INTRODUCTION

Based on Armonk, New York, IBM was founded in 1888 as Herman Hollerith and the Tabulating Machine Company. It was incorporated in 1911 as Computing-TabulatingRecording Co. The company later changed its name to International Business Machines (IBM) corporations in 1924 after becoming a fortune 500 companies. IBM was one of the leader brands of I.T industry which is basically related to computing various dimension of technology weather it is about gadget or the software. It has developed products from punch-card tabulating machines to room sized calculators and main frame computers. In 1980, the company introduced IBM Personal Computer (PC) in which the processor came from Intel and operating system from Microsoft. In 1992, the company introduced laptops which were named ThinkPad. IBM introduced cost effective technologies like instead of pure silicon chip, they introduced a blend of silicon and germanium. IBM has On Demand Innovation services where different teams offer business transformation and technology consultation services. IBM has won several accolades. It is known to have more patents than any other American Technology company. In addition to being ranked among the Worldwide Top 20 Semiconductor Sales Leaders, IBM boasts of its employees achievement in the field of science and technology, Three Nobel prizes, four Turing awards, five National Medals of Technology and five National Medals of science. Now-a-days, IBM is the largest information technology company and the eight largest companies in the world with workings in over 170 countries. In addition to industry segments, IBM provides results of its operation in four geographic segments such as Americans, Europe/ Middle East/ Africa, Asia pacific and OEM. IBMs subsidiaries are situated in worldwide. The company is generating more than 60% revenues from outside of US.

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VISION AND MISSION STATEMENTS OF IBM

IBM has both mission and vision statements.

Vision Statement: Solutions for a small planet Mission Statement: At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide. Proposed Vision Statement The proposed vision statement is To maintain quality, by continuous innovation and creativity, and to satisfy consumers Proposed Mission Statement IBM strives to provide the world with leading and best innovations in the IT industry, for people who appreciate the brands quality. Products of utmost reliability and rigidness include Computer systems, software, storage systems &microelectronics. IBM provides unmatched build quality known for its durability. We are committed to stay in the market as a continuous leader in technology and innovation and at the same time being profitable for our investors. We follow the belief of respect for the individual, the best customer service and superior accomplishment of all tasks. We give continuous motivation, appraisal and promotions to our employees. IBM is committed to all environmental leadership in all of its business activities, from its operations to the design of its products and use of its technology. The mission of the IBM Corporation is really three Values that were created with the help of 319,000 IBM employees. The mission, vision, and values of the IBM Corporation have been the same since the company was incorporated in 1911. In 2003, more than 319,000 global IBM employees (IBMers) participated in a 72-hour Values Jam, which redefined the values which guide IBM in the development and delivery of its technology and business products and services. The Values that were designed from the consensus of the IBMers are:

"Dedication to every client's success

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Innovation that matters, for our company and for the world Trust and personal responsibility in all relationships"

How these IBM values are used by the IBM leadership team is described this way by IBM CEO Samuel J. Palmisano:Clearly, leading by values is very different from some kinds of leadership demonstrated in the past by business. It is empowering, and I think that's much healthier. Rather than burden our people with excessive controls, we are trusting them to make decisions and to act based on values - values they themselves shaped.

OBJECTIVES & STRATEGIES OF IBM

. There are some long term objectives and strategies of IBM. These are: Drive revenue growth through new markets, new offerings and new products both developed and acquired. Focus on productivity to improve margin Deploy cash to fund growth and provide shareholder returns via dividends/ buybacks IBM is repositioning itself from a computer company to an information technology service company through a series of acquisitions and divestitures. To expand its businesses in the worldwide IBM had to complete 13 acquisitions of approximately $4.8 billion. After completing thirteen acquisitions, IBM concentrated on becoming stronger in high-added businesses. It concentrates mostly on development and manufacture of the advanced information technologies, including computer systems, software storage systems microelectronics etc. Moreover, it also engaged 50,000 employees in an online intranet discussion over a period of three days using its Jam technology IBM generated over 46,000 ideas through this.

PRODUCTS AND SERVICES OF IBM

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Products: IBMs products are basically divided into four parts. Such as: Software, systems,
storage and additional products.

Software:

Product finders Downloads Business analytics (Cognos, SPSS) Enterprise content management Information management (DB2, Informix, Info Sphere) Lotus (collaboration) Rational (software and systems delivery) Tivoli (service management) Web Sphere (integration and optimization) System z software Pure Systems Power Systems (AIX, IBM i, Linux) System z (Mainframe) System x (series) Blade servers UNIX servers Systems software Disk systems Tape systems Storage area networks Network attached storage Certified used servers and storage Certified used personal computers Networking Point of sale Security Semiconductors Upgrades, accessories and parts Software financing Financing for medium business All products

Systems:

Storage:

Additional Products:

Services: On the other hand, IBMs service sectors are basically divided into 5 sections such as
:

Business service:

Application innovation Business analytics Business strategy Commerce consulting

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Midmarket expertise Business continuity and resiliency Cloud Data center Integrated communications Mobility services Security Software Strategy and design Systems lab Technical support End user services Application management Global process services IT infrastructure services IT outsourcing Offerings Certification Conferences & events Consulting alliances IT services financing Project financing

IT services:

Outsourcing services:

Training:

Additional services:

PORTERS FIVE FORCES MODEL

Threat of New Entrants The threat of entry is low because the costs of R&D, support products and services, manufacturing, and distribution are very high. Bargaining Power of Customers As there are lot of similar products in the markets which are also available so the bargaining power of the customers are also high. Bargaining Power of Suppliers In most areas of IBM, there are number of suppliers which make the power of suppliers low. Substitutes
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IBM provides such a number of products which makes a very low or no substitutes. Competitive Rivalry As there are large companies like HP, Microsoft and EDS so the competitive rivalry is very high among the companies.

