Case Study About Ibm

new competitors and they will tend to copy the ideas of products and try to dominate the

IBM is a 400,000 strong employee organization working with clients in 170 countries thus making it the biggest consulting and technology corporation in the world (IBM Facebook, 2014)

Question 1: Decompose IBM’s ROE and discuss the factors (and trends) that contribute to Big Blue’s profitability.

Apple Inc. started off as a small computer company and rose to prominence over the following years. They faced great challenges and obstacles to evolve and become one of the top notch corporations today. Having a great CEO, Steve Jobs, is credited for the success of Apple. Under the leadership of Steve Jobs, Apple was able to innovate industry changing technology.

As IBM undergoes this transition its financial reports have been lackluster – to the short-term investor. The company’s growth-per-share from 2010 to 2013 was far below the S&P 500. A financial ratios analysis indicates that IBM’s short-term position is not ideal for short-term investments. However, the company’s debt-to-equity ratio indicates that it is poised to weather challenging times. Moreover, IBM’s long history of innovation (the company is among the top recipients of U.S. patents each year) means the company is very likely to invent disruptive technologies that give the company competitive advantage.

IBM is recognized as one of the most successful computer companies and is considered the pioneer of early computing. Over the past decade IBM has shifted from the saturated market of personal computers to full business solutions. Today IBM is a multinational technology and consulting corporation. IBM manufactures and sells computer hardware and software and offers infrastructure, hosting and consulting in areas ranging from mainframe computers to nanotechnology. Fortune Magazine ranked IBM the second largest employer in the United States with over 435,000 employees worldwide and the ninth most profitable company. IBM’s employees have received five Nobels Prizes, six Turing Awards, ten National Medals of Technology and five National Medals of Science. The automated tellar machine, floppy disc, hard disk drive, and the magnetic stripe card were all invented by IBM. As large and successful as IBM is, it would have never come to exist had it not been for one man. Thomas J Watson was the first of it’s guiding lights and is generally considered to be the father of IBM.

IBM was founded in 1911. IBM (International Business Machines) is by far the world's largest information technology company in terms of revenue ($88 billion in 2000) and by most other measures, a position it has held for about the past 50 years. IBM products include hardware and software for a line of business servers, storage products, custom-designed microchips, and application software. ("What is IBM (International Business Machines)? - Definition from WhatIs.com," n.d.)

The threat of substitutes being strong and the large amount of competitors offering relatively undifferentiated products makes it difficult for industry members to make attractive profits

IBM needs to grow revenue and stay competitive in the dynamically changing computer marketplace of the 1990’s by maintaining technological leadership and accepting the organizational transformation which needs to be undertaken for them to excel. IBM needs to recapture their previously held powerful position in the personal computer and microprocessor markets and regain value in the company which will increase its stock value and competitive advantage in the marketplace.

IBM holds more patents than any other U.S.-based technology company, and has nine research laboratories worldwide. Its employees have garnered five Nobel Prizes, six Turing Awards, nine National Medals of Technology, and five National Medals of Science. Famous inventions by IBM include the automated teller machine (ATM), the floppy disk, the hard disk drive, the magnetic stripe card, the relational database, the Universal Product Code (UPC), the financial swap, SABRE airline reservation system, DRAM,

Next disadvantage is that market pioneers will face market and technology uncertainties, which is a primary reason of failure for startups. Lastly, a shift in customer’s needs is required in order to create demand for the market pioneer’s new product or

The main issue that IBM was facing was its highly qualified and motivated workforce could not provide the global flexibility to serve the

Prior to their cultural change that took place in the early 1990’s, many would have said that IBM was on a fatal downhill slide. At this point they were beginning to become obsolete. IBM at one point was among the leaders within the world for hardware/software development and information technology services, but all divisions within the organization were run independently from one another. They were not a unified enterprise. To solidify this even further, “rather than working together as a team, divisions competed against each other both internally and in the field” (DiCarlo, L., 2002).

In its infancy, Apple Computer Inc. began with the Macintosh personal computer. The company was founded on April 1, 1976. The founders were Steve Wozniak and Steven Jobs. They incorporated the company in 1977, on January 3rd, in Cupertino, California. In the twenty years that followed, the company produced personal computers. Besides the Macintosh, Apple Inc. made Apple II, and the Power Mac lines. Although they lasted for decades, during the 90’s the company experienced some turbulent times with low sales and market share. Steve Jobs left Apple Inc. and came back in 1996 when his company, NeXT was purchased by Apple. In 1997, Jobs became the interim CEO. In later years it became a permanent position for him.

It has constantly outperformed its competitors and has generated higher returns. IBM should continue to be a leader in differentiation by offering product and services through its constant strive of innovation. It should follow unique practices to maintain a strong culture and positively impact customer experiences. It should be open to change and blend itself to the environment adding its own stroke of colour (introducing new technologies according to the changing