IBM

AnalyzeIBM strategies,

to remix their businesses in order to move to the emerging higher-value spaces,

in Macro and Micro environment level

IBM strategy

PESTEL analysis in Macro level

Five forces analysis in Micro level

Recommendation

Conclusion

SOWT analysis

Complexity analysis

• IBM understood Value was shifting in the IT industry, driven by the rising tide of global integration, a new computing paradigm and new client needs.IBM understood Value was shifting in the IT industry, driven by the rising tide of global integration, a new computing paradigm and new client needs.

• Economies of developing nations were growing rapidly, driven by historic investments in fundamental business infrastructure. Enterprises were looking to tap Economies of developing nations were growing rapidly, driven by historic investments in fundamental business infrastructure. Enterprises were looking to tap skills and expertise available all over the world and to integrate their operations globally.skills and expertise available all over the world and to integrate their operations globally.

• Change in computing architecture was rippling across the data center and the network, along with a proliferation of technology infused into all aspects of work Change in computing architecture was rippling across the data center and the network, along with a proliferation of technology infused into all aspects of work and life. Companies were seeking to integrate advanced technology with their business processes and operations, not only to reduce costs, but to enable and life. Companies were seeking to integrate advanced technology with their business processes and operations, not only to reduce costs, but to enable innovation and growth.innovation and growth.

•IBM remixed their businesses in order to move to the emerging higher- value spaces by focusing on software and IT industry.IBM remixed their businesses in order to move to the emerging higher- value spaces by focusing on software and IT industry.

IBM Strategies

IBM Strategies

HardwareAnd ServicesHardware

And Services SoftwareSoftwareIBM sold the personal computing department To Lenovo

SocialPolitical

Technological

Environmental

Economic

Legislative

PESTEL Analysis for Macro environment factors

Iraq War in 2003, affected world economy, and IBM stock fell down.

Technology affects directly to computer technology industry because computer technology can be used as a tool to invent many technological products

An illness like bird flue, in 2004 effect to all businesses that operate especially in China. IBM has many suppliers in china and Asia countries.

Technological

Political

Environmental

PESTEL Analysis

Oil price, increase the price of energy and reduce the worth of Dollar.

IBM has a good reputation as big and innovativeInformation technology company in the world.

U.S. Government, sanction against Iran and North Korea.

PESTEL Analysis

Social

Economic

Legislative

PESTEL Analysis

• IBM and U.S. military deployed IBM’s speech to speech translation software to help U.S. serving in Iraq for better communication with local security forces and Iraqi citizens.

• On the other hand IBM focused more on outside U.S. market to reduce the impact of U.S. economies problems. IBM Company revenue more than 50% is from outside U.S.

• IBM collaborated with Scripps research institute to make software framework to allow world health organizations to more easily share and analyze electronic health information, such as the outbreak of disease.

•IBM stopped to work with Iran and North Korea, therefore they lost these markets as well.

Intensity of Rivalry

Bargaining Power of Suppliers

Bargaining Power of

Buyers

Threat of Substitutes

Five Forces Analysis for Micro environment factors

Five Forces

LOW

The high capital investment, high budget for research and development, and high technology of production can be seen as factors that prevent new competitors to enter into computer technology industry.

High

There are many computer software manufactures in today global market. Each manufacture tries to differentiate its product by creating new programmes that make a computer more powerful.

IBM’s business employs a wide variety of components, supplies, services and raw material from a substantial number of suppliers around the world.

The Threat of Entry

The Threat of Entry





LOW

Five Forces

LOW

Software is the main component of the computer which used to enable a computer to perform specific tasks. Nowadays, there is no product to replace or substitute computer software.

High

As IBM operates business in B2B market, most organizations always buy in large amount per one time. Therefore, customers have power to negotiate with the company.

Bargaining Power of Buyers

Bargaining Power of Buyers



Strengths Weaknesses

•Leading provider of IT services•Strong research and development•capabilities•Strong profitability

•Weak enterprise mobility product portfolio

Opportunities Threats

•Expansion in emerging markets•Growing information on demand tools•market•Strategic acquisitions

•Intense competition•Economic Slowdown in US and Europe

SWOT Analysis

is to focus on the high-growth, High-value segments of IT industryis to focus on the high-growth, High-value segments of IT industry

.. IBM decided to become a

globally integrated enterprise in order to participate in the

world’s growth markets and improve IBM’s productivity..

. . to support two principal goals: helping clients succeed

in delivering business value by becoming more innovative,

efficient and competitive through the use of business insight and information technology (IT) solutions; and, providing long-term value to shareholders.

SystemSystem: The relationship between things which : The relationship between things which

interact. interact.

Complexity theory: Complexity theory:

NonlinearNonlinear: When noise is added to the graph : When noise is added to the graph

result the result are no longer a result the result are no longer a

straight line, and are not straight line, and are not

predictable. predictable.

Complexity theory

Simple System in IBM is focused on software more than hardware and Simple System in IBM is focused on software more than hardware and services.services.

Noise happen by internal and external factors on organization and Noise happen by internal and external factors on organization and market.market.