EXTERNAL OPPORTUNITIES AND THREATS Opportunities:

Globalization in order to balance the fluctuations: In order to balance different fluctuations in different economies globalization is must. And globalization is one of the major opportunities of IBM to reduce or balance the fluctuations in economies all over the world as IBM s products and services are on the way of globalization. Use patents to generate revenue: Another opportunity for IBM is to use patent to generate revenues. As IBM discovered or launched so many products and services every year, they can use patent charge and also generate huge profits. Creating products appealing to a younger generation: IBM is providing or producing such products or services that are appealing to young generations. And it is the opportunities for IBM as young generations are attracted to their products and services. Hire and use of international expertise: As IBMs business segments are situated all over the world so it would be a great opportunity for IBM to hire and use international expertise to produce more efficient products and services. If IBM hires international expertise then it would be able to make diversified products and services and customers also would be attracted to use that product and services. Focus more on OEM: If IBM will focus more on OEM (Original Equipment Manufacturer) then it would be a great opportunity for IBM.

Threats
Over reliance on developing economies like India: Reliance is good for development but over reliance on any country may be harmful or sometimes it may be a threat to any business organization. From this case study, we have found that IBM is over relied on India and the growth rate is about 38%. That over reliance is a threat for IBM.
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Unstable electronics market: Worlds economy is changing day to day. That is why electronic market is unstable too. And it may be a treat to IBM. Strong competition from Microsoft & HP: IBMs major competitors Microsoft and HP are competing very strongly with IBM now-a-days. So that Fierce competition from Microsoft and HP would be a threat for IBM. Rapid product development from competitors: IBM competitors are also developed their products and services rapidly which may be a great threat for IBM. Customers having low switching costs: IBM is producing a lot of new products and services to generate more revenues every year. But customers are not used to use a new products and services overnight. It takes time to use a new product or service for a customer. Moreover, it is seen that customers also do not want to switch from old product to new one, which generates a lower switching cost. And this low switching cost generates threat to IBM. Change in technology: Change in technology rapidly may be a great treat to IBM.

INTERNAL STRENGTHS AND WEAKNESSES Strengths

Brand name: Brand name is very important for every business organization. For IBM, it has achieved a huge popularity across the world. Everyone knows IBM by its name. So we can say that it is a big strength for IBM. Diversification: Diversification is the strength for IBM as it has diversified its major sections such as software, hardware, financing etc. Rising revenue to 91 billion and rising net income to $9.4 billion: Another strength for IBM is that its rising revenue to 91 billion and rising net income to $9.4 billion. Acquisition of Watch Fire Company in 2007: In 2007, IBM acquired Watch fire Company which also added the strength of IBM. Widespread operations in 170 countries: IBM is spreading its operation throughout the world. From the case study, we have found that IBM has widespread its operation in 170 countries which leads to a great strength for IBM. Innovation of Jam capability: Innovation of jam capabilities is one of the major strength of IBM.

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Rise of earnings per share (23% in 2006): As IBMs rate of earnings per share is increasing day by day so it is also considered a huge strength of IBM.

Weaknesses
Lack of synergy resulting from a series of acquisitions and divestitures: There is a lack of synergy resulting from a series of acquisitions and divestitures. That is why it is a major weakness of IBM. Too many employees: In IBM, there are a lot of (around 400000 employees) employees working everyday in different segments. It is also impossible to take care, coordinate, organize, motivate, and control all the employees at time. So it is a major weakness for IBM Concentration or focus on three major divisions or segments puts the company at a vulnerable position if revenues from them decline: One of the major weaknesses is that over concentration on only three major segments puts the company at a vulnerable position if revenues from them decline. Difficult to coordinate over four geographical segments: IBMs business segments are divided into four geographical segments, but sometimes it is quite difficult to co -ordinate all the segments perfectly and flawlessly. So it is also a weakness of IBM. Declining profit margins from hardware: From the case study, we have found that there is a decline of profit margin from hardware which is a weakness of IBM.

SWOT MATRIX

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Strengths 1. 2. Brand name Rising revenue to 91 billion and net income by 9% to $9.4 billion Diversification

Weaknesses 1. Lack of synergy resulting from a series of acquisitions and divestitures Difficult to coordinate over four geographical segments Too many employees Concentration or focus on three major divisions or segments puts the company at a vulnerable position if revenues from them decline Declining profit margins from hardware

2.

