Case Study IBM

History of IBM: 

History of IBM .

Brief Overview of IBM 2006-2007 year: 

Brief Overview of IBM 2006-2007 year IBM stands for International Business Machines Corporation . This sixth consecutive year that IBM is the global leader in the application development software market. IBM is the leading market share vendor in total software revenue, with 25.2 percent market share, more than double the share of its nearest competitor

Brief Overview of IBM: 

Brief Overview of IBM IBM stands for International Business Machines Corporation. Founded in 1888 in Endicott, NY, It is known to have more patent then any other American technology company.

Herman Hollerith: 

Herman Hollerith IBM was founded in 1988 as Herman Hollerith and the tabulating machine Company. This company was later changed his name, what is now IBM. Punch cards become the industry standard of input for the next 70 years.

Thomas J. Watson, Sr.: 

Thomas J. Watson, Sr. Became president of IBM in 1914. Built IBM into a global corporation by investing in his employees and research .

1944 ASCC: 

1944 ASCC The world’s first large-scale calculating computer. Automatic Sequence Control Calculator, a.k.a. Mark I. Used electromagnetic relays to solve addition problems in < 1 second, multiplication in 6 seconds, and division in 12 seconds.

1946 – The IBM 603: 

1946 – The IBM 603 The IBM 603 Electronic Multiplier, the first commercial product to incorporate electronic arithmetic circuits. Used vacuum tubes. Would perform faster than the ASCC.

1948 – IBM SSEC: 

1948 – IBM SSEC IBM’s first large-scale digital calculating machine. It was the first computer that could modify a stored program. Contained 12,000 vacuum tubes and 21,000 electromechanical relays.

1948 – IBM 604: 

1948 – IBM 604 First assemblage of digital electronics replaceable as a unit .

Thomas Watson, Jr.: 

Thomas Watson, Jr. Became president of IBM in 1952 Moved IBM away from punch cards and into electronic computers.

1952 – IBM 701 : 

1952 – IBM 701 IBM’s first production computer. Designed primarily for scientific calculations .

Magnetic Storage Devices: 

Magnetic Storage Devices

1953 – IBM 650 Magnetic Drum Calculator: 

1953 – IBM 650 Magnetic Drum Calculator The most popular computer of the 1950s .

1954 – NORC: 

1954 – NORC The fastest, most powerful electronic computer of its time .

1959 – IBM 1401: 

1959 – IBM 1401 The first high-volume, stored program, core-memory, transistorized computer. Included the IBM 1403 printer.

1961 – 7030 STRETCH: 

1961 – 7030 STRETCH IBM’s first attempt in the supercomputer industry.

Blue Gene: 

Blue Gene IBM’s Super Computer Project

Blue Gene: 

Blue Gene Its name is an allusion to IBM’s nickname “Big Blue” and the corporation’s official color: blue. a computer architecture project designed to produce supercomputers with operating speeds in the petaFLOPS range.

Blue Gene/L: 

Blue Gene/L Developed in partnership with Lawrence Livermore National Laboratory (LLNL) Started in 1999 Was to be applied to protein folding

Blue Gene/L (continued): 

Blue Gene/L (continued) Is a massively parallel computer. Utilizes 8 cabinets, each holding 1,024 computer nodes Was upgraded to 16 cabinets in 2004, achieving 70.72 TFLOPS Upgraded again multiple times, resulting in 64 total cabinets in 2005

Vision Statement : 

Vision Statement Solutions for a small planet

Proposed vission Statement : 

Proposed vission Statement we strive to lead in the invention, development and manufacture of the industry's most advanced technologies.

mission statement: 

mission statement We translate advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide

Proposed mission statement: 

Proposed mission statement 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 world wide. our values Dedication to every client's success Innovation that matters, for our company and for the world Trust and personal responsibility in all relationships

Core value: 

Core value "Innovation that matters for the world"

Proposed core value: 

Proposed core value invention, development and manufacture of the industry's most advanced information technologies

Slide 30: 

Comprehensive Strategy-Formulation Framework Stage 1: The Input Stage Stage 2: The Matching Stage Stage 3: The Decision Stage

Slide 31: 

. Strategy-Formulation Analytical Framework Internal Factor Evaluation Matrix (IFE) External Factor Evaluation Matrix (EFE) Competitive Profile Matrix (CPM) Stage 1: The Input Stage

Slide 32: 

Strategy-Formulation Analytical Framework SWOT Matrix SPACE Matrix BCG Matrix IE Matrix Grand Strategy Matrix Stage 2: The Matching Stage

Steps in the environmental analysis: 

Steps in the environmental analysis Assess the nature of the environment Audit environmental influences Identify key competitive forces Identify competitive position Identify key opportunities and threats Strategic position

Differences between external & internal environments: 

Differences between external & internal environments External environment: The management has no control over most of its components. React to the changes in the environment. Internal environment: The management has varying degree of influence of its components. Seeks to change the environmental influence itself.

