IBM Global Services provides products and services related to advanced information technology to clients in more than 170 countries worldwide, which McShane and Von Glinow (2005) would consider to reflect the advanced communication skills this company has developed. There are various sections of IBM that contribute to the success of the company by decreasing costs and increasing profitability, including infrastructure, strategic outsourcing, integrated technology, global business, application management and consulting and systems integration services.
The issues IBM faces include increased competition and issues surrounding outsourcing to offshore companies, which are similar to the issues Global Communications is dealing with. However, IBM is a strong company and the actions taken to prevent these issues have resulted in success and profitability. IBM Global Services have many competitors in various markets, including Accenture, Capgemini, BEA systems, Oracle, Sun Microsytems and Microsoft. These companies are large, successful players, which threaten the market share and profitability of IBM.
To be a leading competitor in IT services, IBM offers an all-encompassing, one-stop shop solution for their clients by providing varying levels of support and services. According to Datamonitor (2007) IBM offers services in application development and infrastructure management, data storage, networking and technical support. By having a high standard of quality service IBM has developed strong a brand name, which has enabled them to be recognized as a reliable company to their clients around the world and consequently allowed them to withstand their competitive edge through challenging economic times.
Badaracco and Webb (2004) would agree that the results of success and profitability reflect the fact that IBM holds true to their values of quality and reliability. To reduce costs and improve efficiency IBM has expanded to markets in North America, Europe, India and China. IBM’s Indian based operations have increased revenues of 37% per year, and given IBM access to the Indian market (Datamonitor, 2007). The future prospects outsourcing of company services brings to the profitability and expansion capacities of the company are significant as is also projected for Global Communications.
Overall, IBM Global Services faces increasing competition pressures, however, through outsourcing, offering diverse products and being known worldwide as a reliable company through their brand name, these issues can be dealt with and expansion possibilities and increased revenues have resulted from these efforts. The outcome of IBM’s ability to provide clients with any service they require and be a global competitor and have resulted in profits of 44. 9% from 2005 to 2006 (Datamonitor, 2007). Saudi Aramco – Rachel Olsen
Saudi Aramco, or Saudi Arabian Oil Company, has its headquarters in the Kingdom of Saudi Arabia. This state-owned company is the world leader in crude oil production, which is divided into various departments including, exploration and producing; refining, marketing and international; engineering and project management; operations services; finance and industrial relations (Datamonitor, 2007). The company has partnerships and joint ventures with companies including Shell, ExxonMobil, and Texaco to expand refining and marketing into the Southern and Eastern parts of the United States and other parts of the world.
According to Datamonitor (2007) Saudi Aramco has enhanced its market position due to strong oil and gas reserves, however, they lack in worldwide retailing and industry pressures, such as the rise in steel prices, industry consolidation and the political instability of the country, continue to threaten the company’s long term success. Saudi Aramco does not have the retail exposure that companies like ExxonMobile and shell have through their gas stations, however, joint ventures and equity interests with companies like this have increased their exposure to these markets.
Intense competition with other companies like ConocoPhillips and other large oil and gas companies who have huge financial backings to become leading producers in the United States threaten the revenue growth of the company, however, with the exposure to larger International markets with the joint ventures of other company’s Saudi Aramco is securing their future in the crude oil market and continue to be an industry leader producing 8. 9 million barrels a day (Datamonitor, 2007). The Middle East countries including Saudi Arabia have always had and continue to have disturbed political and social conditions.
Datamonitor (2007) states that the ongoing unrest and threats of military action and attacks by terrorist groups, like Al Qaeda, cause disturbances in the company’s productivity, affect the supply and pricing for oil and gas and cause the need for enhanced security worldwide. Although there is a need for increased security due to these issues, which cut into the company’s revenue resulting in higher product costs for consumers, the enhanced security keeps refineries and other departments safe to continue productions.
Overall, although Saudi Aramco faces many issues including decreased exposure to retail markets, increased industry consolidation and competition, and political instability they continue to be the world leader in crude oil production. Saudi Aramco recognizes these pressures, however, can identify many opportunities for the continued success of the company including international expansion, continuous growing global energy demands and many joint ventures with other large oil and gas companies.