Strategy Formulation and Implementation
Assignment 2– IBM pivoting to Cloud Computing
1. What is your overall assessment of the competitive intensity of the cloud computing industry? Use Porter’s Five Force Model to assess the competition. Be sure to discuss each force completely with specifics and data.
Make your assessment in a table below
Force Your assessment Intensity level (Strong, moderate, low)
New Entrants Threat Discuss barriers, assess if high or low, industry attractiveness, give supporting data, etc. High?
Low?
Substitute Threat What is substitute(s), current and future, assess price/performance (e.g. lower cost, same performance? Same price, more performance?)
Rivalry
Buyer bargaining power Be sure to clearly indicate “who are buyers”
Supplier bargaining power Be sure to clearly indicate “who are suppliers”
OVERALL CONCLUSION Draw conclusion in terms of potentials for profits in the industry
Provide relevant commentary to respond to the question
2. From IBM’s perspective, why is the Cloud Computing an attractiveness industry? Use Industry Attractiveness matrix to assess, be sure to include supporting data from the article and any additional research.
• Use Week 2 material
• Do some research
• Complete the matrix below
• Provide relevant commentary to respond to the question
Industry Attractiveness a matrix:
Factor Weight (W) Rate (R) W X R
Industry size
Growth rate
Profitability
Intensity of competition
Regulations
(Optional- add any other relevant factor)
3. What is IBM’s competitive position in the Cloud Computing Industry? Using Weeks 2 and 3 class material, first identify critical success factors and then assess IBM’s position, that is, create a Competitive Positioning Matrix.
Refer to Week 2 discussions, identify 4-5 critical success factors, identify key competitors (Amazon, Microsoft, etc.), compare IBM against these (on a scale of 1 to 10), comment/discuss your observations
Use the following Competitive Positioning Matrix to assess IBM and its competition
Critical Success factor IBM Comp 1 (Amazon) Comp 2
(Microsoft) Comp 3
CSF 1
CSF 2
CSF 3
Etc.
Total
(rating 1=weakest; 10=strongest)
4. Develop pros and cons of 2 strategic options for IBM: 1) continue as is; 2) create a new company as discussed in the article. Your response must be supported with data and evidence
Take each Option and discuss in sufficient details of its pros and cons, make recommendation
Use a table to assess each option and then discuss key points:
Option Pros Cons
