Hill, T., & Westbrook, R. (1997). To keep that growth on track, IBM will invest $4 billion on those businesses throughout this year. (Photo: Public Domain) International Business Machines Corporation (IBM) is among the world’s biggest technology companies. The application of advanced SWOT analysis can enhance the Strategic competitiveness of IBM by providing more useful and detailed information. The changing regulatory framework and introduction of new stricter regulations impose a major threat to the IBM. Those investments could give IBM a foothold in the booming IoT market, which IDC expects to grow from $1.9 trillion to $7.1 trillion between 2013 and 2020. Pickton, D. W., & Wright, S. (1998). Lack of organisational commitment and high employee turnover can increase recruitment costs and reduce organisational productivity. Using strengths to reduce the threats- ST. Reducing weaknesses to reduce threats- WT. Thank you for your email subscription. The misalignment between the organisation's leadership style and its core strategic objectives can make the business organisation directionless. Usually, it is presented in the two-by-two grid form. The company may lose efficiency due to poor inventory management practices. The decision-making based on weighted SWOT analysis can strengthen the Strategic competitiveness of IBM and lead towards more informative strategic analysis. SWOT analysis from a resource-based view. 2015 IBM Annual Report 7 than 120 services, IBM Bluemix is the largest deployment of Cloud Foundry, an open source cloud application development platform. IBM SWOT analysis 2014-15 Strengths -First mover in cloud computing solutions for enterprises. can generate $10 billion in annual revenue within a decade. A SWOT analysis for social media in libraries. SWOT analysis of IBM can lead the company towards making effective and wise business strategies. SWOT analysis offers various advantages to the IBM as explained below: However, SWOT analysis of IBM has certain limitations that the company must consider to achieve its strategic objectives. It determines the business’s reach to the target market and ensures the easy accessibility. [big_title2]Example of a SWOT Analysis:[/big_title2] Here you have a simple example of the SWOT Analysis. IBM can identify the core competencies, do market projections and do future planning. Divesting lower margin businesses like low-end servers and its foundry business improved earnings per share, but it also caused revenue growth to dry up. Strong online presence on different social networking sites and efficient social media management can enhance the effect of positive e-WOM and develop strong relationships with customers. ~ 0.0 Page). IBM. This shift will result in lower impact of the negative trends in hardware market and higher profitability from sales of software and services. Online, 33(5), 35. High Brand Image-- The brand image enables an organization to attract the customers easily. If that happens, IBM's current price could seem like a bargain. Sixth International Conference on (pp. But if the company's strategic imperatives stay on track, it could evolve into a radically different business with much higher growth by the end of the decade. The complex interdependency between the internal (strengths/weaknesses) and external (opportunities/threats) environmental factors make the analysis more difficult. Leveraging strengths to exploit external opportunities. Overcoming weaknesses to exploit external opportunities. Fuzzy SWOT analysis. The diminishing boundaries and rising global interconnectedness allow the organisation to get into the international market; target geographically dispersed customer base and increased profitability. IBM is the globes’ 3rd biggest technology corporation and the world’s 2nd most valuable brand. It’s time to team up with one of our experts. com. IB Business and Management – Pre-Released Case Study 2015 SWOT Analysis IB Business and Management: www.IBBusinessandManagement.com IB BUSINESS AND MANAGEMENT – PRE-RELEASED CASE STUDY 2015: SWOT ANALYSIS Important! To do this, IBM combines the strengths-opportunities, weaknesses-opportunities, strengths-threats, weaknesses-threats. Team Up With Expert Writers To Complete Your Unfinished Essay. It is better to make small teams and ask all team members to make the lists individually. Friesner, T. (2011). Overcoming weaknesses to minimise the threats. Weakness. SWOT Analysis Of IBM 3012 Words | 13 Pages. Journal of management, 29(6), 801-830. Research firm Gartner (NYSE:IT) estimates that half of all U.S. companies will use hybrid cloud installations by 2017. The deteriorating economic conditions affect business performance when they directly influence the customers' spending patterns and purchasing power. Total cloud revenues rose 60% to $7.7 billion. The organisation currently has the following opportunities available in the market: IBM can improve its performance by exploiting the above-mentioned opportunities. For example, the company has an extensive intellectual property portfolio that contributes to competitive advantage against other information technology firms. Journal of business economics and management, 12(1), 24-48. Within the cloud unit, demand for hybrid cloud installations will likely grow. 2.