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Yao Ju M99Y0206
Ninh M997Z211
Nancy M997Z228
Melva M997Z227
James
M99Z0216
Allison
M99Y0105
Group 3-Members
About IBMInternational Business Machines (IBM)
(NYSE: IBM) is an American
multinational computer, technology and
IT consulting corporation headquartered
in Armonk, New York, United States.
IBM is the world's fourth largest
technology company and the second
most valuable global brand. (after Coca-
Cola).
IBM manufactures and sells computer
hardware and software (with a focus on the
latter), and offers infrastructure services,
hosting services, and consulting services in
areas ranging from mainframe computer to
nanotechnology.
HistoryThe company which became IBM was founded in 1896 as the Tabulating machine company in New York.
Since November 1910, a Hollerith subsidiary existed in Germany, the DEHOMAG (Deutsche Hollerith-Maschinen GmbH), founded as a license holder from this company.
In 1922, the renamed CRT took over 90% of
DEHOMAG, which was in license debt due to
the German inflation 1914-1923.
In 1949 DEHOMAG finally took the name
IBM Germany.
Competitive strategyDifferentiation & Focus strategySuperior productsPremiums priceFocus on large mainframe
CustomerLarge organization(main customer)
End Users (through independent retailers (circuit city) & value-added resellers)
Strategy implementationEnsure a steady stream of cutting-edge
products by allocating vast resources to
R&D
Open architecture policy: license to other
manufacturers and software developers in
order to develop more innovative
applications.
General environment analysis(1980s - Late1990s)The change of technology:Rapid increase in power of desktop PCs
and the development of internetIntranets emergedDeclining demand for large mainframe
computers and centralized data processing
systems.
Challenge&Problem (1980s - Late1990s)1980s - Early1990sIts venerable mainframe business, which
had been a low-growth but highly profitable market suffered a profit squeeze
due to falling price and declining demand.
Mid-1990sIBM’s traditional businesses were in
trouble.The worldwide PC market fell to about
8%, third behind Dell and Compaq.Unix-based computers , were growing
rapidly around the world , IBM was able to capture only a small share of that business.
Late1990sThe growth rate in the server market was
only about one-third as fast as that of
major competitors such as SM.
SWOT analysis-S
R&D and product developmentCompetitive superior depend on the
knowledge and experience.Familiarly with customer’s operation.
SWOT analysis-W
Quality differentiation strategy became less effective as some of its product – markets began to mature and customers’ purchase criteria changed.
IBM’s premium price position put it at a disadvantage in attracting the buyers who became more price-conscious.
SWOT analysis-O
dot-com revolutionBuyers tended to be less technically
sophisticated, more price-conscious and easy to use.
The internet would change everything.The explosive growth is in service.Internet is really about business, not only
information superhighway.
SWOT analysis-Tdot-com revolution Buyers tended to be less technically
sophisticated, more price-conscious and easy to use.
Competitor response (Dell)
→low price custom-designed and convenient to purchase on Web.
→User friendly service and support program.
Based on internal resourcesContinue using superior quality and
premium pricesRe-organize and reallocate internal
resources
New thought1994, a big revolution in reexamined all
the firm businesses, customer segments,
competitors and potential competitors was
made by Lou Gerstner and task force of
other executives (including many from
marketing and sales ranks).
“The internet would change everything”
The real leadership in the industry is
application of the technology instead of
creation of technology.the explosive growth in service
internet is truly business!
Corporate strategyde- emphasizing the development and manufacture of high – tech hardware (selling the firm’s PC business to China’s Lenovo group Ltd.)Provide customers with e – business
engineering, software and outsourcing services.
Leverage the firm’s existing competences and its long - term relationships with its traditional customers.
They also expanded the scope of both its new service and old hardware business to embraced smaller customers. (improve the products and supply consulting services)
2002, Samuel J. Palmisano continue broadening the scope of IBM’s service offering.
New Business and Marketing StrategyBased on internal resourcesContinue using superior quality and premium
pricesRe-organize and reallocate internal
resources
Managing customer relationship by teams integrating representatives from sales, consulting, software, computers and research lab
Retraining salesforce Help shifting the emphasis from
selling products to designing and
implementing services
Acquiring PricewaterhouseCoopers Consulting
Help focusing more on executive-level
business problem solvingEach member of IBM may be considered an
expert with full ability to serve the customers the best
Issuing ads stressing the firm’s extensive consulting resources& capabilities
Placing ads in a variety of media
ResultRevenues in 2005 were more than $91
billion, revenues overall have grown by $10 billion since the dot-com crash in the first year of century.
More significantly, the firm’s gross margin improved by three points from 2004 to 40 percent, and income from continuing operations topped $8 billion.