IBM Culture in Its Architecture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of IBM Culture in Its Architecture
In 1992, Lou Gerstner was the CEO of IBM during a period where the firm was losing money and a turnaround was desperately needed. In a bold decision, Gerstner chose to build a new headquarters in Armonk, NY that had strict limits on expandability. His idea was to use the building--with its design and architecture--to change the culture of IBM. Justification to shareholders for a large capital expenditure when the firm was losing $5 billion by year and laying off nearly 25,000 employees was an extreme challenge for Gerstner. However, he was adamant in his vision, and wanted to create a culture with fluid, unobstructed communication between divisions. Gerstner also wanted to eliminate bloated overhangs within the organization on cost, personnel, and physical structure levels. The challenge to the architects was to articulate Gerstner's ideas into form.
Swot Analysis of "IBM Culture in Its Architecture" written by A. Eugene Kohn, Kerry Herman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gerstner Ibm facing as an external strategic factors. Some of the topics covered in IBM Culture in Its Architecture case study are - Strategic Management Strategies, Design and Organizational Development.
Some of the macro environment factors that can be used to understand the IBM Culture in Its Architecture casestudy better are - – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing,
there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of IBM Culture in Its Architecture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in IBM Culture in Its Architecture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gerstner Ibm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gerstner Ibm operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of IBM Culture in Its Architecture can be done for the following purposes –
1. Strategic planning using facts provided in IBM Culture in Its Architecture case study
2. Improving business portfolio management of Gerstner Ibm
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gerstner Ibm
Strengths IBM Culture in Its Architecture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gerstner Ibm in IBM Culture in Its Architecture Harvard Business Review case study are -
Ability to lead change in Organizational Development field
– Gerstner Ibm is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Gerstner Ibm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the IBM Culture in Its Architecture Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Gerstner Ibm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Gerstner Ibm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gerstner Ibm has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Gerstner Ibm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in IBM Culture in Its Architecture Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Gerstner Ibm has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in IBM Culture in Its Architecture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Gerstner Ibm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gerstner Ibm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Gerstner Ibm is one of the most innovative firm in sector. Manager in IBM Culture in Its Architecture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Gerstner Ibm has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gerstner Ibm to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Gerstner Ibm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gerstner Ibm has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Gerstner Ibm is one of the leading recruiters in the industry. Managers in the IBM Culture in Its Architecture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Organizational Development industry
– IBM Culture in Its Architecture firm has clearly differentiated products in the market place. This has enabled Gerstner Ibm to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Gerstner Ibm to invest into research and development (R&D) and innovation.
Weaknesses IBM Culture in Its Architecture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IBM Culture in Its Architecture are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Gerstner Ibm supply chain. Even after few cautionary changes mentioned in the HBR case study - IBM Culture in Its Architecture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gerstner Ibm vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Gerstner Ibm has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - IBM Culture in Its Architecture should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study IBM Culture in Its Architecture that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case IBM Culture in Its Architecture can leverage the sales team experience to cultivate customer relationships as Gerstner Ibm is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As IBM Culture in Its Architecture HBR case study mentions - Gerstner Ibm takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study IBM Culture in Its Architecture, in the dynamic environment Gerstner Ibm has struggled to respond to the nimble upstart competition. Gerstner Ibm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Gerstner Ibm needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study IBM Culture in Its Architecture has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Gerstner Ibm 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, A. Eugene Kohn, Kerry Herman suggests that, Gerstner Ibm is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Gerstner Ibm has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the IBM Culture in Its Architecture HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Gerstner Ibm has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study IBM Culture in Its Architecture, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities IBM Culture in Its Architecture | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study IBM Culture in Its Architecture are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gerstner Ibm is facing challenges because of the dominance of functional experts in the organization. IBM Culture in Its Architecture case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Gerstner Ibm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gerstner Ibm can use these opportunities to build new business models that can help the communities that Gerstner Ibm operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Gerstner Ibm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gerstner Ibm can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gerstner Ibm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Manufacturing automation
– Gerstner Ibm can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gerstner Ibm to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Gerstner Ibm to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gerstner Ibm in the consumer business. Now Gerstner Ibm can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gerstner Ibm can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Gerstner Ibm can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Gerstner Ibm to increase its market reach. Gerstner Ibm will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gerstner Ibm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Gerstner Ibm has opened avenues for new revenue streams for the organization in the industry. This can help Gerstner Ibm to build a more holistic ecosystem as suggested in the IBM Culture in Its Architecture case study. Gerstner Ibm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats IBM Culture in Its Architecture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study IBM Culture in Its Architecture are -
Regulatory challenges
– Gerstner Ibm needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Gerstner Ibm needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gerstner Ibm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Gerstner Ibm high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Gerstner Ibm has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Gerstner Ibm needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Gerstner Ibm will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Gerstner Ibm in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Gerstner Ibm is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gerstner Ibm can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study IBM Culture in Its Architecture .
Consumer confidence and its impact on Gerstner Ibm demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Gerstner Ibm business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study IBM Culture in Its Architecture, Gerstner Ibm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Gerstner Ibm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of IBM Culture in Its Architecture Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study IBM Culture in Its Architecture needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study IBM Culture in Its Architecture is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study IBM Culture in Its Architecture is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of IBM Culture in Its Architecture is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Gerstner Ibm needs to make to build a sustainable competitive advantage.
