Competitor Profile Template
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Transcript of Competitor Profile Template
Competitor Analysis Template
Contents
• Executive Summary
• Company At a Glance− Quick facts about the company;
Latest financials− Financials by operating units,
geography, verticals, etc− Management
Structure/Organization Structure (BU Org)
− Competitive Landscape/Business mapping
− Competitive Market Position − Key Updates
• Strategic Analysis− Competitor’s Evolution − Objectives, Implementation, Plans− Major Strategic Shift*− Go To Market− Mergers and Acquisitions− Partnerships and Alliances*− SWOT: Overall; Region Specific;
Customer Group Specific (SMB / Enterprise); Vertical Specific; Product/BU specific2April 10,
2023
• BU-wise Analysis (in detail)− Quick View; key Financials− Strategic significance− Product/Service Offerings − GTM− Positioning Maps for key/strategic
products/offerings− Competitive Comparison− Analysts Comments− Outlook for the BU
• Comparative Performance (company peer comparison)
− Key Financials: Vertical wise; Customer Group wise; Geography wise
− Key Performance Indicators’ Comparison
− Versus Company• Analyst Comments• Competitor Outlook• Key Takeaways/Recommendations• Backup Slides
Executive Summary (I)
3April 10, 2023
A. Business OverviewOne of the global IT leaders, IBM operates in major business segments of IT hardware (STG), software, services and solutions (IGS) as well as provides financing to its customers (GF)• IGS is the major contributor to revenue (53%) and contributes to 37% of pre-tax
profits• Software is the fastest growing and most profitable business group in IBM with
revenue contribution of 20% and pre-tax profit contribution of 40%• After a drop in revenue in 2005, with the divestment of its PC division, IBM saw a
marginal increase in revenue in 2006 of 0.3%
Also, IBM has significant presence across the IT value chain, globally – right from research and design to loan and lease financing customer and partner purchases; as such is faced with myriad pressures from different competitors, customers, channels, etc
B. Major Trends
Among the major trends facing IBM are:• Demand for standardized products overtaking demand for leading tech,
customized products• Growth of SMB• Demand for vertical focused products, services and solutions • Demand growth from emerging markets• Also increase in competition from emerging markets• As compared to its peers, IBM is facing the pressure of low rate of revenue growth
XYZ Corp.At a Glance
XYZ Corp. Competitor Overview
Latest Financials – Q406
$81.2 $89.1 $96.3 $91.1 $91.4
9.7%8.1%
(5.4%)
0.3%
$70
$75
$80
$85
$90
$95
$100
2002 2003 2004 2005 2006
-10%
0%
10%
20%Revenue Growth Y/Y
29.732.5
35.5 36.5 38.3
3.2 1.7 2.0 2.2 3.5
13.3%
21.3%
10.5%
46.6%
7.6%
0
5
10
15
20
25
30
35
40
45
2002 2003 2004 2005 2006
0%
40%
80%Gross Profit Net Income Growth
Net Profit ($B) & Y/Y Growth (%)
Revenue ($B) & Y/Y Growth (%)
Quick Facts
One of the top 3 global IT players
HQ: Armonk, New York, United States
Employees: 330,000
Portfolio: Mainframes, servers, storage, peripherals, IT services, software, microelectronics
Sales Channel: Own sales force and one of the largest partner network
R&D: 6.0% of sales
Competition: H-P, EDS, Microsoft, Accenture, Fujitsu, Sun, NetApp
Presence: Global – in more than 150 countries
Management: Samuel Palmisano – CEO & Chairman; Mark Loughridge - CFO; J Bruce Harreld – Marketing SVP
Performance:
XYZ Corp. Revenue by Operating Units
49% 53%
28% 25%
20% 19%
2% 3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q405 Q406
Global Financing
Software
Hardware
IGS
Revenue % by Operating Units (Revenue in $B)
$12.0 B
$6.9 B
$4.9 B$0.6 B
Y/Y Growth %
6.4%
4.3%
15.3%
3.3%
• IBM holds strong ground in Services and Software, the biggest chunk of IT spend
• IBM continued to improve its software portfolio as it offers better margins than its hardware or services business
• Besides, IBM’s recent acquisitions in software are also believed to be driving IBM Global Services’ (IGS) Growth, as customers are buying software as a solution that requires support from services
$12.8 B
$7.2 B
$5.7 B$0.6 B
XYZ Corp. Revenue by Geography
43% 43%
34% 35%
18% 18%
5% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q405 Q406
OEM
AP
EMEA
Americas
Revenue % by Geography (Revenue in $B)
$11.2 B
$9.3 B
$4.8 B
$1.1 B
$10.5 B
$8.3 B
$4.5 B
$1.1 B Y/Y Growth %
6.7%
12.0%
6.7%
-
• IBM continues to invest to build capabilities in the BRIC countries to:
– Address fast growing domestic opportunities and
– Enhance IBM’s globally integrated operations• IBM reported strong performance in EMEA with growth coming from Italy, UK and
France• Asia growth was driven by 4Q06 revenue increase in Japan
XYZ Corp. Revenue by Vertical
28% 29%
16% 14%
12% 12%
9% 10%
10% 10%
18% 19%
5% 4%2% 3%
0%
20%
40%
60%
80%
100%
Q405 Q406
Other
OEM
SMB
Communications
Distribution
Industrial
Public
Financial Services
Revenue % by Vertical
• Financial and SMB companies make up a large chunk of total IBM revenue
• IBM sees SMB as an attractive market and is adopting various initiatives to increase its presence in the segment
Y/Y Growth %
4.2%
8.9%
-
24.7%
10.3%
-
6.7%
13.0%
XYZ Corp. Management Structure
Paul M.HornSVP;
Director, Research
Appointed recently to form major alliances
Ex Citibank VP and Ex- IBM Head of FSI
Brought on-board in early 2006 to gain
traction in APJ market
Ex-Hewlett-Packard
VP Managed Services, TSG
Brought in this position to give impetus to drive innovation across IBM
Steve MillsSVP; Group Executive, Software
William M.Zeitler
SVP; Group Executive, STG
Virginia M. Rometti
SVP GBS, IGS
Mark LoughridgeSVP & CFO
John E. KelleySVP
Technology & IP
Linda S. Sanford
SVP Enterprise On Demand
Transformation
Robert W. Moffat Jr.
