kept Its R and product manufacturing at New York and Vermont which made its production cost higher than the competitors. In the year 1990 three India outsourcing firms-Data Consulting Services, Informs, and Wiper, came to the lime light with their enormous productivity and most importantly lower product prices.
This was because at that time India offered a huge number of talented IT trained labor force at a cheap remuneration compared with the other countries. In the case of IBM localization may had given the firm a competitive edge but in this fierce battle can be only won by cost reduction strategy which led for the adoption of transnational strategy (Hill, 2012-2013). 3.
What are the strategic advantages to IBM of Its globally Integrated enterprise strategy? What kind of organizational changes do you think had to be made at IBM to make this strategy a reality?
Answer: The Globally integrated enterprise strategy or he transnational strategy is perceived to be the most effective for the multinational enterprises as it helps the firms to produce at a very low cost, helps to increase the company’s productivity and efficiency. IBM needs to have an active headquarter where the information needs to be processed for product development, production, R&D, finance and marketing- at a very systematic, efficient and effective manner. The communication between the Headquarter and the rest of the operations should be maintained through advanced software for the omission of errors. Which strategy should you think IBM should pursue? Answer. I BUM Ana already Implemented ten transnational strategy wanly already bought its products at a very competitive position at the global market.
It is running at a very steady pace in it’s the course of operation but due to the adoption of transnational strategy the company moved away from effectively understanding the local customer’s taste and perspective where it went towards a very global product development. All the new products are very standard for the whole world with a light customization for the geographical differences.
Apart from the transnational strategy I would suggest IBM to startup hiring local market research firms at the markets where IBM already exists, who will help IBM to get the right data from the local market which will result at a very positive effect on the product development for that local market according to Mark Foster, Group Chief Executive, Management Consulting & Integrated Markets, Accentuate. This strategy will help the company to understand all its markets and will led the company toward a more secure and profitable future.