3. 4.

3.

IBM

Acquisition of Watch fire Company in 2007 Innovation of Jam capability Ranks second in market capitalization, net income, and long-term growth behind Microsoft Widespread operations in 104 countries Rising earnings per share

4.

5.

6.

5.

7.

8.

Opportunities 1. Globalization in order to balance the fluctuations in different economies Create products appealing to a younger generation

S0 Strategies 1. Use Innovation Jam technique to get in touch with younger customer base in order to appeal to them well Capitalize on worldwide existence to hire international expertise to a larger extent Use brand name to get into Gaming PCs and Laptops for youth in the world

W0 Strategies 1. Hire and use international expertise in order to eradicate lack of synergy within business units Look for new emerging markets where profitable business can be carried out from hardware products

2.

2.

2. 3. Use patents to generate revenue Focus more on OEM 3. 5. Hire and use international expertise

4.

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Strengths 1. 2. Brand name Rising revenue to 91 billion and net income by 9% to $9.4 billion Diversification

Weaknesses 1. Lack of synergy resulting from a series of acquisitions and divestitures Difficult to coordinate over four geographical segments Too many employees Concentration or focus on three major divisions or segments puts the company at a vulnerable position if revenues from them decline Declining profit margins from hardware

2.

3. 4.

3.

IBM

Acquisition of Watch fire Company in 2007 Innovation capability of Jam

4.

5.

6.

Ranks second in market capitalization, net income, and long-term growth behind Microsoft Widespread operations in 104 countries Rising earnings per share

5.

7.

8. Threats 1. Over reliance on developing economies like India Unstable electronics market Change in technology Customers have low switching costs 3. 5. Rapid product development from competitors Strong competition from Microsoft & HP

ST Strategies 1. Use rising revenues to invest in latest technologies. Capitalize on financial strength by acquiring more small similar businesses like Watch fire to compete better with MS & HP Use Innovation Jam talent to engage in product development

WT Strategies 1. Reposition employment to more profitable regions Focus on reasonable horizontal acquisition to safeguard against unstable electronics market.

2.

2. 3. 4.

2.

6.

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The SWOT Matrix of IBM lists its strengths, weaknesses, opportunities and threats

and then

devises strategies by aligning the strengths with the opportunities, weaknesses with the opportunities, strengths with the threats and weaknesses with the threats. The aim is to capitalize on the strengths by taking advantage of the opportunities, overcoming the weaknesses, and undermining the threats. Coming to the strengths and opportunities cell, Strength5 and opportunity 2 it can use the innovation jam technique to appeal to the demands of a younger population. Coming to the weakness opportunities cell, weakness 1 and opportunity 5 have been aligned by devising the strategy of eradicating lack of synergy within business units. Coming to the strengths threat cell and aligning the weakness of change in technology (threat 3) with the strength of rising revenues (strength 2) the strategy arrived at is that IBM should use revenues to invest in latest technologies. Aligning the weakness of too many employees (weakness 3) with the threat of over reliance on developing nations (threat 1), the company should reposition employment in more profitable regions.

THE BOSTONS CONSULTING GROUP (BCG) MATRIX

Relative market share position

Star
Industry Sales growth rate
IBM

Question mark

Cash

Dogs

As IBMs market share position and Industry growth rate is high in the market so we can say that IBM is now stars which represents that the companys best long term opportunities for growth and profitability. Divisions with a high relative market share and high industry growth rate should receive substantial investment to maintain or strengthen their dominant positions.

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Forward, backward and horizontal integration; market development and product development are appropriate strategies to consider.

GRAND STRATIGY MATRIX

The grand strategy matrix defines and analysis the current position of the company. According to our analysis, we place IBM in the fourth quadrant. It is a slow growth firm, which has a strong competitive position in the industry.

CONCLUSION AND RECOMMENDATION

The study shows that IBM has ample room for improvement in its Internal as well as external environment. The fact that the company needs to further strengthen its brand image can be done through exploiting potential markets in the long run. In addition, IBM has some loss making departments which are a burden on the company. The company has not yet come up with any strategy to divestiture such departments. There is room for improvement IBM needs to reinstate its line of brands through effective advertisements around the global market. There are also some recommendations or strategies for IBM: The company needs invest more in R&D in order to gain market leadership through differentiation. IBM needs to get rid of their loss making departments as they are generating continuously losses. This can be done through divestiture.

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For the companys profit making departments IBM should use product development and market penetration as competitive strategies. IBM should also launch android based Tablets to cater the markets new demand for touch screen Tablets IBM should cater the young generation by providing high end gaming PCs and Laptops. They also should improve their marketing department as well. There can be more of celebrity or branded programming entertainment.

IBM should reduce or lay off its employees as they are a burden on the company. They should move forward with the plan of acquiring intensive strategies.

Moreover, we see that IBM is compromising itself from customer driven company to innovation driven company as it seeks to be in this globally competitive environment so that it can render value added business and services to its customers. And that is why IBMs new strategic plan is to attract more customers as well as young generation in the worldwide by developing its products and services which should be more innovative so that it will generate high value for its customers and high profits for its shareholders.

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