Competitors Competitors . Oracle . Oracle . Microsoft, . Microsoft,

External FactorsExternal Factors . Political. Political . Technological. Technological . Environmental. Environmental . Economic. Economic . Social. Social . Legislative. Legislative

Weaknesses (spun off)Weaknesses (spun off) . . Printer division . Storage division . PC division

Internet's revolution

Product Product complexity, complexity, high costhigh cost

• This is because IBM is a complex nonlinear system, like most system found in This is because IBM is a complex nonlinear system, like most system found in nature.nature.

• The more the model must look like the actual system to predict system result, The more the model must look like the actual system to predict system result,

the more complex the system is considered to be.the more complex the system is considered to be.

Complexity Analysis in Macro and Micro level

. The general rule for complex systems is that one cannot create a model that will accurately predict . The general rule for complex systems is that one cannot create a model that will accurately predict outcomes but one can create models that simulate the processes that the system will go through to create outcomes but one can create models that simulate the processes that the system will go through to create the models. the models.

. Innovation company. Innovation company

. Powerful brand. Powerful brand

. 84 –years experience. 84 –years experienceIBM has the highest levels of control and the lowest of technology risk or transfer.Strong research and development..

IBM use external IBM use external factors as factors as opportunity..opportunity..50% revenue out 50% revenue out of US and also of US and also 13000 partner and 13000 partner and flexible business. flexible business.

. The high budget for research and development, high capital investment .. . Grow in software market

IBM have strong enough in terms of financial, management and experience.


These ideas explain why things never go according to plan, as development set up strategy base on research These ideas explain why things never go according to plan, as development set up strategy base on research and analysis.and analysis.

IBM is flexible company, they can remix their strategy base on happening. Even thought variable factors make IBM is flexible company, they can remix their strategy base on happening. Even thought variable factors make noises in linear path, IBM has potential to reduce the direct impacts of them. noises in linear path, IBM has potential to reduce the direct impacts of them.

Base on simple factors in above, IBM can be success to achieve their respects about market as well as plan. Base on simple factors in above, IBM can be success to achieve their respects about market as well as plan.


IBM, should keep his position in the market as world's largest information technology company, with 80 years of leadership in helping businesses innovate.IBM, should keep his position in the market as world's largest information technology company, with 80 years of leadership in helping businesses innovate.

IBM should expand into new markets with promising growth through its partner's strategy network program. Already prospering high growth in China, India, Brazil, and Russia, gives them competitive advantage over other Western brands. IBM have the advantage to be top IBM should expand into new markets with promising growth through its partner's strategy network program. Already prospering high growth in China, India, Brazil, and Russia, gives them competitive advantage over other Western brands. IBM have the advantage to be top Western brand by rapidly expanding into these markets all the while developing new products, services, and solutions to better help its wide variety of customers from small to large.Western brand by rapidly expanding into these markets all the while developing new products, services, and solutions to better help its wide variety of customers from small to large.

To improve and maintain its corporate image, IBM needs to find new and better ways to be philanthropic company worldwide. For examples improving job satisfaction, communities, and living standards. IBM can also offer scholarships, educational assistance, and internships to To improve and maintain its corporate image, IBM needs to find new and better ways to be philanthropic company worldwide. For examples improving job satisfaction, communities, and living standards. IBM can also offer scholarships, educational assistance, and internships to improve educational system, which enable them to have quality staff, partners, customer, and suppliers. improve educational system, which enable them to have quality staff, partners, customer, and suppliers.

Recommendations

In conclusion refer to both analysis in macro and micro level of environmental factors on IBM strategy, IBM has strong competitors in hardware industry like Dell or Hp but IBM can work more powerful in software industry with few strong competitors like Microsoft.In conclusion refer to both analysis in macro and micro level of environmental factors on IBM strategy, IBM has strong competitors in hardware industry like Dell or Hp but IBM can work more powerful in software industry with few strong competitors like Microsoft.

IBM accuracy understand the demand for software and services skills - across Asia and worldwide - is growing. IBM accuracy understand the demand for software and services skills - across Asia and worldwide - is growing. Therefore, the computer technology industry still has high market growth rate. Therefore, the computer technology industry still has high market growth rate.

Although the external factors such Iraq war, SARS and bird flu have impacted on computer technology industry, IBM still exit on the market. This is because of they have strong enough in terms of financial, management and experience. Moreover, the technology Although the external factors such Iraq war, SARS and bird flu have impacted on computer technology industry, IBM still exit on the market. This is because of they have strong enough in terms of financial, management and experience. Moreover, the technology factor has effected directly to computer technology industry.factor has effected directly to computer technology industry.

Conclusion

References

• http://www.pmthink.com/2006/07/globalization-of-research-and.htm

•http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htmhttp://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm

• http://intelligentmeasurement.wordpress.com/2007/03/29/macro-or-micro-approach-http://intelligentmeasurement.wordpress.com/2007/03/29/macro-or-micro-approach-to-evaluation/to-evaluation/

•http://www.ibm.com/annualreport/2007/proxy_toc_1_excom2-1.shtmlhttp://www.ibm.com/annualreport/2007/proxy_toc_1_excom2-1.shtml

•http://jlbawards.venturenavigator.co.uk/index.php/content/169?s=true http://jlbawards.venturenavigator.co.uk/index.php/content/169?s=true

http://www.pmthink.com/2006/07/globalization-of-research-and.htm