Blog 2
As stated in Blog 1 IBM has been granted the most patents for any company for 23 straight years. So they have had no problem innovating. They do however face an immense challenge of innovating in the right fields or to specific customer segments to keep up with the always changing Information Technology field.
Competition: The technology industry is constantly advancing onto new and improved products. Because of this, IBM has a challenging time keeping up with its competitors and consistently innovating the newest technology. Some of their older competitors are Oracle Corporation and Dell while some of their newer competitors are Apple Inc and Google. Each of these companies compete with IBM in different areas. Oracle is a Multibillion dollar software company where Dell is also a Multibillion dollar company specializing in computers. Apple and Google are Multibillion companies who compete with IBM more along the lines of storage space, which is know as the cloud. Due to the cloud, IBM can potentially lose income on selling bigger parts, software, and services. The cloud is easily accessible and brand new to the market making it more exciting. All of these firms compete with IBM worldwide in a highly competitive market. IBM has a 174% debt to equity ratio in comparison to companies such as Apple or Oracle who have a ratio of 49% and 91%. It’s very problematic for IBM to have that high of a ratio in comparison to its competitors.
Info retrieved from:
https://ycharts.com/companies/ORCL/debt_equity_ratio
Company: IBM as a company has an abundance of knowledge in the industry because they have been in the industry for so many years. They have recently tried to innovate a system named, Watson. Strength: Overall, their products have been reliable and made of higher quality materials. With a global reach IBM products and services are found worldwide. Weakness: Many of IBM’s competitors listed above are aggressive in revolutionizing newer products at all times which can be tough to keep up. Along the same lines as above, their products are incredibly pricey perhaps leading to more of a supply and less in demand. The global economy has a huge impact on the outcome of IBM’s decisions. IBM is a company that is highly leveraged. They heavily rely on investments. This can potentially be harmful when the investments don’t pan out. On the other hand if these investments do happen to be successful IBM can benefit greatly. IBM focuses on mainly customized products which can limit the use of these products to those that asked for them. They don’t look at producing a product that can satisfy the needs of a large population.
Collaborators: Various outside companies may in fact be assisting IBM by constantly changing the industry. They are challenging IBM to produce the newest and best products which in turn is helping them stay afloat. Some specific examples are Microsoft, Google, and Amazon. An example of this is in cloud computing. Google and Amazon began offering cloud computing for free to customers. Microsoft closely followed with some of its products. IBM has been credited as being the innovators of the cloud, but many of its services were directly business to business or Software as a Service(SaaS). To compete with companies like Google IBM acquired SoftLayer and Cloudant. IBM knew they were behind in cloud services so instead of innovating themselves they used their capital to buy into the service.
As mentioned in the previous blog, IBM provides to a number of industries from the government to healthcare. Having such a broad spectrum of customers requires the ability to adapt and provide the needs of each industry. I would argue that IBM collaborates with its customers in order to meet their needs. Since IBM focuses more on business to business, they aren’t trying to provide a product that meets the needs of the majority. They look at each individual industry, analyze their specific requirements and make a product that can best be utilized within the company.
IBM uses programmers to help build, maintain and service their software products. Since software is a large portion of IBM’s business I thought it important to name them as a main contributor. Programmers are instrumental to IBM because of the simple fact that they are a technology based company. Anything that involves software technology requires an extensive knowledge of programming. These programmers write code which the computer translates into actions that it must execute. Programming requires a lot of time and patience. As new methods of programming are released it important to be able to adapt to the change.
Context: When providing context for a mega corporation like IBM many factors must be accounted for. Examples of these contextual factors include how IBM is affected by oil prices, rapidly advancing technologies, cultural differences in emerging markets and social changes within established markets. Another contextual factor that needs to be addressed is how legal decisions in both the United States and globally affect IBM. The most important contextual question/factor when looking at IBM is how healthy is the global economy. IBM takes the global markets very seriously. An example of this commitment can be perceived by what former CEO Sam Palmisano’s top goal for 2015 was: doubling earnings per share. My opinion is that IBMs CFO’s are actually too focused on their stock and market value. Rather than how their products and services are performing. In the past decade IBM has taken an image hit. This is a contextual issue because clients and the general public see IBM is outdated and inefficient whereas other tech firms are thought of as innovative and progressive. IBM has to hurdle a multitude of issues in the coming years if they want to stay atop the global technology business.
http://www.forbes.com/sites/stevedenning/2014/05/30/why-ibm-is-in-decline/#35e1190a4c53