Porter’s Five forces industry analysis: 

Porter’s Five forces industry analysis Potential entry of new competitor Buyer Supplier Potential development of Substitutes products Competitive rivalry Threat of substitutes Bargaining power Bargaining power

Porter’s five force frame work: 

Porter’s five force frame work Competitive Rivalry : The strength of competition in this industry is very high; the main rivals are HP, Microsoft, Dell, and Fujitsu Siemens Computers, they compete with international, national, regional, and local area. The Threat of Entrants: The threat of entry is high because the costs of R&D, support products and services, manufacturing, and distribution are very high

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Bargaining Power of Buyers: The power of buyers is high because the switching costs for buyers are low; there are also many product choices for the buyers. Bargaining power of suppliers: There are two biggest processor suppliers in the world who have very strong power on the chip supplying. However, the power of supplier for other low required materials and parts is lower than the main suppliers Threat of Substitutes The web hosting business of other companies and some advanced devices and computers could cause threat of substitutes.

Slide 38: 

It involves identifying factors that influence the organisation. These factors include: Political / legal Economic Social Technological PEST analysis

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. Political: -IBM has less political barrier ,so IBM can explore new markets, In general international operations are highly influenced by the governmental policies and their laws, but in this case there is little effect because most of countries are looking for developments and new technology, Economic: National growth rates. increase in fuel prices and economic fluctuation can crimp the purchasing power of consumers Social: IBM has strong customer perception There is Positive customers' perception toward new technology around the world. Increase in population and internet users .

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Technological IBM has Advanced technology and advanced research department. Cyber protection and the chemical the use in making hardware; like carbon, germanium, and silicon IBM made the some of the major technologies like to ,blue gene

External factor evaluation matrix (EFE): 

External factor evaluation matrix (EFE) ‘The EFE matrix allows strategies to summarise and evaluate economic, social, cultural, demographic, environmental, political, governmental, legal, technological, and competitive information’.

External factor evaluation matrix (EFE) : 

External factor evaluation matrix (EFE) External opportunities weight Rating Weighted score Increasing internet usage .10 3 .30 Mobile phone market are expected to grow .12 4 .48 Handheld computers are expected to grow .10 3 .30 Video games market revenues increase .10 2 .20 The I.T market in RUSSIA, CHINA ,INDIA expected to grow .10 4 .40 Maintaining low price leadership .06 2 .12 Global opportunities .06 4 .24 Explore new markets .06 4 .24

External factor evaluation matrix (EFE) : 

External factor evaluation matrix (EFE) Threats Inflation could crimp consumers spending .06 2 .12 Competitors are strong .08 3 .24 price war .04 2 .08 Increasing security threats – such as hacking attacks, viruses and worms – increase customer risk .04 1 .04 I.T advancement .08 1 .10 total 1 2.86

internal factor evaluation: 

internal factor evaluation This strategy formulation tool summarizes and evaluate the major strength and weaknesses

internal factor evaluation matrix (IFE): 

internal factor evaluation matrix (IFE) Internal strength weight Rating Weighted score Largest firm in I.T .08 4 .32 Strong global presence over 170 countries .09 4 .36 Variety of products .02 3 .06 Strong financial position .08 4 .32 Industrial leader in market capitalizing 92.79 billion .06 4 .24 40% revenue generate in U.S.A .04 4 .16 Wide network of distributors and dealers .06 4 .24 A unique approach to engage their employees in an intranet using its jam technology .06 3 .18 Strong customer relationship .04 3 .12 Leading technology .08 4 .32 Large manufacturer of supercomputer .05 4 .20 Competitive price .04 4 .16 Product affordability .04 4 .16

internal factor evaluation matrix (IFE): 

internal factor evaluation matrix (IFE) Internal strength weight Rating Weighted score Strong strategic planning to be an innovation corporation .08 4 .32 Advertising and promotion .08 4 .32 weakness Assets are decrease .02 2 .04 Declining revenue in Asia pacific .08 1 .08 Revenue decrease in 2005 .04 2 .08 Customers incentives .06 2 .12 total 1 3.80

