For most of Corporate America, there is only one way to deal with the global slowdown: cut costs.
However, for IBM (NYSE: IBM) there's a very different strategy. Basically, the company wants to capitalize on the hard times. Gutsy, huh?
And, for the long haul, there's a good chance it will make IBM even stronger. This is the message from the company's CEO Sam Palmisano, whose shareholder letter was published yesterday.
Essentially, he thinks that the current downturn is not a typical recession. Instead, it's a critical shift in the world economy. As a result, companies need to radically rethink their businesses. If not, they may not survive for long.
And IBM has a plethora of offerings that can help companies with the "new normal." For example, Palmisano provides a litany of innovations from IBM, such as smart grids, intelligent auto traffic systems, sophisticated food supply systems (using RFID) and so on. What's more, with the Obama stimulus plan -- as well as initiatives from other countries -- there is likely to be a nice boost in demand for such infrastructure investments.
More importantly, IBM has the heft and credibility to be a prime beneficiary. The company has extensive dealings with many major governments. Plus, IBM continues to generate significant free cash flows ($14.3 billion last year).
So, according to Palmisano, IBM "will take the long-term view, and go on offense. Throughout our history, during periods of disruption and global change, this is what IBM has done."
Yes, it's a great message for shareholders and employees to hear -- especially in the grim economic environment.
And IBM has a plethora of offerings that can help companies with the "new normal." For example, Palmisano provides a litany of innovations from IBM, such as smart grids, intelligent auto traffic systems, sophisticated food supply systems (using RFID) and so on. What's more, with the Obama stimulus plan -- as well as initiatives from other countries -- there is likely to be a nice boost in demand for such infrastructure investments.
More importantly, IBM has the heft and credibility to be a prime beneficiary. The company has extensive dealings with many major governments. Plus, IBM continues to generate significant free cash flows ($14.3 billion last year).
So, according to Palmisano, IBM "will take the long-term view, and go on offense. Throughout our history, during periods of disruption and global change, this is what IBM has done."
Yes, it's a great message for shareholders and employees to hear -- especially in the grim economic environment.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
4-17-2009 @ 12:21AM
suzzane said...
I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone.
Suzzane Waltz
Miami real estate