SMARTER COMMERCE

Integrated Value Chain Solutions in the Age of the Customer

Madhuranath R

OVERVIEW
COMPANY PROFILE
About IBM
V-M-V of IBM

STRATEGIC ANALYSIS
PEST Analysis 5-Forces Analysis Strategic Maps Industry Success Factors Competency Matrix Triangle Model

Smarter Commerce
Target Market

Value Proposition

FUTURE GROWTH
Potential Market Strategic Maps Competency Matrix

STAR FRAMEWORK
Visual Representation Framework Description Framework Explained

COMPANY PROFILE

About IBM
History
Founded in 1911 as CTR Renamed in 1924 as IBM Operates in 170 countries

Business
Technology Solutions Business Consulting IT Services & Others

Rankings
Forbes Global #31,revenue Fortune #1, leadership Fortune #5, most admired

Leadership
Virginia Rometty CEO Sam Palmisano - Chairman 14 Board of Directors

Brand Equity
Market Cap - $227 Billion Global #2 Best Brand Global #1 Green Company

Financials
$107 Billion Revenue $16.3 Billion Net Income $18.5 Billion Returns

VISION
Solutions for a small planet

MISSION
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 & consulting businesses worldwide

VALUES
Dedication to every clients success Innovation that matters for our company and the world Trust and personal responsibility in all relationships

About SMARTER COMMERCE

IBMs Enterprise Marketing Management division leads Smarter Commerce Integrated lifecycle approach to Commerce for total customer-centricity Improves how firms connect with marketers, suppliers, partners, customers, web sites and even social networks Delivers value via Customer Insight & Customer-centric Value Chain Realignment throughout the lifecycle phases of Buy, Market, Sell, Service

Brings together IBMs core technologies & product portfolio

TECHNOLOGIES PRODUCTS

Integration Supply Chain Planning & Execution

Advanced Analytics

WebSphere, Sterling Commerce

Unica, Coremetrics

Cloud Computing
Social Networking

Cognos
IBM Collaboration Suite

Cross-Channel Commerce

Sterling Commerce, iLog

TARGET MARKET
Smarter Commerce solutions are applicable to most industries like
Banking & Insurance Communications Government Healthcare

Energy
Education Food

Oil & Gas

Retail Transportation Systems

But within a given industry Smarter Commerce targets specific businesses

E.g. Primary Target Market of Smarter Commerce for Retail comprises

B2B Retailers B2C Retailers

Online Retailers

VALUE PROPOSITION

STRATEGIC ANALYSIS

PEST ANALYSIS
POLITICAL China is the manufacturing hub for half of all products in world Global political sentiment against China is a potential risk ECONOMIC Global Recession is driving down margins across industries Global Retail Supply Chain inefficiencies waste $15 Trillion

SOCIAL Increased consumers access to information empowers them Current generation of consumer shares experiences and info quickly and with more people

TECHNOLOGICAL Tech provides more ways for consumers to connect to retailer Social networks have empowered consumers with an increased transparency & power of WOM

5-FORCES ANALYSIS
Threat of

New Entrant

5-Forces Analysis
New entrants cannot create Smarter Commerce solutions Suppliers of solutions are companies acquired by IBM Substitutes are only partial solutions as of now Customers in Retail Industry need novel solutions to maintain competitiveness Rivalry is non-existent as Smarter Commerce is a new industry introduced by IBM

MEDIUM

Bargaining Power of

Competitive

Customer

LOW

Rivalry LOW

Bargaining Power of

Suppliers

LOW

Threat of

Conclusion
Smarter Commerce Industry is ATTRACTIVE

Substitute

MEDIUM

STRATEGIC MAP
SOLUTION CAPABILITY
4
HIGH

CONSUTING CAPABILITIES

IBM
2

SAP Oracle
Accenture

0 0 LOW

LOW

RANGE OF1.5 SOLUTIONS

HIGH

Conclusion: Offering a broader range of solutions is as important as providing

Smarter Commerce Consulting. BUT only offering both gives maximum market share.

