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Exchange rate movement

Economies of scale for the information technology industry are high

• Social

Lifestyle changes

Concerns about ‘disposal society’

IT user population are becoming ever more sophisticated and demanding in their use of IT technology

Availability and quality of IT talent

• Technological

Change in hardware

Server virtualization

Innovation

Broadband networks are becoming increasingly essential

Competitive advantage of Computacenter

When a firm sustains profits that exceed the average for its industry, the firm is said to possess a competitive advantage over its rivals. The goal of much of business strategy is to achieve a sustainable competitive advantage. According to the Competitive Advantage model of Michael Porter, a competitive strategy takes offensive position in an industry, in order to cope successfully with competitive forces and generate a superior Return on Investment.

In keeping with M. Porter, the basic of above-average performance within an industry is sustainable competitive advantage. There are two basic types of competitive advantage: cost advantage and differentiation advantage. Cost advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost. And this is also one of most important competitive advantages for Computacenter.

Cost leadership is perhaps the clearest of the generic strategies. The sources of cost advantage are varied and depend on the structure of the industry. Computacenter drives down cost as low as possible to ensure that price are the most attractive to their customers. And in order to achieve this advantage, the company combines services and solutions to best practice processes. In the other words, Computacenter helps their clients make business sharper by removing cost, complexity and barriers, using over 25 years’ of practical IT ‘know how’. The company is an above-average performer in its industry, at equivalent or lower prices than its rivals.

Appendix 3 illustrates how the company positioning themselves.

Competitive advantage of Computacenter:

• Delivers the right solution for consolidation. has considerable track in delivering consolidation projects.

• Can implement migration projects at lower cost, with less risk and more quickly than competitors

• Has consultants accredited to the highest level with all major datacentre vendors such as IBM, SUN, Oracle, HP, Redhat, SuSE, Veritas, VMware, EMC, NetApp and HDS¹².

• Knowledge, experience of deploying infrastructure management, skills and flexible methodology

• Vendor-independent organisation

• Consultancy capabilities cover all leading software and infrastructure vendors in the field of data

• Direct relationships with over 1,100 software vendors

• Hold more than 200 accreditations.

For several years the Group’s strategy remains unchanged. The group’s success is the direct result of a strategy founded of high investment in the development of the services capability over a number of years. Ongoing investment in staff reflects commitment to their goal – maintaining the position of market leader.

Computacenter sticks strategy that is stable and flexible, and can respond to the changing needs of the market. The company is continuing to pursue a strategy of growth in their activities to achieve economies of scale.

A leading presence in each of the major European markets for IT products and services, Extending presence in markets that offer greatest growth opportunity remains a core priority of Computacenter’s strategy.

1. Strategic direction for the future

In a world where IT is increasingly important to business success, today’s organizations look for a trusted partner to help them realize competitive advantage from technology. It is fact that there needs to be a good quality product to successfully growth any product. Quality control and customer service are important to increase sales volume to grow a company.

Based on the research and analysis in the previous chapters, I’ll try to explore a limited range of choices available to the company for the future. Firstly I want to consider the opportunities and threats for Computacenter.

Opportunities

• Constantly growing demand for a IT service and occurrence of new clients

• Development of new products and introduction of new types of service both for constant clients, and in order to attract of the new clients

• High ability of the employees to improvement of professional skills that allows to introduce quickly new technological decisions in a production cycle.

• To investment in a programme to expand current facilities

• Extending presence in those markets that have the greatest growth

• Potential for disruptive innovation

Threats

• An inability to adapt service offerings to customers that may lead a failure to compete

• Wrong definition of customers needs

• Compete successfully with the current off-shoring trend

• Threat of slowdown in demand from corporate customers

• Growth impairment of the market

• Occurrence in the IT market of new competitors with more favorable conditions of service

• Falling of demand for separate types of service

Information technology industry represents both a threat and opportunities. Take into account history development of the company and current strategic situation we can conclude that all strategy that the company follows is build on organization’s own capabilities. Organic development was the primary method of strategy development.

