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... This approach views technology as a functional capability and the above components can be related to IBM, a technology-related publicly listed firm, which “thrives on fundamental technology innovation - an area of unparalleled
strength” (IBM Annual Report 2002). This paper shall look at the important components of technology strategy, the development of technology strategy in IBM, their success and provide recommendations on better ways of improving them.
Although IBM is in the IT industry, but it has always been two interrelated industries, one is computing and the other, is the application of computing to improve or transform some aspect of business. ...
The five points mentioned above will be critically analysed according to how a technology firm manages with strategy and in specific details, in relation to IBM. ... IBM has been moving away from commoditized segments of the IT industry and into areas which it can differentiate itself through innovation and by leveraging its investments in R&D (IBM Annual Report 2002). ... IBM is very much a company that believes in and deals enthusiastically with globalisation, they did not have significant foreign investments for the past years, however, the company took advantage of reasonable valuation levels and acquired several companies around the world, such as PricewaterhouseCoopers Consulting and six other strategic software firms. In 2000, IBM invested $1 billion to make Linux one of its core technologies for its entire line of servers, including laptops, workstations and PC. This form of investment acts as a dispersion of R&D activity and has been adopted by IBM to tap into alternative global resources. (IBM Annual Report 2000)
Attaining Complementarities
Technology strategy needs to complement the overall company strategy; it should include business, marketing, manufacturing, personnel, investment and financial strategy. ... However, IBM’s technology strategy was not very in pace with its advertising and promotion efforts. ...
Failure of Existing Strategies Which Do Not Integrate Technology Satisfactorily
In recent years, IBM has concentrated on its technology innovation strategy; emphasis was placed in moving away from commoditized segments of the IT industry and into areas in which it can differentiate itself through innovation and by leveraging its investments in R&D (IBM Annual Report 2002). Most high-tech companies would spend considerable amounts with acquisitions as the method for achieving growth, but organisations such as IBM, DEC and Hewlett Packard often achieved success by internal rather than acquired growth (Dodgson, 1989: 8). ... However, this was not the case in 2002, IBM’s R&D and engineering expenses declined 4. ... Technology integration is important to performance, large investments in R&D and capital equipment, reliance on advances in solid state physics and materials science, the significant role played by IBM’s research centre- all these practices associated with the IT industry stereotypes technology as a competitive weapon. ... IBM is moving towards a diversified business culture now; with its technology strategy incorporated into its corporate strategy, minutely, but surely. ... The next part of this paper will have an insight into the ways how IBM had developed technologies strategies and comment on their success and provide recommendations as well. ...
Identifying Product and Market Segments
IBM did not have a clear indication of their product and market segments from the beginning; they had radically changed their product line over time, from clocks and scales to tabulating machines to mainframes to Selectric typewriters to what they are doing today, that is, Information Technology. ... In the case of IBM, CEO Samuel J. ... ” This can be related to the areas of product R&D, management, and the product development process, which means that IBM utilises these important factors as their competence strategy. IBM’s brand and business model are very different from their competitors, they rely on the fusion of business insight and technology leadership to achieve what their competitors could not.
Approximate Word count = 3006
Approximate Pages = 12
(250 words per page double spaced)
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