IBM is an information technology corporation that delivers integrated solutions based on information technology and business process understanding. It has the following segments: Global Business Services, Systems, and Global Financing. (1). Cloud and Cognitive Software offers customers with integrated and secure cloud, data, and solutions. The Global Business Services category offers consultancy, application management, and BPO services. (1). The Global Technology Services division offers customers with complete IT infrastructure and platform services. The Systems division supplies customers with cutting-edge infrastructure platforms for hybrid cloud and corporate AI applications. (3). Global Financing offers client and commercial financing, as well as reprocessing and reselling obsolete equipment. Charles Ranlett Flint and Thomas J. Watson Sr. formed the corporation on June 16, 1911 in Armonk, NY. (5).
SWOT Analysis of IBM (International Business Machines Corporation)
IBM’s internal strategic aspects, which characterize the organization’s capabilities and issues, are its strengths and weaknesses, respectively. For example, the company’s global activities enable it to benefit from economies of scale, which helps to improve the company’s competitive position. On the other hand, IBM’s commercial opportunities and threats are external strategic elements that reflect the state of the information technology industry and the marketplaces in which the company competes, rather than internal strategic reasons. IBM must establish suitable strategies and processes in order to keep one step ahead of the competition while simultaneously growing and stabilizing the business in line with its capabilities. To ensure long-term development and survival in the face of substantial industry changes, it is critical to address the challenges presented in this IBM SWOT Analysis. (1).
Strengths of IBM
High-value brand: IBM is a well-known brand in the worldwide IT business. The brand’s worth is derived from the company’s competence in supplying clients with hardware and software solutions. (5) . Brand Finance ranked the firm 22nd in 2016. The brand value rises to $31.786 B. Since 1911, IBM has had a strong brand history that has grown and diversified globally. (1).
Business Model: IBM has always attempted to align its business strategy with the goal of maintaining positive connections with customers while also placing a high value on shareholders. It has made an effort to develop information technology solutions that are useful and innovative in the lives of those who use them. It is one of the factors that contributes to the company’s continued usage of the product. (5)
Diverse Offerings and Services: Product offerings from the firm are diversified, including cloud computing, artificial intelligence computer software and hardware, and other technologies. In addition, IBM provides services such as outsourcing, consulting, professional services, and management consulting. (4).
Strong Expertise in Acquisitions: IBM has bought several firms and sold some of its products. These choices have all added value to the organization in some manner. Between 2000 and 2012, IBM bought over 140 firms in important areas including analytics, cloud, security, and commerce. (3).
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Weaknesses of IBM
Focusing on Customized Product: IBM specializes in big and medium-sized business solutions. This is a very successful company concept with a modest market share. The remainder of the market is frequently happy with off-the-shelf software. The absence of these products makes IBM less appealing to rivals like Oracle and Sales-Force. (4).
Imitable Products: The company strives to reduce operational costs. The approach places less focus on product distinctiveness. As a consequence, rivals may easily build technology goods identical to IBM’s. (1).
Legal Problems: IBM has been involved in legal battles. Companies like Bridgestone America sued IBM over various issues. If this circumstance continues, the brand’s image may suffer. (3).
Expensive service and software solutions: IBM’s integrated customized solutions are pricey, but they’re ideal for businesses that want to construct a solid IT infrastructure. In many cases, this means purchasing IBM hardware, software, and services all at once, which may be a prohibitively expensive investment for any small business. When the economy is sluggish or uncertain, such investments in infrastructure are generally put off. During the last several years, IBM was unable to cross-sell its products which resulted in a decrease in income. (4 & 2)
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Opportunities for IBM
Demand of Cloud-Based Services: Between 2011 and 2020, the cloud computing industry is predicted to increase at an average annual rate of 22%. The market is estimated a value of $240 billion by 2020. IBM already is well positioned to capitalize on the increasing industry. (4)
Diversification in Various Industries: Because IBM has a low degree of diversity, there is a chance to diversify the company’s business in numerous areas. The firm may take advantage of this chance to expand into other areas by using its capabilities. (3 & 4)
Analyzing Market Data: Any firm can succeed if it recognizes consumer signals and understands consumer behavior. IBM can expand its market share and profitability by knowing what the market wants right now. (5).
Other Expansions and Acquisitions: IBM is in a position to make acquisitions and form new alliances. Considering the present scenario, this may be an excellent choice. It is clear that IBM’s previous acquisitions have had a considerable impact on the company’s market share. (3).
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Threats for IBM
Confidentiality: Users’ sensitive information is at risk of being leaked, which is a source of concern. (3).
Laws, Regulation, and Economic Policies: Laws and regulations change often and vary by country. Market and industry policy also affects changes. These may seriously impede a company’s operations. (5). These laws and rules frequently impose unneeded limitations on businesses, which they must then comply with.
Recession: Every company has suffered from COVID-19. During the shutdown, everyone stayed home. Assimilation of new environments originally affected work quality. The lockdown harmed staff morale and drive. After lockdown, the world economy collapsed. People are impoverished and in debt. Affordability trumps luxury. These trends have impacted business, particularly IBM. (2 & 5).
Currency Fluctuations: The global economy is unstable, and this affects firms’ finances. A multinational market makes things even more confusing. All of these issues pose a significant hazard. (5).
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Recommendations for IBM
IBM’s future seems to be in doubt at the moment. IBM was once a household brand in the IT business, but it has since lost its luster and reputation. Given the dangers and disadvantages it faced, as well as other rivals’ more arduous efforts to remain current, the firm succumbed. If IBM is able to return to its former glory and become a household brand in the IT industry once again, we don’t know yet. Only time will tell whether or not the brand can improve its present trajectory or whether it will continue to decline. However, it is recommended that IBM can form partnerships with companies from other sectors in order to take advantage of technology integration possibilities. Besides, increasing company diversification will help to disperse risk and decrease risk exposure in the information technology sector. Lastly, innovation processes should be improved in order to increase product originality and enhance the advantage of goods against imitation and competition.
REFERENCES
- http://panmore.com/ibm-swot-analysis-recommendations
- https://www.mbaskool.com/brandguide/it-technology/652-ibm.html
- https://www.edrawmax.com/article/ibm-swot-analysis.html
- https://strategicmanagementinsight.com/swot-analyses/ibm-swot-analysis/
- https://pestleanalysis.com/ibm-swot-analysis/#IBM_SWOT_Analysis_Conclusion
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