STRATEGIES RE-DEFINED BY “ BIG BLUE ”

CONTENT

1. History

2. Previous Strategy

3. New Corporate level Strategy

4. New Business level Strategy

5. Functional Strategy.

HISTORY OF IBM

International Business Machines abbreviated IBM and nicknamed as “ BIG BLUE ” is a multinational computer technology and IT consulting corporation headquartered in Armonk, New York ,United States.

IBM manufactures and sells computer hardware and software and also offers infrastructure services and consulting services in the areas ranging from mainframe to nanotechnology .

Samuel J Palmisano is the Chairman andCEO of IBM.

PREVIOUS STARTEGIES OF IBM

OBJECTIVES THEY WERE FOCUSSING ?

1. They were mainly focussing on the hardware side of the computer industry that is maily on the mainframe or Personal PC’s.

2. But when the Internet Began to take off in the mid 1990’s they started focussing on the server and related equivalent’s.

WHERE THEY WERE FOCUSSING

Basically they were targeting customers for hardware of large organization because :

They require greater data processing capacity and

Have financial resources to afford it

WHY IBM WAS GAINING COMPETITIVE ADVANTAGE

QUALITY DIFFERENTIATION STARTEGY

IBM followed “ quality differentiation strategy ” as their competitive advantage by offering superior products backed by excellent technical service and selling them at premium price.

RECOURSE DEPLOYMENT

To fulfill this strategy and for it’s implementation firm allocated vast resources to R & D .

OPEN ARCHITECTURE POLICY

IBM also followed open architecture policy. According to this policy the firm licensed it’s PC-DOS to other manufacturers , which helped to expand the number of PC-DOS users.

ADVANTAGES

1. Increase in number of PC-DOS users.

2. Helping to provide incentives for IBM license to develop more innovative application software

3. Improve the value of hardware among their customers.

MARKETING STRATEGY FOLLOWED BY IBM

IBM maintained budgets for advertising and promotions to keep their customers up to date for new product line.

NEW STRATEGY

CORPORATE STRATEGY

CORPORATE GOALS AND STARTEGY :

The new corporate level strategy of IBM was to become one of the leading e-business service providers and to develop e-commerce engineering , software and consulting services.

STEPS TAKEN FOR THE DEVELOPEMNT OF THE STRATEGY

1. Following are the steps that were taken at a corporate level :

2. De-emphasizing the manufacture of high tech hardware.

3. Increase emphasize on providing customers e-business engineering ,design and service.

4. Converting old databases to new online system.

5. Improving efficiency by introducing web technology into their internal business.

6. Developing companies web site.

7. They focussed on services and software packages tailoring the needs of specific industries. i.e, banks .

BUSINESS STRATEGY

PREVIOUS BUSINESS UNIT OBJECTIVE :

Previous firm differentiated itself from the competitors on the basis of superior quality and charging premium price for it’s quality.

CONTD….NEW BUSINESS UNIT OBJECTIVE :

1. But in new business strategy this competitive superiority depends on knowledge , experience and expertise for it’s consultants. For this they :

2. Re organize and re-allocated their internal resources.

3. Half of the company budget is allocated to solve business problems rather than improving technical performance of the hardware.

STRENGTH OF THE NEW BUSINESS STRATEGY

1. Knowledge and expertise of it’s personnel.

2. Ability to develop beneficial relationship with customers.

3. Training of their sales persons by utilizing sufficient resources.

4. Able to gain market share against competitors like ORACLE,SUN, in nearly every service and software package.

Functional Strategy at IBM

There are various functional areas at IBM such as:-

Customer Relationship Management

Financial Management

Human Capital Management

Supply Chain Management

Customer Relationship Management

IBM consultants truly make an impact, helping

clients to integrate their sales, marketing and

customer service functions, and improve sales

performance across all channels.

They partner with companies to improve

customer loyalty and satisfaction, while reducing

the costs associated with marketing, sales and

service.

Financial Management

IBM work with clients to design and implement finance and

accounting business transformation, process improvement and

technology solutions across the enterprise.

IBM help companies address the changing role of finance, better

manage capital and profits, increase visibility of financial

information, and maximise benefits of technology.

Human Capital Management

Human Capital Management (HCM) practice helps the clients

create a responsive workplace and best-in-class HR function

while aligning performance with strategic goals.

IBM deliver strategy, operations, process, technology and

outsourcing to help clients get the best from and for their

people.

Supply Chain Management

SCM people work in cross-functional teams to analyse every

phase of the supply chain, from design to source to plan to build

to distribute, in order to maximise performance and drive

competitiveness for our clients.