IBM: Corporate Level Strategy

Essay by PaperNerd ContributorUniversity, Master's November 2001

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IBM operates primarily in a single industry using several segments that create a value by offering a variety of solutions that include, either singularly or in some combination, technologies, systems, products, services, software and financing. This may lead you to believe that IBM has adopted a corporate level strategy of concentrating on a single business unit, but this is only half the picture. For IBM there is not one general type of corporate strategy that best suits their needs, but a combination of both a concentration on a single business strategy as well as a vertical integration strategy.

A single business unit strategy means that IBM is concentrating on competing successfully within the confines of a single business unit. An advantage of choosing such a strategy is that the IBM can focus its total and collective resources to dominating and becoming successful in this business area. If IBM were to attempt to pursue some other strategy such as diversification, they might spread their resources out too thin, thus inhibiting them from taking advantage of some other opportunities that may come about due to a lack of available resources.

Another advantage to pursuing a single business unit strategy is that IBM is remaining within an area with which it has a great deal of competence and experience. This decreases the likelihood of IBM partaking in a venture that may be unsuccessful and it keeps IBM in an area where their existing capabilities and resources can contribute and add value.

But concentrating on just one business area may not be enough and so as previously stated, IBM has also adopted a corporate level strategy that involves vertical integration. Vertical integration can be seen in the corporate level strategy of IBM in their acquisition of various inputs such as the LSG Group Inc.,



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