The Evolving Strategy of IBM, textbook pages 476
Executive Summary:
This
is an individual assignment in which I need to make a word report based on a
case study which is selected from Hill, CWL 2015, and International business:
competing in the global marketplace. I have choose IBM Corporation for analysis
if the case as topic of “The Evolving Strategy of IBM, textbook pages 476” .The detailed report will discussed
the core problems identified in recent global business environment and how it
affected to the business strategy of the company, with that a theoretical
implications of the business strategy also being discussed which the company
have used and based on such analysis recommendations suggested for the future
strategy of the company. IBM Company is
a global company that seeks to solve the limitations of humans through the
development of both home-made and business computers. It has been achieved by
intensive research, innovation, and invention. The company has garnered
comparative and competitive edge by employing very competitive workforce,
employing the strategy of expanding their products to reach the global market.
Through differentiation of the products to serve the low, middle and
high-income earner, IBM has managed to increase their sales and emerge one of
the most profitable organizations across the globe. In addition, the company
have become useful for both the managers and other senior employees since they
can use the IBM products like computers to analyze large set of data, analyze
them and eventually evaluate them to make focus on the future economic
conditions. The company has also -developed strategies that they are using to
explore new markets and serve various customers who come from different parts
of the world. Amidst the challenges faced by the company, the senior personnel
is always striving to change them into various opportunities to counter the
global competition posit by other competing firms. It, therefore, enables them
to become 4th in branding globally.
Table of Contents
Introduction of the company:
Being
the World’s Largest Computer Corporation, IBM Corporation (IBM) is an United
States Multinational Consulting and technology corporation, that has its
headquarters in Armonk area of New York city (Chen, & Wang, 2012). IBM
manufactures the products related to computers, its hardware, software and
other necessary products of it. Also sells the same products which are
manufactured by IBM in their own house. Moreover, IBM also offers various
services to the Microframe computers include infrastructure services,
consulting and hosting services and Nanotechnology services. The genesis of IBM
dates back in 1911 when it began as a cloud Tabulating, recording and analyzing
by a merger of 3 companies namely computing scale corporation , International
time recording company and the tabulating machine company.
According
to historical records, IBM produced its first computer in 1953, and it was
named it 701. In the decade of 1960s and 1970s, IBM initiates to develop the
new field in computer worlds by development of mainframe and minicomputers. In
year 1981, IBM promote its first personal computer with the name of IBM PC which upon its introduction into the
market, it became the default reference standard for PCs (Yoon, 2005). IBM not
able to estimate the market requirement of PCs and they lost their market share
to sellers of PC manufactured corporation such as Compaq.
IBM
has a team of scientists, consultants, engineers, sales professionals over 200
countries of the world. With the passage of time IBM has awarded for Nobel
Prize for 5 times with that IBM also received
National medals from nine countries for technology, National medals from
5 countries for science and Turing awards for four times. The way in which IBM
acquires its staff is through handpicking professionals, IBM trains them to
specialize in assessing needs of training, administering, designing,
delivering, developing and evaluating solutions for training. Nevertheless, it
blends technology with various traditional methods. These customized training
for IT solutions will increase the knowledgeable employee in IBM organization. While
recruiting, IBM institutes taking four processes that include: written test,
group discussion, technical interview, HR interview.
Analysis of the IBM
Evolving Strategy: IBM is one of the biggest brands over
the world. In this case we are going to analyze the IBM strategy to become
global brand and won the trust of people. If we analyzed the case we find that
global market of IBM is due to continuous innovation as first innovation of the
company are forty year ago but after that company innovate some new system in
the field of information technology. IBM
invented SQL over 40 years ago. SQL is still in use today as a lingua franca of
data querying for its simplistic syntax and ubiquity across an organization.IBM
is also an early contributor to Hadoop. Being a top innovator, IBM is still
inventing new machinery and new technologies in the market. It has $24 billion
investment in the platform. It has indeed offered distribution based on the
most current open source technologist and provides a platform for best-in-class
analytics (Earning Company, 2001). IBM provides infrastructure technologies
with various segment of company. Whereas STG meets the technology needs of IBM
by providing packing solutions, products and Semiconductor technology. For attract customer by introducing new
scheme name as global financing in which IBM Financing
segment of company provides solution of financing for services and products
which is critical for business operations.(Chen, & Wang, 2012). IBM entered
into financing contracts after analysis of credit status and security of
contract by legal manner. Global
financing includes financing to the end user by providing lease and loan
financing for 7 years. Also for the dealer of IBM, they launch commercial
financing where is financing to the account receivable and inventory for short
term basis to the dealer of IBM and OEM products are financed by the IBM. Continuous innovation of the IBM make them
IBM’s brand occupies the fifth position in the Forbes and earns recognition as
being among the world’s most favorable brand courtesy of the broad patent
portfolio. In 2012, Fortune ranked IBM as being the second largest U.S. Firm by
the number of staffs (433,362) and the 4th largest firm in the world
in terms of market capitalization. Nevertheless, IBM was declared the 9th
most profitable firm and the placed 19th rank in terms of revenue.
