Question

How much of a competitive threat is IBM? How should Accenture best compete with them?

Answer 1

In terms of business strategy, IBM has a very robust and clear approach towards its business objectives. IBM has a focus on providing the best and most innovative technology solutions to its clients and along with that they have a keen eye on the value of their publicly listed share. In terms of competitiveness, the business wing of IBM keeps up with the market and keeps acquiring good technology firms based on market needs. Also, they have a track record of selling few of these firms when offered a good deal. This has helped them to gain a big brand value and it is 6^th in the world in technology space after tech giants like Apple, Google, Microsoft, Facebook and GE. They have a very strong R&D wing showing their dedication to developing new and innovative technologies. So, to summarize, IBM has a strong brand value along with global presence. They have a huge existing clientele. Their dedication to R&D shows their high investment for future proofing. Hence, it is a big threat to other competing tech firms in the space. Now, there are some weaknesses and issues that IBM is currently facing and competing companies like Accenture can capitalize on this to gain an advantage over IBM. Now, Accenture is the world’s largest consulting firm giving them a strong clientele as well. They have diverse capabilities and have a strong foothold in various spaces helping them with a continuous cash flow of income. One of the weakness IBM is facing today is that it has become too large of a company. The resources are being mismanaged and consequently they are even facing a high attrition rate. Accenture has been learning from this and they have tried to break down into smaller medium sized companies. This is a good strategy provided proper execution. This may help them get an edge over their contemporary IBM. IBM has more of a generalized approach towards their clients whereas Accenture has been proven to show expertise in a few sectors like healthcare, IT and automotive. So, this is another aspect wherein they can gain an advantage over IBM.