Ibm : A Competitive Advantage

In the seven years (since 1994), that Lou Gerstner reigned over IBM, the company’s earnings per

IBM invests 6% of its revenue, $6.3 billion every year in Research & Development, standing at 16th position among the 20 most innovative companies in the world. (IBM Facebook, 2014)

Factors and trends that made a significant contribution to Big Blue’s profitability can include revenues, cash flow, gross margins and earnings per share (EPS). When discussing the company’s revenue growth, we can see that the company’s lowest point in their first fiscal quarter in 1997 was at $17,308,000.00. Afterwards, the firm’s

For decades the digital war between Macintoshes (Macs) and Personal Computers (PCs) has been a never ending struggle to see who ranks the better competition. Because Microsoft has dominated the software field, more and more businesses use PCs rather than Macs. But does that make the PC better than the Mac. Let 's take a trip back in time and review the evolution of a computer company. It 's not IBM or Microsoft. This company is Apple Computers, Incorporated.

IBM is among the oldest of the Fortune 500 companies with operations all over the world. The company is renowned for its capacity to transform careers and deliver innovative technologies and business solutions. Over the past decade IBM has undergone a transformation of its own as it shifts from hardware development to cloud computing and business consulting. The company sees this niche market as having huge potential to carry it forward into the ensuing decades.

In modern-day society the use of technology, such as computers, is inevitable. The big guys today are Apple, Acer and Dell. They all produce the same kind of product, but each offer a different value. Apple, for example, offers the value of quality, customs, standards, and principles in which the company believes. They present us the basis for what we do and how we do our everyday tasks. Apple is identified as an unique company. The Acer Group promises the value of being innovative, fast and effective. Dell is demonstrating its values through corporate citizenship. They all play an important role in the technological environment.

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 had barely escaped the misfortune of being broken up and sold in pieces thanks largely to the leadership, drive and determination of Lou Gerstner. In keeping the company intact, he had preserved the inherent differentiating capability that IBM had at that time, which was as an end-to-end complex technical

* In 1985, Compaq and IBM do a research and development (R&D) and make move Apple into the mainstream by becoming low-cost producer and joint venture with IBM. This’s one of Apple failure moment and Apple Gross margin drop to 34%.

IBM Market Leader in Mainframe –market share 61%, starts PC business in ’81, in 2 yrs market share is 42%

The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996 (Kim & Yoffie, 2010, p.1). This can be explained that Apple has become larger and more significant than other competitors put together in 1980. Because Apple failed to innovate in 1996, the company almost went bankruptcy but eventually Steve Jobs took Apple from bad situation to the company that can make billions of dollars through promoted itself as a hip alternative to other computer brands. Apple highlighted its computers as the world’s “greenest lineup of notebooks” that were energy efficient and used recyclable materials. The goal was to differentiate the Macintosh amid intense competition in the PC industry (Kim & Yoffie, p.4).

Thirty-three years ago, the founder of Lenovo founded the company with only 33,231 USD (converted from 20,000 CNY). 2 Nevertheless, Lenovo has become one of the Fortune 500 companies, and it is one of the largest PC manufacturers in the world, with a more than 20% market share, and around 43 billion revenues in 2016. 3 Over the past three decades, Lenovo has implemented numerous strategies to achieve such accomplishments. Since multinational enterprises often involve in

Founded in June 1911, IBM has always been a leading company in the technology industry and at the forefront of innovation. It is a manufacturer of computer hardware and software, and also provides infrastructure, hosting and consulting services. Before the 2000s, IBM was the largest PC vendor in the world. However, the hardware sales have continually declined since 2000, and IBM sold its PC group to Lenovo in 2004, as well as its x86 Server Business in 2014. In the new era of the technology industry, IBM has faced the challenge to transit from a hardware manufacturer to a service company.

Both Dell and HP are two strong players in PC industry which refers to an industry where companies produces PCs (desktops and notebooks), handheld devices (smart phones and tablets), and workstations. However, with growing global expansion, Dell and HP’s performance differs. Dell, once the world’s largest PC maker in 2001, has continually lost its market share to HP and Acer since 2007 (Guglielmo 2009). The cause is rooted in two differences of these companies: company diversifications and core competences. Therefore, how firms can continually survive in the PC business is more of an issue for Dell than for HP.

Apple operates with fierce competition in the consumer electronics segment which comes in many different forms. There are a large number of competitors in the different market niches who offer many similar products. Furthermore, many of these competitors' products are priced much less than an Apple branded products. Just as soon as Apple releases a new product, major companies begin imitating it immediately. In the personal computer industry, market pressure is continuously being exerted from such companies such as IBM, Dell, HP, and Toshiba (Wildstrom, 2009). Furthermore, with its flagship product the IPhone, Apple competes with companies like HTC, Palm, Blackberry, and Motorola (Wortham, 2011). Apple has had significant success despite the competitive environment because Apple commands a brand loyalty and dedication to innovation that few companies have ever achieved.