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Strategic Leadership: Formulating Strategy Across Levels

This activity focuses on IBM and how it uses corporate strategy, business strategy, and functional strategy to build competitive advantage. This activity is important because it illustrates how such strategies are created through the strategy process. The goal of this activity is important because it illustrates how such strategies are created through the strategy process. the goal of this activity is to recognize at which levels of strategy key members of IBM act on behalf of the firm, and what questions they must ask to build competitive advantage.

Read the short case below and then complete the questions that follow.

Minicase

The current Chief Executive Officer at IBM is Virginia Rometty who rose to the post in late 2012. Before her tenure, the office was held by Sam Palmisano. The example below comes from actual strategic decisions made at the firm. As the Chief Executive Officer, Mr. Palmisano decided to invest in an Emerging Business Organization (EBO). This was established to help select what new industries IBM should be entering. This group was formed specifically to expand quickly and successfully into new markets for IBM. Bruce Harreld, a senior vice president, was tapped to lead this new business for IBM. One of his main roles was to assess the possible approaches for achieving the desired superior performance levels for the EBO. Mr. Harreld needed to approach business with a variety of points of view to navigate a successful pathway both commercially and internally for IBM. Inside the EBO business unit, Carol Kovac, a life science director, was tapped to build a business in the life sciences area for IBM. She had to address concerns about developing the customer base and implementing successful products and services for particular customers. Over a six-year period, Ms. Kovac built an organization from no revenues and one direct report into an organization with more than $5 billion in revenues and hundreds of PhDs and other support personnel.

This example is drawn from OReilly, C. A., B. Harreld, and M. Tushman (2009), Organizational ambidexterity: IBM and emerging business opportunities, California Management Review 51: 7599

According to the text, superior performance within the strategic business unit (SBU)is sought by asking which major question?

A) Who are the competitors?

B) How to compete?

C) Where to compete?

D) When to compete?

E) Why to compete?

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