Competitive profile matrix (CPM): 

Competitive profile matrix (CPM) ‘The CPM identifies a firm’s major competitors and their particular strengths and weaknesses in relation to a sample firm’s strategic position’. David 2001, p. 115 Key success factors (KSFs) Technology related Distribution related Marketing related Skills related Organisational capability Other types of KSFs

Competitive profile matrix (CPM) : 

Competitive profile matrix (CPM) Key success factors Market share Global expansion Price Advertising Product quality Technology Customer loyalty Product image Financial position Innovation Weight . 10 .10 .08 .08 .06 . 08 .08 .10 .10 .12 Rating 3 4 3 2 3 4 3 4 3 4 Score .30 .40 .24 .16 .18 .32 .24 .40 .30 .48 Total 1.00 3.02 3.36 3.02 IBM Rating 4 4 3 4 3 4 4 4 3 4 Score .40 .40 .24 .32 .18 .32 .32 .40 .30 .48 Microsoft Rating 3 3 3 3 4 4 4 4 3 3 Score .30 .30 .24 .24 .24 .32 .32 .40 .30 .36 HP Rating: 1=major weakness, 4=major strength

Slide 49: 

Strategy-Formulation Analytical Framework SWOT Matrix SPACE Matrix BCG Matrix IE Matrix Grand Strategy Matrix Stage 2: The Matching Stage

Swot analysis: 

Swot analysis strength weakness 1.Largest firm in I.T 1. Assets are decrease 2.trong global presence over 170 countries 2.Declining revenue in Asia pacific 3.Variety of products 3.Revenue decrease in 2005 4. Strong financial position 4.Customers incentives 5.Industrial leader in market capitalizing 92.79 billion 6.40% revenue generate in U.S.A 7. Wide network of distributors and dealers 8.A unique approach to engage their employees in an intranet using its jam technology 9.Strong customer relationship 10.Leading technology 11 Large manufacturer of supercomputer 12.Competitive price 13.Strong strategic planning to be an innovation corporation 14.Advertising and promotion

Slide 51: 

External opportunities Threats 1.Increasing internet usage 1.Inflation could crimp consumers spending 2.Mobile phone market are expected to grow 2.Competitors are strong 3.Handheld computers are expected to grow 3.price war 4.Video games market revenues increase 4. Increasing security threats – such as hacking attacks, viruses and worms – increase customer risk 5.The I.T market in RUSSIA, CHINA ,INDIA expected to grow 5.I.T advancement 6.Maintaining low price leadership 7.Global opportunities 8. Explore new markets

Slide 52: 

Strength-S 5.Industrial leader in market capitalizing 92.79 billion 13.Strong strategic planning to be an innovation corporation 10.Leading technology 4. Strong financial position 11large manufacturer of s.computer Weakness-W 2 Declining revenue in Asia pacific 4.Customers incentives Opportunities-O 2.Mobile phone market are expected to grow 3.Handheld computers are expected to grow 4.Video games market revenues increase 5.The I.T market in RUSSIA, CHINA ,INDIA expected to grow 8. Explore new markets 7.Global opportunities SO Entering in the mobile phone market(s4.s13 ,s10&O2) Entering in the video game console market(s4,s10,s13&o4) Entering in the Handheld computers (ss4,s10,s13&o3) Introduce fastest super computer in the world ( s11,s10,s13&o7) WO I ncrease customers incentives(w4,o7) Increasing marketing efforts in Asia Pacific (o5.o8,o7,&w2) Threats-T 4.Increasing security threats – such as hacking attacks, viruses and worms – increase customer risk 5.I.T advancement 1.Inflation could crimp consumers spending ST Developing of modern anti viruses and security solution(s13.t4) WT Increase customer incentives and Controlling the cost in order to providing products to customers at low price (w4&t1)

Slide 53: 

Internal strength position External strategy position Internal strength position External strategy position Financial strength( FS) Return on assets 6 Return on investment 6 Leverage ratio 6 Income employees 6 Inventory turnover 4 FS 5.6 Environmental stability (ES) Technologica l changes -1 Rate of inflation -2 Demand variability -3 Barrier to entry -1 Competitive pressure -2 ES -1.8 Competitive advantage Market share -1 Product quality -1 Product life cycle -2 Customer loyalty -1 Technological know-how -1 Control over suppliers & distributors -2 (CA) -1.33 Industrial strength(IS) Growth potential 5 Profit potential 5 Financial stability 6 Technological know-how 6 Resource utilization 6 Productivity, capacity 6 utilization IS 5.67 Space matrix

