Sample Business Studies Paper on Case Study International Business Machines Corporation


The International Business Machines Corporation is also known as IBM. This is an American conglomerate information technology company that has its headquarter in Armonk, New York, in the United States of America. IBM which is incorporated in New York was founded in Endicott as a Computing, Tabulating and Recording Company in 1911 which was later renamed IBM in 1924. The company which produces and vends computer software and hardware alongside the provision of hosting and consulting services has operations in more than 170 countries globally. Additionally, as an organization, IBM is a leading researcher being on record as having the most patents spawned by a business consecutively for twenty-six years. IBM which is incorporated on the Dow Jones is among the world’s largest employers with a workforce of more than 350,000 employees who are commonly referred to as “IBMers”.

Threats in IBM Top Markets

Numerous factors influence the performance of any business. IBM’s fiscal performance is directly connected to the organization’s capability to address the external factors associated with the strong intensity of the force of competitive rivalry. These competitive forces can either be moderate, weak or strong forces. It is important to note that the rates at which the two forces hinder the strategy implementation process do vary. The five major threats in IBM’s top markets are; bargaining power of suppliers, competitive rivalry, the threat of substitutes, Threat of new entrants and bargaining power of buyers or customers.

The bargaining power of suppliers has a moderate effect on IBM hence it determines the price, quality, and supply of materials available in the business. The bargaining power of suppliers is an important tool that is in cooperated in IBM’s corporate social responsibility strategy( Lattemann et al, 176). Generally, high supply is an external force that has minimal threats to IBM. For instance, a change in the supplier’s mode of operation will have a considerably low impact on IBM if a supplier changes his or her operation mode. It is important to note that the size of the supply is directly proportional to supply power. It is also important to note that if the company fails to acquire adequate supplies of materials it requires for its business from other sources will lead to the strengthening of the bargaining power of the supplier that they currently have at their disposal.

Competitive rivalry is another threat is faced by IBM. Competitors in the market impose pressure on the company in terms of market share, pricing, and profits, among other changeable relevant to the information technology In the business ecosystem. To this end, for IBM to fend-off competition in the ever-competitive market, it has to improve on its products or services(Lattemann et al, 175). The entrance of new firms is another threat faced by IBM as they bring competition to the already existing company. These new entries can take over IBM’s market shares which may intern lead to the incurring of losses since IBM’s customers might opt to go for products offered by the new business. The introduction of substitutes in the market is another major threat to IBM as it may lead to a reduction in revenues of any business. It is important to note that customers tend to go for new and unique products that have features that appeal to their tastes. The final threat that IBM faces is the Bargaining of Customers who are the main sources of the company’s revenues and are important as they directly affect the profits made by IBM(Lattemann et al, 178). The number of customers that any business has determined its bargaining power.

IBMs VRIO Analysis

As a company, IBM analyses its resources to evaluate its competitive advantage and thus comprehend its place in the business environment as well as know its potential weaknesses.


The IBM VRIO Analysis indicates that the value of its financial resources is highly valuable thus aiding in external investment while averting outside threats. The analysis also portrays a workforce that is very valuable as compared to its competition. IBMs employees are highly trained making them more productive thus maximizing output which in turn transforms into positive returns for the company. Besides, IBMs employees are steadfast and dedicated making the company’s retention level high leading to a reduced labor turnover. This, in turn, translates to a greater worth for IBMs customers’ goods. Due to the company’s valuable patents, IBM has been able to wade off competition easily resulting in greater revenue for the company at large(Kamran, 1990). The mode of distribution at IBM is also a very valuable resource for the company as it helps in reaching out to more customers. On the contrary, development, and research is not a valuable resource for the company as innovation is proving to be a costly venture as the company has realized minimal innovations and breakthroughs in the past years.



IBMs financial resources are proved to be rare according to the company’s VRIO Analysis. This is because only a few companies within the computing industry possess strong economic assets. This result in IBM facing minimal competition from its competitors in this regard.


It has proved to be very difficult to imitate IBMs financial resources as they are costly. These resources have been obtained by the company For many years of operation thus new entrants into the industry may find it rather difficult to copy their design. Additionally, IBM’s patents are very difficult and costly for other companies to duplicate as identified by IBMs VRIO analysis (Kamran, 2000). On the other hand, it is not costly to imitate IBM employees as noted by the company’s VRIO analysis as other companies are also able to train their workforce to advance their expertise. These companies can also poach IBMs employees and offer them an attractive package thus posing competition in this area as far as IBM is concerned.


IBM’s financial resources are structured in such a way that they capture the company’s value as identified by the VRIO Analysis of IBM. These resources help the company to invest strategically in the right places. The Patents of IBM, on the other hand, are not well organized as identified by the IBM VRIO Analysis making the company not utilize these patents to the maximum(Kamran, 1980).

Conclusion: IBM’s Business And Corporate-Level Strategies And Recommendations

Although IBM is strategically positioned in the industry, there are substantial challenges which are associated to the weaknesses of the business, and the opportunities and threats in the external environment. To this end, IBM has formalized some strategies and that will help it in dealing with the threats it faces in the market. One of These strategies is horizontal integration whereby IBM can either merge with another business entity or acquire a new model of business operation which will aid in warding off competition through the exploitation of technological integration opportunities. Another fundamental strategy is vertical integration whereby a business cooperates with different businesses and makes it one. This leads to the improvement of the bargaining power of IBM. Diversification is another corporate strategy IBM uses to improve its scoop of market shares as it enables the business to venture into risks exposed in the information technology market.


Works cited

Bilir, L. Kamran. “Patent Laws, Product Life-Cycle Lengths, and Multinational Activity.” The American Economic Review, vol. 104, no. 7, 2014, pp. 1979–2013. JSTOR,

Lattemann, Christoph, and Ilan Alon. “The Rise of Chinese Multinationals: A Strategic Threat or an Economic Opportunity?”Georgetown Journal of International Affairs, vol. 16, no. 1, 2015, pp. 172–179.,