In a Presentation to the Investment Community, Sam Palmisano, CEO

Essay

In a presentation to the investment community, Sam Palmisano, CEO of IBM Corporation, stated: "We intend to continue to take share, as we have in the past two or three years, in our core businesses."
Palmisano contended that the category of business-process transformation services, such as customer support, human resources, and other administrative overhead, represents an untapped market of $500 billion dollars if businesses outsourced these functions to companies like IBM. IBM's expressed goal is to capture 10% of this new market. Palmisano also cited new business opportunities in information technology. The company's new chief financial officer, John Loughridge, stated that IBM's goal was to achieve high-single digit annual percentage gains in sales and greater than 10% yearly increases in earnings per share. (Source: Barron's: May 24, 2004)
Required:
(a) Does the strategy described by IBM's management fall into the build, hold, harvest or divest category of strategic missions? Explain your answer with specific examples related to the general characteristics of that category of strategic mission.
(b) Identify the types of risks and rewards normally encountered by a company with the strategic mission described by IBM's management.