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erings ? Key customers ? Pricing 1. Background information ? Location ? Management team ? Starting year ? Number of employees ? Era analysis 11 SEC China010821BJIBM IBM HAS SET CHINA AS ONE OF KEY BASES IN ITS GLOBAL RD Global research bases ? 8 global research bases ? Total staff around 4,000 * Under construction Source: Literature research, interview China RD base ? Established in 1995 (IBM is one of the first MNCs that set up RD center in China) ? Staffed over 100 people to research center and over 200 people to development center ? Research focuses are China specific technology such as language recognition, handwriting input and puterized translation technology application in Chinaspecific environment and industry solution。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 13 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 14 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 15 SEC China010821BJIBM ORGANIZATION AND OWNERSHIP 4. Value chain strategy 5. Organization and ownership 6. Financial performance ? Focus on –