CASE ANALYSISBY URMI ARORA

“I learned to always take on things I’d never done before. Growth and comfort do not coexist.”

-Ginni Rometty-

International Business Machines Corporation(IBM) manufactures and sells computer hardware and software, offers infrastructure services and provides global consulting services.

ROOTS OF THE COMPANY

1910s to 1940s

IBM’s growth exploded, led primarily by sales of tabulating machines.

Established some of IBM’s most successful business tactics such as exceptional customer service, knowledgeable sales force and a focus on large scale solutions for businesses.

1950s to 1980s

Worked with the government to build the air defense SAGE computer system.

Launched revolutionary computers called System/360, producing approximately 70% of all computers.

1980s to 2000sDuring the 80s, its market share and profits eroded as the PC revolution changed the way consumers bought technology.

In late 90s, it introduced the iconic ThinkPad, which helped regain lost share.

TODAYIBM is the largest and most profitable information technology company in the world, with over $103 billion in sales and holds more patents than any other US based technology company.

With such a long history of ups and downs, how has IBM been able to succeed?

IBM reconnected the company’s business units and created a consistent, universal message.

Business was made genuinely global by following similar practices!

IBM completely transformed its portfolio.It sold its ThinkPad division to Lenevo and exited disk drives. It embraced global consulting and data analytics by acquiring close to 100 firms, including PricewaterhouseCoopers.

Success comes from leadership, not mere survival!IBM understood the relevant trends, figured out how its strengths and resources could capitalize on them. They recognized the growth of Internet and then helped clients harness it for their businesses, with their eBusiness initiatives.

Can IBM succeed with its current strategy?

IBM now focuses on solving the world’s most challenging high-tech problems, such as better water management, lower traffic congestion, and collaborative health care solutions. It aims at creating a “Smarter Planet”

IBM has invested a lot and continues to do so in its R&D Sector and approximately 30 percent of its annual R&D budget goes towards long-term research.

Research and Development

Who are IBM’s biggest competitors today, and what risks do they face with their current strategy?

MAJOR COMPETITORS OF IBM

RISKS WITH CURRENT STRATEGY•Cloud based services will cannibalize its three mainstays: data center services, computer hardware and software. •Sustainable solutions to the current problems have to be found out

•Low success rate

•To remain ahead of competitors

Created by Urmi Arora, NSIT, during a marketing internship under Prof. Sameer Mathur, IIM Lucknow.