SVP Integrated Operations
J. Bruce Harreld
SVP Mktg & Strategy
Samuel J. PalmisanoChairman
President & CEO
Michael E. Daniels
SVP GTS, IGS
Donny SabahGM, Rational
Doug ElixSVP; Group Executive,
S&D
Nicholas M. Donofrio
EVP, Innovation & Technology
Dave TurekVP, Deep
Computing
Ravi MarwahaGM, Global Business Partners
Kathleen Smith
VP; Emerging Business
Markets, STG
Richard D. Michos
VP, Global SalesSMB Solns &
Services
Richard A. Stomp
VP, Global Telecommunicat
ion Industry
Barry RudolphVP; System
Storage
Linda S. Sanford
SVP Enterprise On Demand
Transformation
Rich LechnerVP,
Virtualization
Steve SolazzoGM, Global SMB
Has returned to IBM from
Lenovo. Hopes to woo back
Lenovo partners to the IBM fold
Mike KozelVP, Global Business Partner
Strategy
Key Stakeholders for Sales
XYZ Corp. Operating Structure
Service Lines- Categorized on the basis of Operating Groups
XYZ is a diversified company but moving toward services and software. Its offerings are categorized under Five operating groups which are further organized into a total of 17 industries.
www.ibm.com
IBM Operating Units
IBM Corp
Software$18.204 B
Hardware$48.247 B
Global Services$22.499 B
Global Financing$2.379 B
Other$0.094 B
TS Server DB
MS Storage Tivoli
BPO Semiconductors Lotus
WebSphere Fastest Growing and
have highest marginsGrowth : “X” %Margin :”Y” %
Growth closely linked with sales of Software
-10%
20%
XYZ Vs. Competitors Business Mapping
Servers Storage PCSemiconductor
s
Printing System
s
Software
IT Service
s
Security
Solutions
Financing
IBM
EDS
XXX
Microsoft
SAP
Oracle
EMC
R R R R R R RRRRRRRR
RR
RRR
R R
Tick signifies the Presence of the Vendor in a Product Segment
Arrow represents movement into or out
of a business area
Have moved out of this business ; Joint venture with Ricoh ; click on the
arrow for details
XYZ Corp. Key Updates
Key facts should be highlighted in text-dominated slides
Date UpdateJan ‘07 IBM announced the creation of a joint printing business with Ricoh which would
eventually control IBM’s entire Printer Systems Division
IBM partnered with LeftHand Networks. The partnership will enable LeftHand Networks’ device management, storage clustering, and remote copy SAN/iQ software capabilities to be installed on IBM System x3650 servers, converting them into a scalable iSCSI storage solution that offers a number of enterprise-class features
Dec ‘06 IBM worked with Panasonic to create a web platform for the company’s Plasma TV customer support program
Nov ‘06 Acquired Palisades Technology Partners to increase portfolio of GTS divisions
Oct ’06 Moved its global procurement division to Shenzhen, China. This is the first time IBM has relocated a division of corporate HQ overseas
Restructured its Services business. It has taken the networking services piece of IGS & turned it into a new business unit, ICS (Integrated Communications Services)
Began detailing a new approach in designing computer processors, with specific features for verticals – the first target being the Financial services vertical
Action buttons links certain key facts between 2 slides
XYZ Corp.Strategic Analysis
XYZ Corp. Evolution
14April 10, 2023
1911
1950
1960
1980
1990
2000
Company established. Early Growth
Growth in Business Computing
Mainframe Phase Unbundling of software and services from hardware Anti-trust litigation Tremendous success with System/360, System/370 series• Mainframe business consolidation• PCs for businesses• IBM lost out to rivals to tap the PC market growth with its focus on
mainframes• Recorded one of the largest loses in its history• Revamped business mix to increase its focus on software & services• Started building software portfolio with Lotus acquisition• Begun increasing its patent portfolio, which helped in tech collaborations Focus on services, especially on consulting arm – acquisition of PwC;
Sold its low margin PC business Also focused on building its high-value chips and hardware technologies Made efforts to align R&D org with its product development group to
improve return on research investment; Majority of research effort was on software
Began focus on SMB and Open Sources markets
Evolution Option I
XYZ Corp. EvolutionFrom a Storage Vendor to an Information Infrastructure Company
15April 10, 2023
1979
Computer Furniture
1981
Supplier of Add-on Memory
boards to Intel and other IT companies
1987
Solid-state Disk Storage System for
Minicomputer
1989
Storage Solutions Supplier
1993
Exclusive focus on Disk Storage
1994
Heavy focus on Software functionality
2002
Open, Platform Independent Storage Consulting Services
