Analysis Macro And Micro Environment Of IBM

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The world has grown increasingly complex, resulting from the greater interdependence among world economies (Thompson, 2002). Successful organization is largely determined by how well the organization adjusts all its tangible and intangible properties to keep itself on track with its surrounding (Armenakes & Bedeian, 1999). Strategy was concerned to manage firm’s activities and resources to the environment in which it operates. This essay will analyse the micro and macro external environment in the part five years (2000 to 2006) of IBM Company by using PESTEL and five forces model to analyse in the first part. The second part will discuss about the advantages and disadvantages of the two possible alternative strategies for IBM.

Part 1: Analysis of Micro and Macro External Environment

1.1 PESTEL Analysis

The external factors can be divided into six broadly categories which are political, environment, social, technology, environment and legal (Johnson, 2005). Such external factors usually are out of the firm's control and sometimes present themselves as threats. In this case, political factor, environmental factor and technology factor will be used to analyse the computer technology industry.

Political factor

The Iraq War is an ongoing war which began with a United State led invasion of Iraq in 2003. This war affected to the world economy, especially, USA who directly war with Iraq. Fear of a possible U.S. led war with Iraq soured investors’ sentiment in U.S. stock market. Furthermore, technology stocks in European market plunged following down results from sector giants Microsoft and IBM stocks fell down (CNN.com). This is because of everyone is negative on Iraq and in combination ...

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...ion.cnn.com/2003/BUSINESS/01/17/markets.europe/index.html. Accessed on 31/5/2007

• My solution info.com IBM market share

http://www.mysolutioninfo.com/news-display.aspx?Code=960&t=IBM%20Number%20One%20in%20Worldwide%20Application%20Development%20Software%20Market%20Share. Accessed on 1/6/2007

• Network world U.S. military

http://www.networkworld.com/news/2006/101206-us-military-to-test-ibms.html?page=1 Accessed on 29/5/2007

• New.com IBM layoff employees

http://news.com.com/IBM+to+cut+almost+1%2C600+more+jobs/2100-7252_3-6187552.html?tag=topicIndex Accessed on 2/6/2007

• IBM company

www.IBM.com Accessed on 28/5/2007

• IBM transfers top buyer to China Sold PC business to Lenovo

http://news.bbc.co.uk/2/hi/business/6045482.stm Accessed on 30/5/2007

• SARS BBC News

http://www.bbc.co.uk/health/conditions/sars1.shtml#what_is_it? Accessed on 1/6/2007

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