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10/5/18, 5(55 PMCollection – MSA 603 Strategic Planning for the Admin ...

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Thread: Discussion Board 3-IBM Strategy Post: Discussion Board 3-IBM Strategy Author:

Posted Date: October 3, 2018 11:28 PM Status: Published Overall Rating:

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Rita Vasquez

IBM is in the business of making computer software and hardware, as well as some consulting services. As a company it would make sense after years of successful business that would be interested in integrating new industries into their corporate structure. There are a few options as far as integration goes. IBM could either acquire companies that are similar to themselves in order to achieve economies of scale and to increase product differentiation, or they move vertically in order to strengthen their supply chain. It is in this way that IBM would best be able to diversify into the telecommunications and cloud-computing data servicing: through vertical integration. Acquiring another company such as Adobe would allow them to help build more barriers to entry for software and cloud management. Coupling these two industries would allow IBM to use their competitive advantage of a core manufacturing that they already have in place and acquire another industry that once established would cost them almost nothing to add new customers to an existing base. If the software is in place it would be virtually free of charge for them to add new customers after the initial onset.

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