Ibm's Challenges

IBM’s challenges

IBM faced a number of challenges. Firstly, emerging countries

have posed threats and opportunities, because Indian services

firms, such as Infosys, Wipro, Tata and Cognizant have been

able to compete more aggressively with IBM and its rivals

Accenture, EDS and Hewlett Packard. Now they are all increasing

their Indian workforce. Secondly, IBM has to decide what

makes a successful multinational company in a global market

and as a result what the company must do to generate the

growth its shareholders demand.

IBM’s boss, Sam Palmisano, explained in a speech at Insead

in 2006 that the model of an international company had

passed through three stages. The first was the nineteenth

century

international model where firms were based in one

country and sold goods through sales offices in their international

markets. The classic multinational followed in which the parent

company created smaller versions of itself in its various country

markets. The latest model is the ‘globally integrated enterprise’

in which the strategy, management and operations are developed

as a single entity. It is based on having the right cost, the

right skills and the right business environment, so that