2003
Entry into the SMB Market
2007
“One EMC” – Integration of
acquired entities
In-organic growth through
Acquisitions to pursue its ILM
strategy
1991Storage Company
2002 2004Storage & Information
Management
Information Infrastructure
Pure-play Storage Vendor
Information Infrastructure
Company
Evolution Option II
XYZ Corp. Game Plan
16April 10, 2023
Re-design Products & Services Portfolio
From One-stop IT/Computer Technology Player
High-value Add
Innovative
Technology
Provider
Strategic Aim
Key Enablers
Past State
Organizational Changes
Restructuring GTM
Processes
Strategy Option I
XYZ Corp.’s Strategic Objectives
Be a technology leader and attract high value
customers for increased growth and profitability
Create more flexible and agile customer-
centric organizational
processes
To invest in sales and marketing
resources, targeting the faster growing
regions, sectors and technologies
Drive growth through IBM Labs
and Microelectronics’
expertise
Leverage core products and
services in high-value solutions
such as SoA and OnDemand
Acquisitions and Divestitures to drive
focused portfolio and growth
Portfolio
Re-designing internal
and external facing
processes
IBM’s Core Objective
• Investments in high growth geographies; in global sales and delivery channels in software and sales; in software growth through internal skills and acquisitions
• Optimize its resources and processes to increase productivity; improve flexibility and scalability
Establish and maintain
technology leadership at
reduced investments
Strategy Option I
XYZ Corp. Strategy Elaborating Core Competitor Strategies
IGS – Enterprise application
support; SoA
Geographic – BRIC;
Customers - Presence in all IT spend segments
STG – SMB, Technology leadership
Software - SoA
Customers - Presence in all IT spend segments
STG – SMB, Technology leadership
Software - SoA
IGS – Enterprise application
support; SoA
Geographic – BRIC;
Customers - Presence in all IT spend segments
Customers - Presence in all IT spend segments
Objectives
• Increase profitability while sustaining growth
• Be #1 IT company
• Maintain perception of leading-edge technology & services to attract high margin customers
Strategy Option II
XYZ Corp. Strategic ShiftKey Elements Underscoring the Shift
Strategy Earlier Strategy Now
Pro
posi
tion
GTM
Targ
et
Mark
et
Optional
Key take-aways/Implications to :
Use this framework if there has been a significant shift in a company’s strategy
XYZ Corp. Go-To-Market plan
Product Categories
Sales & Distribution channels
Key Alliances and Partners
Key Marketing Initiatives
Key Customer Segments
Product Group 1 Product Group 2 Product Group 3
Direct Sales Force
Enterprise Commercial EntrySMB
Marketing & Sales• Campaign • Market mix modeling• Pricing analysis• Research & Development
Advertising & Sales Promotion• Advertising Channels• Advertising Spend• Sales Promotion Activities
Branding/Positioning• Mission/Vision Statement• Positioning Vs Competitors
Distributors VARS Resellers OEMs
Key Alliances
XYZ Corp Acquisition Roadmap
Driving XYZ Corp. towards Information Infrastructure
XYZ Corp. Strategic Partnerships
• Since 2002; To work on chip-making technologies based on a 22-nanometer and 32-nanometer processes
• Early research on new chip technologies including transistors, chip connection, packing and lithography
• Since 2001 - to work on the Cell microprocessor design, and its underlying SOI (silicon-on-insulator) process technologies in 90 and 65 nanometer
• Now a semiconductor research and development alliance to investigate, identify and commercialize new technologies for consumer and other applications.
• Since 2002; To cooperate on blade system and chassis development, networking infrastructure and comprehensive blade system management solutions
• Later in 2004 agreed to open up their blade server specifications to attract third-party vendors to develop thin computing machines based on their designs• Since 2005; IMS (IP Multimedia Subsystems) focused on IBM blade architecture
• To work on a new class of blades that would meet the specific and demanding data flow, reliability and security needs required by the network equipment marketplace
• IBM, Nortel set up a Joint Development Center, where personnel from both companies can work on this and other select projects
XYZ Corp. Delivery Channels
Objective Targeting customers better, especially the mid market, through SOA partner programs and packaged ‘services offerings’ through channel partners to extend the reach of IGS capabilities More Detail
IBM Corp.
