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L responsibility of all the business groups. The only exception is China Research center that reports directly to Ramp。s sole PC production base in China) OEM efforts ? OEM mostly to Taiwanese players, such as Acer Strategy ? No future investment to setup more PC manufacturing JVs in china ? Emphasis on OEM approach Source: Literature research, interview Source: literature research, interview SEC China010821BJIBM 14 IBM IS PUSHING TOWARD FLATTENED CHANNEL STRUCTURE AND SECOND AND THIRD TIER CITIES IN GEOGRAPHIC COVERAGE Sales and distribution Guiding principles Change program ? Push for flattened channel structure ? Expand to second/third tier geographic areas ? Increase sales revenue by 20% in 2020 ?“Blue star plan” Source: Literature research, interview Distribution channel City coverage Target ? 3,000 – 4,000 dealers ? Direct and strong channel management and control by IBM Current ? Over 2,000 dealers ? No direct channel management by IBM ? Over 30 cities ? Over 200 cities Source: literature research, interview SEC China010821BJIBM 15 IBM EMPHASIZES AND FOCUSES ON TOTAL SOLUTION AND SERVICE PROVISION Total solution and service Target ? To be No. 1 globally as a total solution provider and service provider Initiatives ?“Blue V project” –Started global implementation in March, 2020 –Targets at NetGens, panies that conduct business mainly on the Inter platform –Provides customers hardware, software, consulting, training, sales and marketing, financing, outsourcing, and potential partnership opportunities ?“Hardware + Software + Service” Source: Literature research, interview Competition in the next three years is based on the strengths in hardware and software. In the 5 years’ time, service will be another key success factor – Zhou Weikun, Managing Director, IBM China Source: literature research, interview SEC China010821BJIBM 16 ORGANIZATION AND OWNERSHIP 4. Value chain strategy 5. Organization and ownership 6. Financial performance ? Focus on – Marketing, advertising and promotion – Distribution (channel and sales force) ? Organization structure ? Ownership structure ? Sales ? Profit 2. Strategy 3. Product /market ? Mission ? Vision ? Corporate strategy ? Market position ? Key product offerings ? Key customers ? Pricing 1. Background information ? Location ? Management team ? Starting year ? Number of employees ? Era analysis SEC China010821BJIBM 17 IBM FOLLOWS CHINA HEADQUARTER HOLDING Pamp。 development focus is currently application software Ramp。D base ? Established in 1995 (IBM is one of the first MNCs that set up Ramp。s ponents in return 2020 target ? Increase revenue by 20% * IBM’s PC business showed sur