-Brand reputation 3.-Branched out business 4.-Strong competency in acquisitions 5.-Integration of products and services Weaknesses 1.-Expensive service and software solutions. Shahir, H. Y., Daneshpajouh, S., & Ramsin, R. (2008, August). Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Global Presence of IBM across several technology based sectors 2. The framework is based on developing four types of strategies, including-. Our experts specialize in dissertation editing, so let us finalize your paper or have us write it for you. It enables the IBM to maximise its strengths, overcome the weaknesses, reduce threats and exploit opportunities. OpportunitiesOn the bright side, IBM's investments in strategic imperatives have expanded its business into interesting new areas. This section is available only in the 'Complete Report' on purchase. A SWOT analysis is a framework that is used to analyze a company’s competitive positioning in its business environment. Hybrid cloud installations combine local and cloud-based services for larger businesses which aren't ready to move all their data to the cloud yet. For example, this approach does not offer a broader overview of how internal and external environmental factors collectively influence the business in the short and long-run. To realize the challenges and aspects of the inside and outside environment of the company, we have to carry out a SWOT analysis. The prices charged by the business may not be perceived as justified when compared to the product/service characteristics. The globalisation pushes the organisation to cross national boundaries and deal with cultural diversity, which may have a detrimental impact if the organisation lacks the cultural intelligence. Subscribe Now To Get Your Discount Coupon *Only correct email will be accepted. Workplace diversity can also act as a major business strength, particularly when the organisation intends to operate in the international market. This simple framework is used to evaluate the positioning of a firm in a competitive market. Our writers are all set to help you with Essay Homework. While threats with long-term implications can be tackled after addressing the immediate threatening factors. Swot analysis ibm 1. Press release - Market Growth Insight - GRC Software Market 2020 SWOT Analysis by Players: IBM, SAP, ProcessGene, Oracle, ACL GRC - published on openPR.com Weaknesses of IBM is the second element of the SWOT matrix. The P/E is fully acceptable for IBM with 13.2 but the P/B is insane high with 13.4 which gives us a no go from Graham. IBM has long experience of working in the IT and technology Warren Buffett's Berkshire Hathaway (NYSE:BRK.B), IBM's single largest shareholder, remains bullish on IBM's long-term prospects. These mainframes have become the industry’s benchmark that competitors try to match. Strength. Google (NASDAQ:GOOG) (NASDAQ:GOOG) uses its Prediction API, Microsoft has Azure ML (machine learning), and Amazon recently launched Amazon ML. SWOT analysis does not consider the dynamic nature of a quickly changing environment. SWOT Analysis Strengths IBM’s core strength lies in its System/360 and System/370 mainframe series. (2016). • Litigations. IBM expects annual revenue from those businesses to hit $40 billion by 2018, which would account for nearly half of its projected annual revenue. The Internal Factor Analysis refers to all the factors within an organization, which impart strengths or cause weaknesses of a strategic nature to the IBM Corporation. A SWOT Analysis is a powerful tool to develop business strategies for start-up firms as well as for existing companies. Rometty believes that the unit can generate $10 billion in annual revenue within a decade. The identified factors are not ranked according to their importance and urgency, due to which SWOT provides only limited information. This business grew by double SWOT methodology: a state-of-the-art review for the past, a framework for the future. In Software Engineering Research, Management and Applications, 2008. Stock Advisor launched in February of 2002. Lastly, IBM is licensing out its designs for semiconductor chips, servers, and software to tech firms in emerging markets like China. Moreover, IBM’s high-priced lease strategy, supported by excellent customer support, enhances the company’s fortunes. Large businesses are heavily dependent on IBM's mainframes, services, and software, but they are all fairly expensive compared to solutions for smaller businesses. Improvement in the customers- lifestyle and standards mean more consumption on consumer goods and services, and more opportunities to encourage the purchase. Last quarter, revenue at all five of IBM's main business units -- Global Technology Services, Global Business Services, Software, Systems Hardware, and Global Financing -- declined annually, contributing to its companywide 12% top-line decline. Marketing Teacher, 2000-2010. SWOT analysis: it's time for a product recall. The detailed SWOT analysis can help the IBM to exploit the opportunities by leveraging internal strengths quicker than competitors. IBM SWOT analysis. Last year, it invested $1 billion to launch a dedicated business unit, for Watson, its data-processing