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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 14 SEC China010821BJIBM 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 2023 ?“ 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 15 SEC China010821BJIBM 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, 2023 – 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 16 SEC China010821BJIBM 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 17 SEC China010821BJIBM IBM FOLLOWS CHINA HEADQUARTER HOLDING PL RESPONSIBILITY AND CUSTOMERORIENTATION PRACTICE Source: Interview, Virtual Team practice by facilitates/coordination ??? Key takeaways ? IBM China headquarter holds the PL responsibility of all the business groups. The only exception is China Research center that reports directly to RD global center ? IBM embodies customerorientation in