Keys to the recent success of IBM and its plans to solve the world’s most challenging problems
The experience of IBM shows that its “ups” were typically the result of a grand innovation (for example, the first personal computer), which was guided by a successful visionary CEO (Kotler 344). Kotler shows that the CEO, who took up the management in the 21 century, modified IBM’s vision and strategy to correspond to the current situation by shifting it towards software rather than hardware and focusing on the “most challenging high-tech problems” (345).
Both these actions may have been risky, but according to Kottler, they paid off. As for the solution of the most challenging problems, IBM is unlikely to resolve them soon, but it is capable of contributing to their solution greatly. Indeed, according to Kotler, the company has all the necessary resources, including finances, technology, and research and development advancement (345). Therefore, IBM’s vision corresponds to the idea of a vision: it is challenging, “almost impossible,” but it works to achieve it will bring tangible results (Kotler 38).
IBM’s biggest competitors today and risks they face with their current strategy
While IBM began as a monopolist, in the 1980s, the monopoly ended (Kotler 344). Back then the company was primarily concerned with Compaq and Dell as Microsoft and Intel were growing into competitors. Nowadays, the situation appears to be similar, and IBM has to take into account the multiple competitors in the field. Apart from that, companies like Accenture PLC, HP Enterprise Services, LLC, and Wipro Limited should also be regarded as competitors (“IBM” par. 2).
From the point of view of the strategy, it is noteworthy that the movement from hardware to software is a more or less established tendency: it appears to correspond to modern IT trends (Barinka par. 2). Apart from that, it is typical for IT companies to rely on research and development and innovation. Such a strategy is reasonable in the modern conditions of constant change, but innovative activities are risky by nature. However, IT companies do not have the option not to innovate nowadays: the threats coming from their competitors would not allow it, and innovation is a necessity rather than just an advantage (Murray par. 6).
IBM SWOT analysis
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). The strengths of IBM are numerous, and the first one is its age (Kotler 344). After existing for almost 150 years, the company has grown (the advantage of the size), gained experience and reputation, and created (and re-created) its image. The fact that it was solidified by the previous manager is also likely to be an advantage given the results it yielded (Kotler 344-345). Still, IBM’s greatest strength is its focus on innovation, for example, the modern cloud technology (“About IBM” par. 3; Barinka par. 2; Kotler 345).
This strength is particularly important in the face of the threats. The latter include the competition and the fact that nowadays the rate of technological development tends to turn technologies outdated very fast (Barinka par. 3). It is also noteworthy that, according to the United Nations, the world’s economy has not recovered from the crisis of 2008, and the current geopolitical tensions and oil prices plunge are not helping to rectify the situation (6). The current “sluggish” growth of the world’s economy can be regarded as a threat as well (United Nations 6).
The weaknesses of IBM include primarily the focus on high-end and, therefore, rather expensive products and services. As for the opportunities, they include the emerging markets as the technological development spreads in developing countries, but the company’s weakness may hinder this scenario. The company’s strengths, though, support the possibility of innovative products and services development.
Works Cited
“About IBM.” IBM. N.d. Web.
Barinka, Alex. “IBM Joins SAP in Cloud Deal to Take on New Competitors.” Bloomberg Business. 2014. Web.
Helms, Marilyn M., and Judy Nixon. “Exploring SWOT Analysis – Where Are We Now?”. Journal of Strategy and Management 3.3 (2010): 215-251. Emerald. Web.
Kotler, Philip, and Kevin Lane Keller. Marketing Management. 14th ed. 2012. Upper Saddle River, New Jersey: Prentice Hall. Print. Web.
“IBM.” Hoover’s. Hoover’s Inc, 2016. Web.
Murray, Alan. “50 Most Innovative Companies.” Fortune. 2015. Web.
United Nations. World Economic Situation and Prospects 2015. UN, 2015. Web.