Sales & Marketing Channels
Direct Sales Force
Value Added Resellers
Global Partner Network
OEMS
• Has one of the largest partner communities – more than 90,000 partners worldwide; including over 100 strategic alliance partners such as Cisco, SAP, Red Hat and Novell
• IBM attributes close to $32 billion of its overall $91billion in revenue (about 35%) to its partners
• IBM’s new partner programs are helping the company from being a big and expensive IT provider to being a vendor that offers affordable solutions for SMBs
• Ex: IBM’s Software Value Incentive program rewards partners for each part of the sales cycle to improve partner alignment in deals and improve SMB customer experience
• Ex: PartnerWorld Express Advantage allows IBM partners to link their applications and services with IBM solutions, including IBM’s financing options, and co-market them to the SMB segment
• x
Support Organizations:
Ibm.com, Telemarketing
• Helping IBM reach the SMB market more effectively as compared to the partner channel
XYZ Corp. Corporate SWOT
Strengths Weaknesses
• Leadership• Partner Network• Technology Leadership• Etc.
• GTM• Time to Market• Etc.
Unique Differentiators• Value Prop: “Consolidate, migrate, protect and manage business infrastructure” • Defines SMB as companies as Small (<200 employees ) and Mid (200-3500 employees)• Major Solution offers
−Server, storage consolidation and virtualization−Unix migration; MS Exchange server migration−Business continuity, high availability, security, data archiving for regulatory compliance−Server, storage, client, networking management
• Leverage strength in PC business to drive growth in servers, storage, imaging and printing products
Source :
Covers what sets this company apart from the rest of the players in the industry (and outside the industry as well, if it is a well diversified company)
SWOT Option I
XYZ Corp. Corporate SWOT
• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with
strong focus in software• Acquiring software and services companies to
expand portfolio and market reach • Sells solutions with partners (Oracle, SAP, etc.)• Partnership with Dell-CLARiiON Sales
• Narrow IT consulting experience and geographical reach compared to Services
• Acquisitions creating integration challenges• Cannot provide single vendor “end-to-end”
business infrastructure solutions
• Still widely known as a storage vendor within the enterprise management space
• High reliance on high end mainframe based storage system
• Price pressure and commoditization of HW and Storage.
• IBM acquisitions to impact EMC’s newly formed security initiatives
• With acquisitions spree, EMC could lose market perception as a storage vendor
• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification,
security) provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner
infrastructure• Ability to integrate security software with
hardware offerings to provide secure information across ILM solution
• < ILM + BI -- need copy and validation>
Strengths Weaknesses
ThreatsOpportunities
SWOT Option II
XYZ Corp.’s Strengths
• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with strong
focus in software• Acquiring software and services companies to
expand portfolio and market reach • Sells solutions with partners (Oracle, SAP, etc.)• Partnership with Dell-CLARiiON Sales
• SMB product portfolio designed to be small and focused
• Offering a dedicated website to facilitate and provide tailor-made solutions and support to the SMBs
• Low pricing of products, catering to the price sensitive SMB market
• Sales channel made up of direct (Direct Marketing Resellers) and indirect (Value Added Resellers), catering to SMBs with IT staff (through DMR) and non-IT staff (through VAR)
• Partnership with Dell-CLARiiON Sales
• Excellent storage services and support capabilities for EMC hardware and software
• Strong remote storage problem resolution for EMC hardware
• Server “agnostic” – can place storage solutions in any environment
• Expensive but willing to negotiate to win sale
Corp
ora
teC
ust
om
er
Segm
ent
– (S
MB
)Pro
duct
\ B
U
(Serv
ices)
Vert
ical
Regio
nal
• Leading vendor in Financial Services• High market awareness in MDI and CME
also
• Leader in the high-end external disc storage market in the APeJ region. (APJ)
Optional
27
April 10, 2023
XYZ Corp.’s Weaknesses
• Narrow IT consulting experience and geographical reach compared to Services
• Acquisitions creating integration challenges• Cannot provide single vendor “end-to-end”
business infrastructure solutions
• Still widely known as a storage vendor within the enterprise management space
• Newcomer in the SMB arena – channel expertise for this market not fully developed
• Gaps in the feature set such as NAS and security in the Insignia product line
• Perceived as expensive in the SMB market• Strategy to employ VARs (Value Added Resellers)
and DMRs (Direct Marketing Resellers) may overlap with mutual interests, leading to possible conflicts.
• New range of SMB products not “familiar” to the users in SMB market. Non-IT savvy SMB users may shy away from switching over
• Support structure not flexible; only one real support offering (Global Proactive 24x7 support)
• Global Proactive 24 does not offer proactive account services except for “phone home” capabilities
• 6 hour Call-to-Repair – not offered as a packaged service by EMC
• EMC storage-only hardware and software support• Not able to provide remote monitoring and
management for servers or networks• Limited geographic scope
Corp
ora
te
Regio
nal
• Narrow IT consulting experience and geographical reach compared to Services
• Cannot provide single vendor “end-to-end” business infrastructure solutions.
