The Evolving Strategy of IBM Company

When Sam Palmisano joined IBM it was already a classic multinational enterprise. To be considered a multinational enterprise meant that the company owns business operations in more then one country. IBM didn’t start of as a multinational enterprise but it stared with selling its products through oversea sales offices. To better improve the way they had goods produced and sold, they adapted to the classic multinational enterprise. There are many potential benefits to being a classic multinational enterprise. One of the benefits is the possibility of having cheaper resources of raw materials to build the products.

Another one would be the possibility of having cheaper labor for production.

One of the great things that can come out of being a classic multinational enterprise is the benefit that the citizens of the country (that the company resides in) receive. Most companies will provide jobs to the citizens, which increase the employment rate. Not only do they provide jobs to them, but also they usually offer training in skills that they may have not known before that they can use for their future career.

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In 1990 IBM started to move away from the multinational enterprise and into a globally integrated enterprise. This meant that they focused on “economics, expertise, and the right business environment.” The reason for this shift was due to “the globalization of the world economy, the global nature of many of IBM customers … and the emergence of fierce competition from enterprises in emerging markets”. Because of all the reason that were stated, the market began to be more competitive and IBM couldn’t afford to be in places that weren’t making as high as a profit as others.

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One of the greatest benefits of having a globally integrated enterprise is that they can locate their business for work and operations anyways based on the economics. In order for IBM to pursue this, they needed to specifically move their supply chain and operations to specific countries or areas where it would be more affordable and more profitable.

IBM is definitely pursuing a global standardization strategy to grow as a business. They already have a globally integrated enterprise and they seem to be trying to increase profits. They aren’t changing their quality of work, but they are pursuing ways to increase the economic sales. With the cheap cost of labor and materials, they are able to be more aggressive in the competitive market.

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The Evolving Strategy of IBM Company. (2016, Sep 22). Retrieved from

The Evolving Strategy of IBM Company

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