Computacenter should continue to follow the same method of development, because there are a lot of supporting evidence. Firstly, highly technical products and services available for themselves. May be some acquisitions are necessary in order to create new market opportunities. Secondly, knowledge and capability development. And lastly, the company invests over time, reinvesting profit into business, thereby avoiding the need for outside investments.

Recommendations for the future strategic direction:

• Expanding business and increasing turnover by carrying on doing what you are doing.

Computacenter may move to new different regions but still using original business model. In this way growth rate is natural.

• Computacenter should selling products in new geographic areas, or using new sales channels.

• Continue to Improve customer service

• Defending the relationships with existing customers

• Expanding the range of product offerings

• Investing in technology to assist with growth

• Expanding and optimizing the distribution network

• Improving overall efficiency

Conclusion

The goal of the assignment was to explore strategy of the Computacenter.

By considering corporate development history and current situation strategy, it became possible to identify direction for the future. Opportunities and threats for Computacenter have been estimated, basing on the analysis of IT-industry (using Porter’s Five Forces) and macro-environmental analysis (using PEST framework). According to the results of researches were given recommendations for the future strategic direction.

analysis strategic computacenter threat

Bibliography

1. http://en.wikipedia.org/wiki/Computacenter

2. http://www.computacenter.com/who_we_are/

3. JOHNSON G., SCHOLES K., WHITTINGTON R. 2010. Exploring Corporate Strategy. 8^th edn. Pearson Education Limited

4. IT Industry, Information Technology Industry. http://www.economywatch.com/business-and-economy/information-technology-industry.html

5. THE ECONOMIST INTELLIGANCE UNIT LIMITED.2009. Resilience amid turmoil. Benchmarking IT industry competitiveness 2009. [WWW]. http://www.eiu.com/PublicDefault.aspx.

6. GRAHAM, T. 2007. Cima Exam Practice Kit Management Accounting Business Strategy. Burlington: Elsevier.

7. Annual Report Computacenter.2009.

8. PORTER, M. 2008. On competition. Updated and expanded edition. Printed in the United States of America: A Harvard Business School Publishing Corporation.

9. COMPUTACENTER APPLICANTS’GUIDE

10. http://www.computacenter.com/services/transform/datacentre_technology_optimisation/datacentre_current_state_assessment.asp

11. HYDER, A.S. ABRAHA, D. 2003. Strategic alliances in Eastern and Central Europe. Oxford: Elsevier Science Ltd

12. http://en.wikipedia.org/wiki/M % 26A

13. KHANNA, T. GULATI, R. NOHRA, N. The dynamic of Learning Alliance: Competition, Cooperation, and Relative Scope. Strategic Management Journal. 19. 1998. P. 193–210

14. BETZ, F. 2001. Executive Strategy: Strategic Management and Information Technology. New York: John Wiley & Sons, Inc.

15. http://www.computacenter.com/who_we_are/quality/

16. http://www.computacenter.com/services/transform/datacentre_technology_optimisation/datacentre_current_state_assessment.asp

17. Harvard Business School Press. 2006. Essentials of strategy. Printed in the United States of America

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1 BETZ, F. 2001. Executive Strategy: Strategic Management and Information Technology. New York: John Wiley & Sons, Inc.

2 http://en.wikipedia.org/wiki/Computacenter

3 http://www.computacenter.com/who_we_are/

4 Annual Report Computacenter.2009. p. 2

5 Annual Report Computacenter.2009. p. 2

6 http://www.computacenter.com/who_we_are/quality/

7 IT Industry, Information Technology Industry. http://www.economywatch.com/business-and-economy/information-technology-industry.html

8 Annual Report Computacenter.2009. p. 17

9 THE ECONOMIST INTELLIGANCE UNIT LIMITED.2009. Resilience amid turmoil. Benchmarking IT industry competitiveness 2009.[WWW]. http://www.eiu.com/PublicDefault.aspx.

10 GRAHAM, T. 2007. Cima Exam Practice Kit Management Accounting Business Strategy. Burlington: Elsevier.

11 Harvard Business School Press. 2006. Essentials of strategy. Printed in the United States of America

12 http://www.computacenter.com/services/transform/datacentre_technology_optimisation/datacentre_current_state_assessment.asp

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