STRATEGIC MAP
SOLUTION COMPATIBILITY
4
HIGH

PROPRIETARY SOLUTIONS

SAP
2

IBM
Oracle

0 0 LOW

LOW

Accenture
INTEGRATED SOLUTIONS 1.5
HIGH

Conclusion: Ability to integrate proprietary with other solutions provides business

value as perceived by customer. Proprietary + Integrated Solutions is the name of game.

STRATEGIC MAP
BUSINESS MODEL
4
HIGH

IBM
Oracle SAP

I N N O VAT I O N

0 0 LOW

LOW

Accenture

P A R T N 1.5 S H I P S ER

HIGH

Conclusion: Building partnerships to serve more customers is as important as

constant innovation. These two factors contribute to strengthening of the business model

STRATEGIC MAP
BRAND EQUITY
4
HIGH

CUSTOMER SERVICE

IBM
SAP
Accenture

Oracle

0 0 LOW 1.5 MARKETING

HIGH

LOW

Conclusion: Building partnerships to serve more customers is more important than

just possessing Proprietary Solutions or Patents. Having both gives greater market share.

INDUSTRY SUCCESS FACTORS

Solution Capability
CRITICAL SUCCESS FACTORS
Smarter Commerce Consulting Integrated & Proprietary Solns

Business Model Brand Equity

IT Services

Partnerships & Outsourcing Continuous Innovation Marketing & Advertising Customer Service Excellence
Application Development Maintenance Services

THRESHOLD FACTORS

Performance Price

Scalability Delivered Quality Cost of Solution Deployment

Cost of Consulting

COMPETENCY MATRIX
KEY SUCCESS FACTORS Solution Capabilities
Smarter Commerce Consulting Proprietary Solutions Integration Capabilities Weight

50%
20% 15% 15%

IBM 9.7
10 10 9

Oracle 6.2
5 7 7

SAP 5.6
5 8 4

Accenture Others 4.3

4 2 7

Business Model
Partnerships & Outsourcing Continuous Innovation

25%
10% 15%

9.6
9 10

7.0
7 7

4.2
3 5

2.0
2 2

Brand Equity
Marketing & Advertising Customer Service Excellence

25%
15% 10%

10.0
10 10

6.0
6 6

4.4
4 5

4.0
4 4

Total Weight
Market Share

100%
100%

9.8
37%

6.4
20%

5.0
15%

3.7
10% 18%

Conclusion: Comprehensive Solution Capabilities, Innovative Business Model and

Brand Equity are the Key Success Factors to compete in Smarter Commerce Industry.

KSF MATRIX INTERPRETATION

Smarter Commerce Consulting capability is the single most important KSF in Smarter Commerce Solutions Industry Solution Capabilities + Marketing = 65% weightage These two factors contribute to IBMs market leadership Smarter Commerce brings together several technologies/ solutions and thus straddles several strategic groups Competitors of IBM Smarter Commerce offer partial solutions & thus have low market shares corresponding to their segments

TRIANGLE FRAMEWORK KSF

Smarter Commerce Consulting Proprietary Solutions
Integration Capabilities

Competencies
Analytics solutions like Coremetrics & Unica WebSphere middleware is an integration platform Value Chain Integration Solutions with iLog & Sterling Commerce

Continuous Innovation

IBM Smarter Commerce provides analytics powered integrated solutions for improving efficiencies and margins by delivering business outcomes throughout the lifecycle phases of the commerce Value Chain Smarter Commerce Consulting leverages analytics to help derive customer insight to identify new revenue streams for customers

Value Proposition

FUTURE GROWTH
SMARTER COMMERCE 2020

MARKET PROJECTIONS
Smarter Commerce Solutions market will be worth $70 billion as per the projections of IBM Enterprise Marketing Management IBM will be the leader with more than 50% market share

Smarter Commerce spans business consulting, technology solutions and IT services to give IBM 360 earnings potential
IBM leverages partnerships with ISV or IBM Service Vendors to service customers in the SME segment as well which increases the brand equity and dominance of IBM in Smarter Commerce

STRATEGIC MAP
FIRST-MOVER ADVANTAGE
4
HIGH

CUSTOMIZED SOLUTIONS

IBM
Oracle

SAP
LOW

Accenture
LOW

0 0 1.5 IMPLEMENTATION EXPERIENCE

HIGH

Conclusion: As a first-mover IBM gains unmatched implementation experience and

builds customized solutions which raises the entry barrier for potential competition.

