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BUS 6320 CSU IBM at the Crossroads Case Study

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IBM at the Crossroads. Case Study
Nguyen Quang Trong
Columbia Southern University
BUS 6320, Global Strategic Management
Instructor: Dr. Michael Morris
July 10
th
, 2021

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Introduction
The IBM at the crossroad case is an example of how to deal with real-life business
challenge in the world today. It is a practical case with the issue of IBM in 2011-2014 period
when the total revenue of the company declined from $106 billion to $92 billion, stock price
failed from $195 in 2012 to $160.44 in 2014 while S&P500 increased from 1778 in 2012 to 2058
in 2014 (Rothaermel et al., 2020). That is the time when IBM changed the strategy from selling
hardware (server, storage) to software and service. That why, the profit margin of the company
increased, from over 35% in 2015 to nearly 50% in 2014. Figure 1 illustrates the total revenue
and profit of IBM in the period, 2011-2014:
Figure 1
IBM Gross Profit and Total Revenue from 2011 to 2014

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1 IBM at the Crossroads. Case Study Nguyen Quang Trong Columbia Southern University BUS 6320, Global Strategic Management Instructor: Dr. Michael Morris July 10th, 2021 2 Introduction The IBM at the crossroad case is an example of how to deal with real-life business challenge in the world today. It is a practical case with the issue of IBM in 2011-2014 period when the total revenue of the company declined from $106 billion to $92 billion, stock price failed from $195 in 2012 to $160.44 in 2014 while S&P500 increased from 1778 in 2012 to 2058 in 2014 (Rothaermel et al., 2020). That is the time when IBM changed the strategy from selling hardware (server, storage) to software and service. That why, the profit margin of the company increased, from over 35% in 2015 to nearly 50% in 2014. Figure 1 illustrates the total revenue and profit of IBM in the period, 2011-2014: Figure 1 IBM Gross Profit and Total Revenue from 2011 to 2014 3 (Rothaermel et al., 2020, p. 18) Moving to new area of business, software and cloud service, can bring good profit for the company, but in another hand, it brings more strong competitors. Amazon and Google are the powerful service providers in cloud service for many years. Over 100 years, this is the time IBM has to take the biggest change, a crossroad, to move up if it does not want to go behind its rivals. This case study involves the main issue of the company that requires the innovation to overcome the challenge and success in business. Organiz ...
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