• Still widely known as a storage vendor within the enterprise mgmt space
• Slowest growing region (APJ)
Cust
om
er
Segm
ent
– (S
MB
)Pro
duct
\ B
U
(Serv
ices)
Vert
ical
Optional
28
April 10, 2023
XYZ Corp.’s Opportunities
• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification, security)
provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner
infrastructure• Ability to integrate security software with hardware
offerings to provide secure information across ILM solution
• < ILM + BI -- need copy and validation>
• Partnership with Intel provides expanded customer and market reach
• Expanding SMB focus by fueling growth through channel partner
Corp
ora
te
Regio
nal
• Marketing broader solution outside of network management space – expanding breadth of offering to compete with Software portfolio.
• Differentiate compliance and governance offerings with ILM focus
• Security has been identified as a Billion $ business in the next 2 – 5 years.
• Expansion plans in India and China (APJ)• Focus on SMB market (APJ)
Vert
ical
Cust
om
er
Segm
ent
– (S
MB
)Pro
duct
\ B
U
(Serv
ices)
Optional
29
April 10, 2023
XYZ Corp.’s Threats
• High reliance on high end mainframe based storage system
• Price pressure and commoditization of HW and Storage.
• IBM acquisitions to impact EMC’s newly formed security initiatives
• With acquisitions spree, EMC could lose market perception as a storage vendor
• Heavy reliance on partners – specifically Dell• Partnership with Dell creates conflict of interest
with EMC Insignia Partners• Dell storage services may lead to customer dis-
satisfaction <may need evidence to support this claim>
Corp
ora
te
Regio
nal
• Open-source (Xen) virtualization software puts VMware’s continued success in jeopardy.
• EMC ILM definition and product mix not widely accepted.
• With the spate of acquisitions ,EMC could be spreading itself too thin with increased risk of the company and sales force losing focus on the core storage business..
• Potential of EMC defocusing SMARTS
• No specific points
Cust
om
er
Segm
ent
– (S
MB
)Pro
duct
\ B
U
(Serv
ices)
Vert
ical
Optional
XYZ Corp. Expectations• IBM expects its Software business to continue to be the strong growth driver
– IBM is expanding its existing software offerings, especially those aimed at business users such as Lotus Connections, Lotus Quickr, Sametime, and WebS ere Portal Express
• IBM expects to gain in server market targeting entry and midrange customer segment with benefits such as consolidation through virtualization
– IBM BladeCenter JS21 Web serving farm server, and System p5 560Q midrange Linux server are examples of product introductions for the target segment
• IBM continues to invest in high value-added business solutions like enhancing their global development center capabilities in India & China to leverage the Webify acquisition & to accelerate SOA
• The first Power6 systems, lower-end models, are due in mid 2007. Power6 is expected to run at 4-5 GHZ with similar power consumption as Power5; an improved memory controller; improved SMT capabilities; a new floating-point engine, etc
• TBR believes that IBM will continue to focus on BRIC as an area of growth for its main businesses of software, services and hardware, including its System z mainframe
• IBM, with the help of AMD, Sony and Toshiba, developed a new material to build a critical part for 45nm transistors. IBM expects this new material will lead to smaller, faster and more efficient chip circuitry than before
• IBM plans to double the performance of its microprocessors in 2008 by using smaller, more efficient memory
– IBM plans to use DRAM instead of SRAM as the embedded memory cache built onto each chip, according to a paper presented at the ISSCC (International Solid State Circuits Conference) trade show in San Francisco
XYZ Corp. Future Outlook
• Text information• Secondary resources analyst opinion or company’s own future plans/expectations
32April 10, 2023
XYZ Corp.BU Analysis
XYZ Corp.BU I overview
Latest Financials – Q406
$81.2 $89.1 $96.3 $91.1 $91.4
9.7%8.1%
(5.4%)
0.3%
$70
$75
$80
$85
$90
$95
$100
2002 2003 2004 2005 2006
-10%
0%
10%
20%Revenue Growth Y/Y
Net Profit ($B) & Y/Y Growth (%)
Revenue ($B) & Y/Y Growth (%)
Quick Facts
One of the top 3 in the global IT Outsourcing
Portfolio: Mainframes, servers, storage, peripherals, IT services, software, microelectronics
Sales Channel: Own sales force and one of the largest partner network
R&D: 6.0% of sales
Competition: H-P, EDS, Microsoft, Accenture, Fujitsu, Sun, NetApp
Presence: Global – in more than 150 countries
Management:
Performance:
29.732.5
35.5 36.5 38.3
3.2 1.7 2.0 2.2 3.5
13.3%
21.3%
10.5%
46.6%
7.6%
0
5
10
15
20
25
30
35
40
45
2002 2003 2004 2005 2006
0%
40%
80%Gross Profit Net Income Growth
