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as a multinational corporation


 
 










 


International Business Machines, IBM, is a multinational computer, technology and IT consulting

corporation headquartered in New York, United States. IBM manufactures and sells computer hardware
and software (with a focus on the latter), and offers infrastructure services, hosting services, and
consulting services in areas ranging from mainframe computers to nanotechnology. IBM has been well
known through most of its recent history as the world's largest computer company and systems integrator.
With eight research laboratories worldwide, IBM has over 407,000 employees including scientists,
engineers, consultants, and sales professionals in over 200 countries.1

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IBM raised competitiveness such as knowledge from doing global business, technical Know-how
which can make them differentiate, and knowledge-based network which help to share these things timely.

When the 3rd party is delegated, IBM will lose a significant portion of control on the market.
Managing product, pricing, distribution and advertising in the headquarters strengthened the control of
IBM on the local market, and then products can be delivered more efficiently. In addition, since IBM has
specific computer technology that can easily be copied, they can protect and control their technology by
adapting to the local market rather than exporting.

It is possible to utilize local characteristics such as government policy and human resource. By
forming a subsidiary in the country, they can get around a tariff wall or the regulations and benefit from
government support. Besides, they can get human resource in the local. For example, the conditions of
India such as many high quality staff people in the IT field, using English, 12 hours difference between
India and Silicon Valley (California's high-tech area) make themselves do a role as a subcontractor and
develop in IT field. Consequently, India became the world of software development base and performed
as more than a subcontractor by giving help to collect information and develop human resource.

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It is not easy to compete with local businesses who better to understand the market as a foreigner.
To overcome this limitation, IBM used localization strategy. They recognize that the familiarity of local
language and culture is the basic assets of the business in these areas. To increase the operating
efficiency, local people who are familiar with local conditions are employed. Thorough localization has
been seeking in marketing and sales, and personnel issues.

However, as the threshold of the border is gradually decreasing and markets have been combined
into one, system needed to change the structure to quickly meet the needs of many customers. In
addition, because of Localized Management, branch office in each country was given the excessive
autonomy, so inefficiencies had been increasing and competition between each country became stronger.
IBM was needed macro-and long-term strategy, so they modified their global strategy in 1995. They
decided to give more weight to Globalized Management than Localization Management to manage
product development and sales services to the global dimension.

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IBM homepage(http://www.ibm.com)