From
a global view, in the list of Forbes 2011 the company has been secured the 31st
rank in the world in terms of revenue. Other rankings include 2011/2012 as the
being the number one company for leaders, 1st rank in green company
over global, 2nd best brand over world and the 18th rank
in most innovative company in the world (Yoon, 2005). IBM also innovate the big
data technology which is used by the organization according to organizations
requirement. As per the requirements of
this company smart innovation, the big data system can act as wonder in dealing
with the huge data to process and store the data in a structured way. It also
deals in recording, monitoring and measuring all types of data being generated.
The system is also capable of providing the analysis, tracking, sharing,
auditing, and managing the data. The biggest aspect of big data system is that
to provide company in processing high variety, high volume, and high velocity
to extract data to ensure high conformity of original data. Big data system
innovated by the IBM works on Big data to make the data analysis fast and
affordable. (Warden, 2011).
Statistically
Information revels that IBM have 9 laboratories over the world and IBM holds
highest number of patents in the US technologies company. The invention of IBM includes the ATM, the
airline reservation system, the magnetic stripe card, the hard drive disk, the
floppy disk, DRAM and Watson artificial intelligence.
Since
the company was incorporated, it has undergone for various changes in the
organizations such as spinning off companies like Lexmark (1991), PwC
Consulting (2002), ThinkPad to Lenovo (2005) and acquiring companies like (SPSS 2009). The company has efficient expert technical
managers who are committed to work and offer excellent support. This has been a
secret tool in which IBM has been using to bring a customer back to their
premise. Quality work is their motto.
By
the end of 2011, IBM company had generated revenue of Revenue: $106.9
billion from continuing worldwide operations and Net income: $15.9
billion. Its total assets base was $116.4 billion. Statistically, IBM is among
the highest worldwide company with the highest number of employees of about
433,362. Being listed on the New York Stock Exchange (NYSE: IBM), the company
is the world leading corporation in a provision of industry Computer
software, Computer hardware, IT
consulting and IT services.
Benefits from the invention of IBM Company
- Processes unstructured data
Through the
development of different computers which can be able to organize, coordinate,
evaluate and synchronize data, unorganized or unstructured data can structure
to give a useful meaning. The products of IBM has been used by many companies
to help them analyze data for various economic analysis and decisions
·
Aid in solving human decisions
Products made by the
IBM company, such as computers aid in solving the human limitations which
arises in their daily lives. Through the use of computer software, different
companies and organizations can be able to make various managerial decisions
that aid even in the future planning and operations.
- Acts as a decision support system don't replace human
The services provided by the company helps to increase both
labor and capital productivity of various governmental and nongovernmental
organizations (Thompson,
2000). The
incorporation of various innovation and invention in the marketplace has led to
the increment in the level of total productivity of various companies around
the globe
- Improve and transform customer service
The use of IBM product has made the world become a global
village. Customers can be able to trade for the use of the internet, various
transactions can be carried out via the internet, and even the general trading
system can be done online (Hawking
& Sellitto, 2015). The innovations have increased the
customer service in both IBM and other companies around the globe. Also, the
companies and organizations can also improve the delivery of goods to the
customer and make them aware of their products through different advertisements
Purpose of IBM Company
·
The main purpose of this company is to
explore the existing global opportunities and balance the fluctuations in
different companies.
·
To come up with very big brand image
and create new products which appeals to the younger generations to come.
·
To acquire a competitive edge in both
local and global markets.
·
To promote the innovation and
inventions through research investments in information technology.it therefore,
increases both labor and capital productivity.
·
To enhance the use of an open operating
system, e.g., lines.it will enhance the
operation and activities of the company both in the short run and in the long
run.
·
To improve the small
medium business over there years and great desire to increase the market share
Strengths
·
IBM company have been holding t
technological patent for the next 17 years. It has made
·
It emerge the best in the whole world
and beat its competitor. By 2008 IBM managed to get 4186 patents and this
number increased to 4914 by 2009.in the same year, the company published 4000
innovation publications and other products without patents
·
IBM Company is known to be handling
about 95% of the activities of the leading businesses and companies in the USA
·
The company has won different awards in
the business and by 2009 they were recognized as the 4th company
leading in branding in the whole world (Thompson, 2000). They have also
remained at the top for more than 20 years consistently.
·
Given that it is an old company, IBM
has developed a good rapport with its clients, customers, and suppliers. It,
therefore, makes it one of the largest and most profitable companies around the
world with a profit of 66 billion
·
IBM is a global company that has
managed to employ more than 400000 employees all over the world. By this, it
has gained greater competitive advantage and comparative edge
·
By the creation of dedicated research
labs mainly for the creation of innovations and inventions, IBM has managed to
emerge the top among its competitors.