BU I Strategic Significance & Goals
Core Strategy Implementation Desired Outcome
Leverage R&D in chip technology to come out with high end business solutions
- Bundling initiatives such as SoA and Information on Demand, which combine hardware, software and services
- Improve sales of more profitable hardware products such as System z and System p
Gain and maintain leadership in Blades market
- Sales and marketing initiatives including open source initiatives to bring out best-in-class solutions
- Capture strong growth in blade systems
Build storage solutions with focus on differentiation through storage management and integration software
- Tie-up with NetApp for mid-range systems
- Capture SMB market
Strategic significance of the BU•Leveraging lead in technology•Focus on growth segment of SMB and growth market of blades
Significance of the BU in corporate strategyHow it fits into the overall company’s goals
35
April 10, 2023
BU I Focus areas and strategy
Launch date
Product: significance
Evolution Performance Target customers
Key take-aways/Implications to :
Most important product lines and their significance
Key segment performance comparison
0
20
40
60
80
100
120
0 1 2 3 4 5
revenues
HP
IBM
36April 10, 2023
Key drivers of growth:
Key: 1=WW servers 2=x86 3=blades 4=windows 5=Linux
Size of the bubble represents market
share size. Along the y axis is revenues
and x axis are different mkt
segments
BU I Go-To-Market plan
37April 10, 2023
Product Categories
Sales & Distribution channels
Key Alliances and Partners
Key Marketing Initiatives
Key Customer Segments
Industry 1 Industry 2 Industry 3
Direct Sales Force
Enterprise Commercial EntrySMB
Marketing & Sales• Campaign • Market mix modeling• Pricing analysis• Research & Development
Advertising & Sales Promotion• Advertising Channels• Advertising Spend• Sales Promotion Activities
Branding/Positioning• Mission/Vision Statement• Positioning Vs Competitors
Distributors VARS Resellers OEMs
Key Alliances
38
April 10, 2023
BU ISWOT
• Portfolio pricing controlled by sales • Well-trained and compensated sales force • Mainframe expertise• Global storage account managers• Leading vendor in storage solutions, with
strong focus in software• Acquiring software and services companies to
expand portfolio and market reach • Sells solutions with partners (Oracle, SAP, etc.)• Partnership with Dell-CLARiiON Sales
• Narrow IT consulting experience and geographical reach compared to Services
• Acquisitions creating integration challenges• Cannot provide single vendor “end-to-end”
business infrastructure solutions
• Still widely known as a storage vendor within the enterprise management space
• High reliance on high end mainframe based storage system
• Price pressure and commoditization of HW and Storage.
• IBM acquisitions to impact EMC’s newly formed security initiatives
• With acquisitions spree, EMC could lose market perception as a storage vendor
• ’s reliance on HDS for high-end storage • Recent acquisitions (data classification,
security) provide access to new customers • Expanding SMB through Channel• Velocity program provides unified partner
infrastructure• Ability to integrate security software with
hardware offerings to provide secure information across ILM solution
• < ILM + BI -- need copy and validation>
Strengths Weaknesses
ThreatsOpportunities
39April 10, 2023
Analysts’ Opinion
“Software will contribute at least 22 percent of total revenue in 2008 from about 20 percent in 2006… Going forward, we believe these software acquisitions will help support top line growth, margin expansion, and free cash flow, unlocking hidden shareholder value”
- Benjamin A. Reitzes, UBS Investment Research
“On Lotus Connections: These social software applications have a high "value-to-effort" ratio, as is evidenced by the popularity (and value) of consumer space equivalents. Through 2008, these capabilities will give IBM a significant competitive edge over mainstream competitors that still lack them.”
- Gartner News Analysis
“Having a strong services business helps IBM sell everything from servers and storage to new software. Software and services are very complementary. They've made some key acquisitions in the last year, and they're not overspending on them. They're buying companies with established businesses that aren't too big, but that can grow”
- Doug Christopher, Crowell, Weedon & Co.,
BU Outlook
• Text information• Secondary resources analyst opinion or company’s own future plans/expectations
Strategic significance of BUs
41April 10, 2023
Leveraging core products and servicesIncreased vertical focus to offer vertical-specific solutions
IGS
STGSoftware
Corporate Strategy
Build Industry Focused solutions
Bundle business insight and technology across 17 industries and six horizontal solutions.
