Analysis Macro and Micro Environment of Ibm Essay

1960 Words Jul 22nd, 2007 8 Pages
The world has grown increasingly complex, resulting from the greater interdependence among world economies (Thompson, 2002). Successful organization is largely determined by how well the organization adjusts all its tangible and intangible properties to keep itself on track with its surrounding (Armenakes & Bedeian, 1999). Strategy was concerned to manage firm’s activities and resources to the environment in which it operates. This essay will analyse the micro and macro external environment in the part five years (2000 to 2006) of IBM Company by using PESTEL and five forces model to analyse in the first part. The second part will discuss about the advantages and disadvantages of the two possible alternative strategies for
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Intensity of Rivalry: High
There are many computer software manufactures in today global market. Each manufacture tries to differentiate its product by creating new programmes that make a computer more powerful. Moreover, each manufacture also tries to build brand image and create customer loyalty by taking good care of customer with service after sale. Therefore, the intensity of rivalry in computer technology industry is quite high.

Bargaining Power of Suppliers: Low
IBM’s business employs a wide variety of components, supplies, services and raw material from a substantial number of suppliers around the world. Therefore, the manufactures can switch to the new suppliers if the suppliers cannot meet the requirements. In this case, IBM is the large global company which has high bargain power to the suppliers. They can force the suppliers to reduce price with the large amount of orders and meet the standard of requirement, otherwise, the will move to other supplies. Thus, suppliers’ power is particularly concerned low

Bargaining Power of Buyers: High
As IBM operates business in B2B market, most organizations always buy in large amount per one time. Therefore, customers have power to negotiate with the company. Moreover, IBM faces with a significant number of competitors who can be a choice for customers. This could effect to IBM as customers have more alternative to choose. Hence, the bargaining power

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