SPACE Matrix x-axis IS-CA 5.67-1.33=2.5 y-axis FS-ES 5.6-1.8= 3.8: 

SPACE Matrix x-axis IS-CA 5.67-1.33=2.5 y-axis FS-ES 5.6-1.8= 3.8 . FS +6 +1 +5 +4 +3 +2 -6 -5 -4 -3 -2 -1 -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 ES CA IS Conservative Aggressive Defensive Competitive

BCG Matrix: 

BCG Matrix . Dogs IV Cash Cows III Question Marks I Stars II Relative Market Share Position High 1.0 Medium .50 Low 0.0 Industry Sales Growth Rate High +20 Low -20 Medium 0

Slide 56: 

. Quadrant IV Concentric diversification Horizontal diversification Conglomerate diversification Joint ventures Quadrant III Retrenchment Concentric diversification Horizontal diversification Conglomerate diversification Liquidation Quadrant I Market development Market penetration Product development Forward integration Backward integration Horizontal integration Concentric diversification Quadrant II Market development Market penetration Product development Horizontal integration Divestiture Liquidation RAPID MARKET GROWTH SLOW MARKET GROWTH WEAK COMPETITIVE POSITION STRONG COMPETITIVE POSITION IBM Grand strategy matrix

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. I.E MATRIX 3.0TO4.0 2 TO 2.99 1.00TO1.99 3.00TO 3.99 2.00 TO2.99 1.00 TO1.99 EFE =2.86 IFE = 3.80 IBM IFE total weighted score EFE total weighted score

Slide 58: 

Strategy-Formulation Analytical Framework Stage 3: The Decision Stage Quantitative Strategic Planning Matrix (QSPM)

Quantitative Strategic Planning Matrix : 

Quantitative Strategic Planning Matrix product development Market development entering in the mobile phone market Developing of modern anti viruses and security solution Introduce fastest super computer in the world Increasing marketing efforts in Asia Pacific

Slide 60: 

Key internal factors weight Market development Product development strength AS TAS AS TAS 1.Largest firm in I.T .08 4 .32 3 .32 2.Strong global presence over 170 countries .09 3 .27 4 .36 3.Variety of products .02 2 .04 4 .08 4. Strong financial position .08 3 .24 4 .32 5.Industrial leader in market capitalizing 92.79 billion .06 6. 40% revenue generate in U.S.A .04 1 .04 4 .16 7. Wide network of distributors and dealers .06 8.A unique approach to engage their employees in an intranet using its jam technology .06 9.Strong customer relationship .04 10.Leading technology .08 3 .24 4 .32

Slide 61: 

Key internal factors weight Market development Product development AS TAS AS TAS 11 Large manufacturer of supercomputer .05 12.Competitive price .04 3 .12 2 .08 13.Strong strategic planning to be an innovation corporation .08 2 .16 4 .32 14.Advertising and promotion .08 4 .32 3 .24 weakness 1. Assets are decrease .06 3 .18 2 .12 2.Declining revenue in Asia pacific .08 1 .08 2 .16 3.Revenue decrease in 2005 .04 4.Customers incentives .02 1 1.91 2.58

Slide 62: 

Key internal factors weight Market development Product development OPPERTUNITIES AS TAS AS TAS 1.Increasing internet usage .10 3 .30 4 .40 2.Mobile phone market are expected to grow .12 2 .24 4 .48 3.Handheld computers are expected to grow .10 3 .30 4 .40 4.Video games market revenues increase .10 5.The I.T market in RUSSIA, CHINA ,INDIA expected to grow .10 4 .40 3 .30 6.Maintaining low price leadership .06 7.Global opportunities .06 4 .24 3 .18 8. Explore new markets .06 4 .24 3 .18

Slide 63: 

Key internal factors weight Market development Product development THREATS AS TAS AS TAS Inflation could crimp consumers spending .06 4 .24 3 .18 Competitors are strong .08 .32 4 .32 price war .04 3 .12 4 .16 Increasing security threats – such as hacking attacks, viruses and worms – increase customer risk .04 I.T advancement .08 2 .16 4 .32 total 1 2.18 2.92 1.91 2.50 GRAND TOTAL 4.90 5.42

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. From the QSPM analysis we suggest two alternatives strategies out of which we recommend product development strategy, we recommended following tree strategies of product development. Introduce fastest super computer in the world Developing of modern anti viruses and security solution entering in the mobile phone market Recommendations