To be “One Stop Shop” IT solution provider for the enterprise market
Drive revenue through utilizing IBM
Labs, Microelectronics’
Engineering and R&D expertise
XYZ Corp.Comparative Performance Analysis
Competition mapping
43April 10, 2023
Printing business
Software
Services
Servers
Storage
Sun
Dell
EMC
NetApp
Xerox
Accenture
EDS
Microsoft
Oracle
SAP
Size of the segment will show
percentage share of that BU and the
competitors within the BU will move
towards the center with increasing market share
XYZ Corp.Competitive Market Position
44April 10, 2023
Growth Vs Mkt Share
Fujitsu, 91.3
IBM, 59.5
NEC, 123.2
Hitachi, 78.1
HP, 85.3
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0% 5% 10% 15% 20% 25%
Mkt Share %
Y/Y
Gro
wth
Average Market Growth = 3.0%
Market Size = $ 710.3 M
Axis – Market share
Y Axis – Y/Y Growth
Size of bubble Revenue
Source :
$1 B
X Axis – Market share
Y Axis – Y/Y Growth
Size of bubble – Company Revenue
Key take-aways/Implications to :
XYZ Corp. Vs Revenue and Profitability Comparison
45April 10, 2023
Revenue
$4,408
$3,925$4,079$4,169 $4,103
$3,837 $3,900$3,757
$3,892
12.1%7.6%
11.8%14.6%
10.6%5.9%
-2.3%-1.5%
10.7%
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Q205 Q305 Q405 Q106 Q206
-10.0%
0.0%
10.0%
20.0%
30.0%
Accenture Revenue $M HPS Revenue $MAccenture y-y Revenue growth % HPS y-y growth %
Operating Profit
15.7%
13.0%
16.5%
12.3%
3.3%
6.7%
8.3%7.8%
8.9%
1.6%0.4%
-1.8%-2.2%
2.1%
-9.0%
0.0%
0.9% 0.8%
0.0%
5.0%
10.0%
15.0%
20.0%
Q205 Q305 Q405 Q106 Q206
-10.0%
-5.0%
0.0%
5.0%
10.0%
Accenture Operating P rofit % HP S Operating P rofit
HP S OP y-y growth % Accenture OP y-y growth %
This Slide compares the Revenue , Operating Profit and Y/Y Growth for
and its Competitor
XYZ Corp. Vs Portfolio Comparison
46April 10, 2023
62%
29%21%
20%
50%50%
18% 21%29%
HPS Market IBM GS
C&I
MS
TS
Source: TBRI, IBM, S, IDC Q106,WW Services forecast update
Note: For comparison all data is for calendar year 2005. IBM GS CQ306 is for period ending Sep ’05. S CQ306 is fiscal year Q406.
GBS
GTS
Market mix is total services market per IDC Services Forecaster, Dec 14, 2006 release (includes both addressable and non-addressable for comparison purposes). IGS Market mix is as per company financials.
XYZ Corp. Vs KPI Comparison
Margins are comparatively better for IBM; Possible reasons – High margin product mix with software and services in the portfolioRelatively lower Revenue per employee – higher proportion of services business and direct sales forceHigher spend on R&D – scope for creating improved product/service mixHigher SG&A spend – better positioning and demand generation
47April 10, 2023
Note: All figures are for 2006 Fiscal Year; ’s Fiscal Year ends in October and that IBM’s in December
IBM
Y/Y Revenue Growth 0.3% 6.0%
Y/Y Net Income Growth 19.6% 158.5%
Gross Margin 41.9% 24.3%
SG&A as Percent of Sales 22.2% 12.3%
R&D as Percent of Sales 6.7% 3.9%
Revenue per Employee ($) $256,978 $587,551
Source : IBM 2006 Annual Report; 2006 Annual Report
Restricted
48
April 10, 2023
XYZ Corp. Vs Geographic Comparison
The Slide Compares the Revenue Generated by
Geographies for and its Competitor
52%
35%
38%
45%
10%20%
0%
20%
40%
60%
80%
100%
IBM HP
APJ
EMEA
Americas
• Americas region achieved revenues of $7,741 million in fiscal 2006, compared with $6,730 million for fiscal 2005, an increase of 15% in U.S. dollars and 14% in local currency terms. Growth was primarily due to the business in the United States, Canada and Brazil.
• EMEA region recorded revenues of $7,644 million for fiscal 2006 compared with $7,735 million for fiscal 2005, a decrease of 1% in U.S. dollars and an increase of 3% in local currency terms.
• The decrease was primarily due to a decline in business in the United Kingdom, including the impact of a $339 million reduction in consulting revenues associated with the resolution of the NHS contract.
49
April 10, 2023
XYZ Corp. Vs Comparison by Verticals
Source : EMC Earnings release Q406
28%
10%
16%
24%
12%21%
9% 10%
10% 10%
18% 19%
5% 4%2% 3%
0%
20%
40%
60%
80%
100%
IBM HP
Other
OEM
SMB
Communications
Distribution
Industrial
Public
Financial Services
50
April 10, 2023
XYZ Corp. Vs Customer Segments
Comparison of the Revenue Generated by the Customer
Segments for & the competitor and highlight
drivers for the growth as well as reasons for decline
10%
35%
38%
45%
52%
20%
0%
20%
40%
60%
80%
100%
IBM HP
Enterprise
SMB
Entry
51April 10, 2023
Cockpit ViewChange in Segments Over time
Entry
SMB
Enterprise
Comparison of the Revenue or Market Share Change for and
the competitor
XYZ
XYZ
XYZ
• IBM is challenging in this segments
Placeholder for key highlights or insights from analysis
Performance ChartingMarket Share Comparison for Segments
52April 10, 2023
x86
Blade Servers
SAN
DAS
NAS
Tape Storage
XYZ
0% 50% 100%
0% 50% 100%
0% 50% 100%
0% 50% 100%
0% 50% 100%
0% 50% 100%
Comparison of the Market Share Change for and the competitor across various
segments
Key takeaways
Analysts’ Opinion
“Software will contribute at least 22 percent of total revenue in 2008 from about 20 percent in 2006… Going forward, we believe these software acquisitions will help support top line growth, margin expansion, and free cash flow, unlocking hidden shareholder value”
- Benjamin A. Reitzes, UBS Investment Research
“On Lotus Connections: These social software applications have a high "value-to-effort" ratio, as is evidenced by the popularity (and value) of consumer space equivalents. Through 2008, these capabilities will give IBM a significant competitive edge over mainstream competitors that still lack them.”
