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IBM's Strategic Choices in China: Compete and Cooperate?

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IBM's strategy in China was to go it alone. The company researched, produced, and distributed its own products. The Chinese government, however, viewed technology as a key factor for economic growth and national competitiveness: it wanted to promote technology transfer between foreign technology firms and domestic firms. As IBM's business and ambitions in China grew, it would have to make a decision: would it compete and cooperate with local firms?

Learning Objective:

1) To understand the strategic reasoning of the Chinese government in promoting technology transfer, and how this rationale and government policies change over time;
2) To assess the advantages and disadvantages of IBM’s strategy of integrating Chinese operations globally under a “one strategy” umbrella;
3) To use game theory to understand the potential payoffs, losses, and trade-offs for IBM in sharing core technology with Chinese firms.

Year of Publication: 2017
Ref. No.: 16/584C
Discipline: Economics & Business Policy, Strategy & General Management
Industry: Computer Hardware
Country: China (People's Rep. of)
Company: IBM
Languages: English
Pages of Text: 16