In this new age of recession, companies are constantly having to reinvent themselves to remain relevant. One good place to look for ideas is the competition. Sometimes a competitor can give a business insight. Competitors also serve as a gauge of how well a company is doing in a particular territory based upon the number of accounts they steal from them! Strong competition can make or break a business depending on how well the company can adapt.
IBM is synonymous with big business and fortune 500. IBM is also known however as a company that has gone through many transitions. Over the years, the stock price of the company has risen and made some wealthy and fallen and put a dent in the retirement funds of others. The company lost the pc battle against Dell, HP, Sony, Acer and others. The company made the decision to sell the PC Group to Lenovo while still facing strong competition in the server market from businesses such as Dell, Hitachi, HP, and, who can forget, Sun Microsystems.
IBM has often led the way when it comes to innovation and reinventing. They have more patents on the books than most technology companies and they have stood the test of time.
IBM is leading the way again with the proposed purchase of Sun. One smart way to take out your competition and steal their ideas at the same time is to buy them. Although IBM is not the first major company to buy their competition (remember HP and Compaq), IBM is the first to make considerably a bold move during a recession. Is it a gamble? Only time will tell.
There are banks that have purchased the competition, such as Wells Fargo purchasing Wachovia or JP. Margan Chase purchasing Washington Mutual. Some have seen positive results since such purchases. How will this strategy work for a technology company during these economic times? IBM will provide the litmus test. If you cant beat them, buy them! Is this the right philosophy during hard economic times?