Weaknesses of IBM Company
·
Due to the size of the IBM Company
makes it suffer the diseconomies of scales. The response to the clients by the
company officials or employees is very slow which cannot match the demand of
millions of customers (Chen, & Wang, 2012).The slow response is not due to
in competencies of customers but because 400000 employees cannot provide
efficient customer support to the customers.
·
There is a great increase in the
operating cost and other costs arising from the competitors that eat into their
market share. It is evident that by 2010, IBM was forced to buy back $8 billion
in stock
·
Going Global has made the company to
other nations have made the number of employees to increase immensely. It,
therefore, forces them to retrench other employees. For instance, by 2009, USA
was forced to retrench 30 000employees from the workforce (Thompson, H. (2000).
Essentially, this makes the individuals unemployed hence lowering their general
living standards.
·
IBM Company has been undergoing a
series of problems in communication and networking of activities in different
nations. It mainly arises due to language barrier experienced by the employees
and the customers in different parts of the world were IBM company operates
·
Due to global recessions experienced
globally, the operations and activities of IBM interfere with. The financial
activity which contributes 30% of the IBM Company's revenue is forced to
decline. The recession also does affect the operations of the equity banks and
their ability to lend to the general public.
·
There is a decline in the storage and
server and storage accounts which mainly accounts for more than 20% of the
company's revenue.
Some
of the largest competitors of IBM include Accenture, Amazon.com Inc., Computer
Science Corporation, Fujitsu, and Google. Inc., Microsoft Corporation ,
Hewlett-Packard Program, CA, Inc.,
Oracle Corporation, Salesforce.com, SAP, Cisco, Dell, Inc. etcetera. Even
though the good number of strength of the competitor in term of revenue, capital
and presence in the market but IBM also captured high amount of market due to
their continuous innovation in the technology, as it is known that IBM is one
of the leading manufacturers in the fields of information technology.
One
more strategy of the company to expand
their word wide presence by way of social media as company active on the social
media in active manner as if we look at the social media presence of the
company that most of the employee of company are on the professional network of
social media name as LinkedIn. IBM has higher number of followers on professional
social media network LinkedIn. Maximum followers of IBM are from LinkedIn. IBM
followers on LinkedIn are 560000 from which 280000 are employee of IBM. And IBM placed on number one in US by way
number of followers by LinkedIn users.
Recommendations:
Being
an international company with international presence, IBM should seek to ensure
efficiency in all its activities right from the manufacturing process to the
service delivery. Though there has been a concern that its share price
frequently fluctuates making some of the investors shift their funds from the
organization, IBM should strive to ensure that establishes a reliable market
share as well as monitor the activities of its strong competitors in order to
ensure that it is always ahead of them (Chen, & Wang, 2012). As a matter of
fact, it should strive to manage sophisticated recommendations to align its
incomes towards the achievement of higher goals. Another recommendation would
be to provide smarter content recommendations through algorithms and
personalization components. It should also work towards delivering content to
multiple channels and improve business insights to increase performance and in
the overall achieve merchandising and marketing objectives. Even the company
has good strategy for evolving market of the world but though company should
have also need to introduce some new technology in the fields of new era of
technology. Now a day number of user of
smart phone are increased rapidly and maximum people are using smart phone for
the purpose of work as well hence IBM need to interfered in the field of mobile
which also help to increase their revenue. One more suggestion for IBM is to
launch the smart phone tools with other technology related to smart phone as
maximum competitor of IBM also diverted their business in the field of smart
phone. Maximum producer of computer are producing smart phone by looking to the
higher number of user using smart phone for the purpose of work. Now if we look
than Intex, Microsoft, Dell and other competitor of IBM also producing smart
phone as well which help them to recover the reduction of revenue by selling of
this tools. Also IBM can innovate something new in the field of smart phone.
Conclusion:
From the whole analysis about the evolving strategy of the IBM we
concluded that from the continuous improvement of the IBM they placed number of
rank in the field of technology. Strategy for capture market and to provide
service to the customer IBM tried a lot. But now IBM need to divert some of the
business in the field of smart phone by using diversion strategy which helps to
IBM to make presence in the market in the new filed also help to cover the
revenue loss. Social presence of IBM also helps them to gain advantage in the
competitive market of technology.
References:
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Chen, T., & Wang, Y.-C. (2012).
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Cohen, D., & Prusak, L. (2001). In
good company: How social capital makes organizations work. Boston: Harvard
Business School Press.
3.
Earning Company. (2001). Zoombinis
Logical Journey: [an epic adventure of Math and logic]. Novato, CA:
Learning Co.
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Hawking, P., & Sellitto, C. (2015).
Intelligence business Strategy: A Utilities Company Case Study. International
Journal of Enterprise Information Systems, 11(1), 1-12.
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Thompson, H. (2000). The
customer-centered Enterprise: IBM and other world-class companies. New
York: McGraw-Hill.
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Yoon, V., Broome, B., & Guimaraes,
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Warden, P. (2011). Big Data
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