Business Model Development through Corporate Strategy Design: IBM SWOT Analysis

The research tries to understand the ongoing process in products and services offered by technology giant IBM. Using extensive secondary research and text mining as a primary approach to collect information to the current portfolio of IBM, multiple corporate strategies are designed. SWOT analysis is used as an extensive tool to take step by step approach in understanding the opportunities that exists in the general environment. At the same time SWOT also helps to understand the strengths that IBM can exploit through value chain analysis and how the internal core competencies produce a fit in IBM’s operational activities.

Overall the study is strongly qualitative in nature and explores multiple avenues that a techno-functional company can implement to penetrate and gain greater market share. Keywords: SWOT analysis, Value chain analysis, core competencies, Porter’s five forces, VRIN analysis. Introduction IBM was founded in 1911 as CTR initially with the aim of developing hardware and software components for computers. IBM’s mission is to develop technology in efficient way and deliver it to the customer for greater satisfaction. Overall IBM tries to create value through its product.

? IBM’s main domain is IT and its business varies from hardware to software development. ? As shown in figure IBM has many functions through which it delivers and creates value. Electronic copy available at: http://ssrn. com/abstract=2367123 In 2012 IBM was ranked no 2 in terms of employee, no 4 in market capitalization1 , and no 9 most profitable2 . General Environment Trade- New open markets and new trade regulations have opened market for consumer electronic goods all over the globe. This initiative has helped

many overseas companies to launch and sale products to different countries. Exchange rate/ Pricing- Pricing flexibility with the exchange rate fluctuations has helped many companies to launch their products in different countries with a reasonable price tag. ? Outsourcing- In recent times outsourcing has become a big source to cost cutting. Out sourcing has opened opportunities for IT consulting companies. Many companies prefer to outsource their in house software development project to other companies to save money on tax, benefits, and employee insurance.

Economies of scale- With outsourcing the concept of reducing the costs using economies of scale have grown up. Fixed capital is eliminated using contract staffing and increasing the amount of production. Labor laws- Stagnation in labor law has resulted in more leniency in work culture. Work culture has become friendly as companies try to find out more ways of getting employees involved in various forms of work. Leadership and managerial skills are assorted from these programs. Immigration- New immigrations have made it easy to recruit talent from other parts of the globe.

Many engineers and managers are recruited with different backgrounds this increases their skill set. Political support- Boom in IT industry has brought into the notice of the government the increasing revenue and employment in this sector. Many governments of different countries have opened their hands for new ventures in IT. Tax perks and infrastructure support have been the important agenda of such support. Patent- Patents for new technology in recent years has been a strong supporter for increasing investment in research and development of technology.

Patents safe guard a company’s interest in developing new technology. Technology- Cost saving and increasing dependency of automation has given rise of new technology. More and more sophisticated software are required to run on such automation. ? Sustainability- Energy conservation and saving trees through less consumption of paper has become a big motto in today’s corporate culture. Use of simplified software to save and store data has become a string priority today.

This has opened up market for many new companies to launch many new applications. Diversity- Diversified work culture with multinational candidates have proved to increase the efficiency of the operations and services provided by any company. With changes in immigration reform it is easy to recruit more talent from outside with required skillset. ? Education- Increase in the education standards and increase in number of enrollments in STEM group has increased the availability of people with expert skill set.

This has provided companies with enough amount of man power to achieve complicated targets. ? Aging population- With the increase in retirements the requirement of personal computers and laptops have increased which is increasing the market size of personal computers. ? Work from home- Work from home has also increased the use of personal computers as well as the use of software applications. Home grown business have proved to be a new opening for the IT industry.