STRATEGIC MAP
BUSINESS MODEL
4
HIGH

IBM
SAP Oracle

I N N O VAT I O N

0 0 LOW

LOW

Accenture

P A R T N 1.5 S H I P S ER

HIGH

Conclusion: Building partnerships to serve more customers is as important as

constant innovation. These two factors contribute to strengthening of the business model

STRATEGIC MAP
BRAND EQUITY
4
HIGH

CUSTOMER SERVICE

IBM
SAP
Accenture

Oracle

0 0 LOW 1.5 MARKETING

HIGH

LOW

Conclusion: Building partnerships to serve more customers is more important than

just possessing Proprietary Solutions or Patents. Having both gives greater market share.

INDUSTRY SUCCESS FACTORS

Implementation Experience
Implementation Experience Customized Solutions Partnerships & Outsourcing Continuous Innovation

CRITICAL SUCCESS FACTORS

Business Model Brand Equity

IT Services

Marketing & Advertising Customer Service Excellence

Application Development Maintenance Services

THRESHOLD FACTORS

Performance Price

Scalability Delivered Quality Cost of Solution Deployment

Cost of Consulting

COMPETENCY MATRIX
KEY SUCCESS FACTORS Solution Capabilities
Implementation Experience Customized Solutions Integration Capabilities Weight

45%
25% 10% 10%

IBM 9.7
10 10 9

Oracle 2.9
2 4 3

SAP 2.6
2 3 3

Accenture Others 2.3

2 2 3

Business Model
Partnerships & Outsourcing Continuous Innovation

25%
10% 15%

9.6
9 10

4.0
4 4

3.6
3 4

2.0
2 2

Brand Equity
Marketing & Advertising Customer Service Excellence

30%
20% 10%

10.0
10 10

5.6
6 5

4.4
4 5

4.0
4 4

Total Weight
Market Share

100%
100%

9.8
59%

3.9
15%

3.3
11%

2.7
7% 8%

Conclusion: Comprehensive Solution Capabilities, Implementation Experience

and Brand are the Key Success Factors to compete in Smarter Commerce Industry.

KSF MATRIX INTERPRETATION

Proven Implementation Experience will be the most important KSF in Smarter Commerce Solutions Industry by year 2020 Solution Capabilities + Marketing = 75% weightage These two factors contribute to IBMs continued dominance Smarter Commerce will become an independent industry and solution in its own right and new competitors will try to copy it Competitors from current partial solution segments will no longer be relevant and will be left out of the market game

STAR FRAMEWORK
Strategy Tracing Analysis Recommendation
Framework for Strategic Planning

FRAMEWORK DESCRIPTION
PURPOSE : To ensure Strategic Alignment in analysis and planning from Vision to Value Innovation REQUIRED : Awareness of basic Strategy Frameworks

OUTCOME : Derive the Value Innovation for the organization COMPONENTS

Foundational Triangle: Vision-Mission-Values of the organization Framework Triangle : KSF-SWOT-ERRC analysis of the industry Tactical Priority Axis : Priority of attributes in Tactical Planning Strategic Priority Axis : Priority of activities in Strategic Planning

FRAMEWORK EXPLAINED
Foundational Triangle / Guiding Triangle
Vision and Values form the foundation of a strategic plan and ultimately support the Mission which has the highest priority in terms of planning action for the short term

Framework Triangle / Analysis Triangle / Recommendation Triangle

KSF & SWOT are analysis frameworks which help in identifying the success factors and opportunities which help to derive the Value Innovation using the ERRC framework

Tactical Priority Axis

The attributes of Vision and Values have a lower priority during tactical planning. But that does not mean short term / tactical planning will ignore them completely as ultimately the Mission planning is done with the Values and Vision inputs as the basis.

Strategic Priority Axis

The activities of KSF and SWOT analysis have a lower priority during strategic planning. This is because KSF and SWOT are usually done in retrospect and do not need innovation. Whereas ERRC analysis is future focused and needs innovative thinking to arrive at Value Innovation strategies that will create a Blue Ocean for the company. However, KSF & SWOT are the analyses which provide inputs for ERRC analysis.

THANK Y U