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oduct /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 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 anization structure. The . and tele are to provide total solution to target customers ? “Virtual team” practice facilitates coordination among different business groups serving same customers Organization IBM China Co., ltd SMB . Tele IGS Software group PC Technology group Server Research center Source: literature research, interview Desktop PC Notebook SEC China010821BJIBM 18 IBM HOLDS THE MAJORITY OF ITS PC MANUFACTURING JV IN CHINA Ownership structure Great Wall Computer Group IBM Great Wall IT Products Shenzhen Co., Ltd. 30% 70% Source: Literature research Source: literature research, interview SEC China010821BJIBM 19 FINANCIAL PERFORMANCE 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 1. Background information ? Location ? Management team ? Starting year ? Number of employees ? Era analysis SEC China010821BJIBM 20 IBM’S NOTEBOOK BUSINESS HAS BEEN GROWING VERY FAST, BUT DESKTOP PC HAS BEEN VERY STAGNANT FOR THE PAST THREE YEARS Sales (RMB billions) Notebook Revenue 1999 2023 1998 9800 CAGR Percent Source: IDC Desktop PC Revenue 1999 2023 1998 9800 CAGR Percent SEC China010821BJIBM 21 IBM HAS BEEN GROWING IN REVENUE AND IMPROVING IN NET MARGIN Source: Analyst report Profitability Percent Net margin Growth rate Percent Gross margin 1999 2023 1999 2023 Financial performance Revenue USD billions 8 9 37 36 Growth rate Percent 1999 2023 Source: annual report 靜夜四無鄰,荒居舊業(yè)貧。s ponents in return 2023 target ? Increase revenue by 20% * IBM’s PC business showed surprising strength in revenue growth and profitability in the September quarter last year, which would lessen the urgency to exit is business in the near term ite re rch SEC China010821BJIBM 6 Source: IDC Desktop PC market share Percent of units shipment (m) 2 2 . 12 9 . 86 2 . 95 1 . 69 . 66 . 13 . 85 . 05 . 14 . 0Others IBM Great Wall Founder Legend 100%= 2 1 . 51 5 . 22 8 . 92 1 . 81 7 . 11 7 . 51 7 . 12 3 . 26 . 78 . 87 . 54 . 36 . 44 . 0Growth rate