- Gartner News Analysis
“Having a strong services business helps IBM sell everything from servers and storage to new software. Software and services are very complementary. They've made some key acquisitions in the last year, and they're not overspending on them. They're buying companies with established businesses that aren't too big, but that can grow”
- Doug Christopher, Crowell, Weedon & Co.,
XYZ Corp. Expectations
Growth
IBM expects its Software business to continue to be the strong growth driver
IBM is expanding its existing software offerings, especially those aimed at business users such as Lotus Connections, Lotus Quickr, Sametime, and WebS ere Portal Express
IBM expects to gain in server market targeting entry and midrange customer segment with benefits such as consolidation through virtualization
IBM BladeCenter JS21 Web serving farm server, and System p5 560Q midrange Linux server are examples of product introductions for the target segment
New Focus Areas
IBM continues to invest in high value-added business solutions like enhancing their global development center capabilities in India & China to leverage the Webify acquisition & to accelerate SOA
The first Power6 systems, lower-end models, are due in mid 2007. Power6 is expected to run at 4-5 GHZ with similar power consumption as Power5; an improved memory controller; improved SMT capabilities; a new floating-point engine, etc
TBR believes that IBM will continue to focus on BRIC as an area of growth for its main businesses of software, services and hardware, including its System z mainframe
Innovation
IBM, with the help of AMD, Sony and Toshiba, developed a new material to build a critical part for 45nm transistors. IBM expects this new material will lead to smaller, faster and more efficient chip circuitry than before
IBM plans to double the performance of its microprocessors in 2008 by using smaller, more efficient memory
IBM plans to use DRAM instead of SRAM as the embedded memory cache built onto each chip, according to a paper presented at the ISSCC (International Solid State Circuits Conference) trade show in San Francisco
XYZ Corp. Future Outlook
• Text information• Secondary resources analyst opinion or company’s own future plans/expectations
Backup Slides
XYZ Corp. Strategy Elaborating Core Competitor Strategies
Key take-aways/Implications to :
Core Strategy Implementation Desired Outcome
Fully Integrated Technology Leadership
System p server lineBlueGene/L
World’s fastest computer at a low costStrong hold in high-end serverImage of technological leadership
Rapid, Successful Innovation @ Lower Investment
Power.orgOpenpowerCompanies/SuppliersUniversitiesGovernment
Higher acceptability to broaden scope
Broader scope to reduce cost production
Concentration on design to reduce intensity of competition by achieving the required edge for its servers
Enhancement of Brand image as a technical leader and as one stop solution provider
Computers (IBM's own)Game Consoles (Sony, Msft, Nint)Digital TVs
Engineering & Technology Services (E&TS) to sell services to Power community
Focus areas (what the co explicitly talks about and what analysts feel)
This section will include core objectives of the company which are not short term; this can be obtained from analyst briefings, management discussion & analysis etc.
Covers the companies’ moves in order to put the strategy in action
Try to incorporate quantifiable data to validate these inputs
Validate company strategy with solid examples of how the company has moved to achieve these goals
Covers what the company plans to achieve
Quantify wherever possible
XYZ Corp. Acquisitions & Divestitures
Acquisition Objective
Through acquisitions, IBM aims to blend software, hardware, and research into higher-margin, standardized services for value added integrated customer solutions
Date Company Synergies Foreseen
January 2007Softek Storage Solutions Corp.
Expansion of the Storage & Data services business unit part of IBM Global Technology Services
December 2006
Consul Risk Management Inc
To strengthen its service-management stack by adding compliance monitoring, auditing, and reporting capabilities for both mainframe and distributed environments
November 2006
Palisades technology partners To add the company’s business consulting and software automation services to IBM GTS
VallentVallent, with more than 200 customers and OEM agreements with Alcatel, Motorola and Lucent, improves IBM’s presence in the Telco vertical
September 2006 Global Value Solutions SA Add sProvides systems integration & other IT services to SMB clients
August 2006Webify; MRO; FileNet; and ISS
Improves IBM portfolio in SOA-based fabrics for Healthcare & Insurance; adds to Tivoli capabilities; expands content management software and security offerings
Recent Acquisitions
Since 2002, IBM has invested close to $16 billion to acquire over 60 companies – primarily in software and services. The acquired technologies and capabilities have been integrated into IBM´s offerings and solutions. In addition, IBM has divested several businesses including hard disk drives, displays, and most recently the PC business. The net effect of these acquisitions and divestitures is an improved profit profile for IBM