Introduction (Graphics Not Available)The world has become increasingly complex, due to the greater interdependence between the world's economies (Thompson, 2002). The success of an organization is largely determined by how well the organization adapts all its tangible and intangible properties to keep in line with its surrounding environment (Armenakes & Bedeian, 1999). The strategy was about managing the company's activities and resources in relation to the environment in which it operates. This essay will analyze the micro and macro external environment in part five years (2000 to 2006) of IBM company using PESTEL and five forces model to be analyzed in the first part. The second part will discuss the advantages and disadvantages of the two possible alternative strategies for IBM.Part 1: Micro and macro external environment analysis1.1 Analysis PESTELS external factors can be divided into six general categories which are political, environmental, social, technology , environment and law (Johnson, 2005). Such external factors are usually beyond the company's control and sometimes present themselves as threats. In this case, political factor, environmental factor and technological factor will be used to analyze the information technology industry. Political Factor The Iraq War is an ongoing war that began with the US-led invasion of Iraq in 2003. This war has affected the world economy, in particular, the United States directly waging war on Iraq. Fear of a possible US-led war against Iraq has soured investor sentiment in the US stock market. Furthermore, technology stocks in the European market collapsed following the negative results of the industry giants, Microsoft and IBM stocks plummeted (CNN.com). This is because everyone is negative about Iraq, and in combination, ... half of the paper ......ion.cnn.com/2003/BUSINESS/01/17/markets.europe/index.html . Accessed 5/31/2007• My solution info.com IBM market sharehttp://www.mysolutioninfo.com/news-display.aspx?Code=960&t=IBM%20Number%20One%20in%20Worldwide%20Application%20Development% 20Software %20Market%20Sharing. Accessed on 6/1/2007• Network world US militaryhttp://www.networkworld.com/news/2006/101206-us-military-to-test-ibms.html?page=1 Accessed on 29/5/ 2007• New.com IBM employee layoffshttp://news.com.com/IBM+to+cut+almost+1%2C600+more+jobs/2100-7252_3-6187552.html?tag=topicIndex Accessed 2/6 /2007• IBM Companywww.IBM.com Accessed 28/5/2007• IBM moves major buyer to China PC business sold to Lenovohttp://news.bbc.co.uk/2/hi/business/6045482. stm Accessed 30/5/2007• SARS BBC Newshttp://www.bbc.co.uk/health/conditions/sars1.shtml#what_is_it? Logged in on 1/6/2007