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6.3.2.Objectives

- Cost Structure

IBM continuously directs investments into its growth initiatives in order to improve cost

structure. Its main goal is to focus on more profitable services and phase out products and

services that are no longer generating public interest. This has allowed the company to

continue to operate profitably despite seeing a decline in revenues in recent years. It

currently combines an increase in investments in cloud and analytics with leveraging

lower-cost talent.

IBM’s cost structure is very much driven by investing into its people and customer

acquisition.

Additionally, the shift towards service and app development has resulted in increasingly

lower qualified service employees that are cheaper to retain than skilled resources.

6.3.3.Business Model Development through Corporate Strategy

Design: IBM SWOT Analysis

Internal Environment

- Resources and capabilities
1. Patents- Most of the software technology that IBM produces has been patented in US

prevent it from copied by other business. This business model helps IBM to preserve

its market share.

2. Brand name- IBM as a brand name has a strong value in it. They have a strong client

base who prefer IBM because of its brand value and stick with throughout long time.

In the last decade IBM has grown as a brand in IT operations and strategy consulting

and it customer base has increased drastically.

3. Skilled Employees- IBM has one of the best set of skilled employees. Employees are

found to have very high qualification and have a length of experience on their resume.

4. Innovations- IBM is very innovative company, their hardware segment is known to

produce first tablet- laptop model with rotating screen technology. They are also

known for their innovative business and strategy models in their global business

By : Enas Mekki Managing Intellectual & Human Capital