AI platform. Let our expert writers work on your assignments and essays, Based on 9,214 Reviews, Policies Inability to comply with changed regulations raises the risk of expensive law suits. Huge client base which is loyal towards the services of IBM 4. So let's do a basic SWOT (strengths, weakness, opportunities, and threats) analysis of IBM to determine its business prospects. AMAZON.COM SWOT ANALYSIS 2017 2. SWOT Analysis is often one of the first steps in building a Strategic Plan, as it gives you the current state and it can also generate the future goals and areas of focus. Press release - HTF Market Intelligence Consulting Pvt. Last quarter, strategic imperatives revenue, rose 30% year-over-year. High job stress and consequent low workers’ morale makes the workforce less productive. Opportunities of IBM comes into the third column of SWOT matrix. ~ 0.0 Page), (Approximately It makes compliance with legal standards more complex and challenging for the business organisation. The verdictIBM's downside potential is fairly limited, but so is its upside. Besides different opportunities offered by external business environment, the organisation also faces some threats as presented below: The IBM SWOT Analysis requires IBM to differentiate between threats having short-term or long-term implications. IBM's dependence on large businesses is also a double-edged sword. Journal of marketing theory and practice, 9(2), 54-69. Shortage of skilled labour in the market can make it difficult for the organisation to attract talent with the right skills set. Helms, M. M., & Nixon, J. Strengths Last year, it invested $1 billion to launch a dedicated business unit for Watson, its data-processing AI platform. SwotAnalysis IBM - Free download as PDF File (.pdf), Text File (.txt) or read online for free. Sluggish growth in core business units: IBM’s main business units which include Global Technology Services, Global Business Services, Software, Systems Hardware, and Global Financing have been experiencing a decline or flat revenues over the last two to three years from 2015 to 2017. ThreatsThe greatest threat to IBM's future is competition in the cloud. The organisation can draw the criticism from the environmentalists for its poor waste management practices and inability to integrate sustainability in business operations. May 7, 2015 8:30AM EDT IBM is often considered a safe and conservative tech stock, but the company has certainly seen better days. IBM suffered a brand value decline in 2016 over 2015 which was previously $35.428 billion with a decline of $3.642 billion. SWOT Analysis Strengths The strengths of IBM are— 1. IBM has been involved in many technological advances since the earlytwentieth century from tabulating countries’ census reports to sporting event analysis to developingcomputer software and e-business. What is IBM’s Strategic Goal(s)? To grow revenues at least 5% each Formulating Business year To increase earning per share at Strategy Using least 10% SWOT Analysis IBM Case (Solutions) IST 301/ A. Konak 2What is IBM’s Strategic Plan(s)? Returns as of 02/03/2021. The fastest growing part of IBM's cloud business, its "cloud as a service" business, had an annual run rate of $3.8 billion last quarter. The wide product portfolio can allow the organisation to expand the customer base and offset the losses from one product category with benefits obtained from the other. Using strengths to exploit opportunities- SO. 221-228). IEEE. It oversimplifies the process of identifying strengths, weaknesses, opportunities and threats. Microsoft didn't disclose how much revenue came from the Azure cloud service -- which competes directly against AWS and IBM's cloud services -- but Deutsche Bank estimates that the service generates $500 million to $700 million in annual revenues. To keep that growth on track, IBM will invest $4 billion on those businesses throughout this year. What's swot in strategic analysis? Sometimes, it is difficult to recognise the difference between opportunities and threats as the same opportunity can act as a major threat if the firm is unable to exploit it in a timely manner. Terms of Use. It indicates the need to revise the pricing strategy. How To Write A Proposal For A Research Paper? Nonetheless, the stock is fairly cheap at 11 times forward earnings, and it has a decent forward annual dividend yield of 2.7%. Ltd. - Smart Railways Market SWOT Analysis by Key Players: Cisco Systems, Siemens, IBM - published on openPR.com IBM’s strategic choices relate to Porter’s generic strategies and pertain to the computing technology business issues identified through the SWOT analysis model. Logo Industries served • Internet, Amazon Web Services, Amazon Video) • Retail (Amazon Marketplace, Amazon Prime • Consumer Electronics (Amazon Kindle, Fire HD, Fire TV, Amazon Echo) Geographic areas served Worldwide Headquarters Seattle, Washington U.S. Current … Its stock has fallen 9% over the past 12 months, dramatically underperforming the S&P 500's 12% gain. The cash shortage or insufficient current assets negatively affect the liquidity position and harms the overall business performance. The inability to understand customers’ needs and expectations lead to an ineffective strategic decision-making process. Microsoft's (NASDAQ:MSFT) commercial cloud revenue rose 106% annually with an annual run rate of $3.8 billion last quarter. On the bright side, IBM's investments in strategic imperatives have expanded its business into interesting new areas. Valentin, E. K. (2001). Improvement strategies for agile processes: a SWOT analysis approach. Reducing weaknesses to exploit opportunities- WO. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. The weight assigning allows IBM to determine which areas need to be focused, which areas can be avoided for short-term and which areas can be avoided for long-term due to low importance. Ravanavar, G. M., & Charantimath, P. M. (2012). The emergence of new market segments and new niches provide business and product line expansion opportunities. Previously, it had a brand value … | Recognising and understanding these limitations can further improve the strategic decision-making process. The SWOT analysis does not offer solutions or provide alternative strategies. Organisational culture also becomes a big internal weakness when it does not align with the strategic/business objectives. IBM can adapt and control its strengths and weaknesses (internal factors), but it cannot control the external factors (opportunities and threats): IBM can use the SWOT matrix to exploit the opportunities and minimise the threats by leveraging its strengths and overcoming its weaknesses. Last quarter, strategic imperatives revenue rose 30% year-over-year. Strengths Strengths Leads the world in Swot Analysis Of Ibm And Ibm 971 Words | 4 Pages. This can be used by IBM, and will involve the identification of its internal Strengths (S) and Weaknesses (W) followed by the identification of the Opportunities (O) and Threats (T) it faces in its extensivelyrnal business environment. IBM has involved disputes and litigations continually from time to time. IBM SWOT Analysis By Austin.M What the company does What the company does IBM mostly sells software and does consulting for other companies. Strategic Change, 7(2), 101-109. The identification of strengths, weaknesses, opportunities and threats generates a bulk of information which may only be useful to a limited extent. Those services and others could derail IBM's optimistic growth forecasts for its strategic imperatives. Revenue from those businesses climbed 16% annually last year and accounted for 27% of IBM's top-line. SWOT analysis is a subjective approach, and there is no standardised way to conduct the analysis. Strategic formulation using tows matrix–A Case Study. The internal environmental analysis can help an organisation to identify its core strengths and weaknesses. But there exists a risk averse attitude prevailing in organisational culture, which discourages employees from thinking creatively. (2009). Example of SWOT Analysis made by the US Department of Agriculture While SWOT’s effectiveness has been questioned, it remains a popular assessment tool that provides information on internal and external strong and weak points (Helms and Nixon 216-217). SERA'08. Opportunities 1. Whereas, external environmental analysis can help the organisation to identify opportunities and threats that must be considered to ensure long-term business survival. CEO Ginni Rometty referred to those revenues as "empty calories," but without them, IBM's top-line growth will remain weak. Less expenditure on the research and development activities can weaken the company performance due to poor local/international market knowledge. Earlier this year, IBM established a new Internet of Things (IoT) unit, pledging to invest $3 billion in the business over the next four years. Threats of IBM comes into the fourth column of the SWOT matrix. With this weakness, the organisation may not be able to identify the potential improvement seeking areas in product/service mix. IBM. Rometty believes that the unit. As an effect, businesses with a high brand image can attain sustainable growth in existing and new markets (Minocha & Singh, 2016). Sarsby, A. IBM's revenue growth has stalled due to weak client spending, sluggish demand in the software sector, a strong dollar eating up its overseas revenues, and divestments of lower margin businesses. Some examples of internal factors (strengths/weaknesses) are- leadership competencies, intellectual property rights, locational advantages and geographic presence. SWOT: IBM, Business Intelligence and Analytics, Worldwide Published: 05 October 2012 ID: G00219520 Analyst(s): John Hagerty, Dan Sommer Summary Analytics is a strategic imperative for IBM, and the company views it as one of its pillars of growth. Market data powered by FactSet and Web Financial Group. Threats with immediate implications need to be addressed on a priority basis to avoid any possible harm. (2007). High product quality increases brand loyalty and improves IBM's performance in a competitive market. Access to the suppliers that offer raw material at a lower cost can improve the overall business efficiency. Lulu. IBM SWOT 1. Strong financial position and health can allow the firm to make further investments. Weighted approach to IBM SWOT Analysis is used to assign weights after identifying strengths, weaknesses, opportunities and threats.