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Ever heard of the BIG BLUE?#76in Sales#24in Profit#223in Assets#45in Market value#7World's Most Valuable Brands#420America's Best Employers#139Canada's Best Employers$142.7Billion

Thats Right! Its. . .

Company ProfileInternational Business Machines Corporation (IBM) incorporated in 1880s.

Known as IBM only in 1924 under President Thomas J Watson.

THINK. was their corporate mantra!

Products include Customised Hardware, Software, Consulting, Customised software solutions etc.

Today, largest and most profitable IT company in the world with $103 billion in sales in 170 countries.

IBMs First product: 1890SAGE Console

IBMs Today: 2016Data centre

IBMs First TV commercial: PC1980https://www.youtube.com/watch?v=1t6o48tHSME

IBM in 2016 : Cloud Computing

https://www.youtube.com/watch?v=Sdc1K_zswWU

IBMs Marketing StrategiesFocusing on CORE competencies like LARGE scale customised Hardware and Software production.

Customer centric marketing campaign i.e THINK campaign.

Large R&D budget: $50 billion

Constant innovation with huge PRODUCT line.

Target marketing strategies for segments.

Focus on Quality for increasing brand value.

Large scale contracts with Governments.

Less outsourcing and own production to reduce costs and increase efficiency.

Top among competitors in the Market. Directly competes with biggies like Microsoft, Intel, Honeywell etc.

Global outreach through various channels, offline and online.

IBMs Competitive Dynamics

Proactive MarketingMarketing for future consumer needs. By proactive marketing, IBM actually created a gap in the market. A space for themselves. That helped in Marketing.

Being dominant in brand positioning, IBM filled up all the possible spaces in the market, all by launching a product which can challenge even a Market leader.

Defensive Marketing

IBMs Product Life CycleIntroductionLaunched 1st product in 1880s. Quality and innovation were its key focus points. Created a market space for themselves.

GrowthCustomised software and hardware. Mass production with tie ups with various firms and scaling operations. Expanding into various countries. Money on R&D.

MaturityMore options with customers due to competition in the market. Ups and Downs with revenues falling due to outsourcing.

DeclineGlobal recession and increasing customer acquisition costs, focus on niche segment and improve existing products.

Mini Case: QuestionsFew companies have had such a long history of ups and downs as IBM. What were some of the keys to its recent success? Can its plan to solve some of the worlds most challenging problems succeed? Why or Why not?

Most important reasons for a turnaround for IBM: Continuous Focus on R&D IBM believed in constant innovation in their products. With a R&D budget of $50 billion dollars during 2000-2008, it always gave it an edge over others. Adaptive Marketing strategies Using different channels to reach out to different customer segments. Adapting to ever changing needs of customers.

Adaptive business modelAll business units into a single unit. New line of products and expansion into various segments.

Apart from this the changing leadership made a huge difference in pulling IBM in its bad times.

Yes, IBMs plan to solve some of the worlds most challenging problems will succeed. The problems which IBM is targeting like:Better waste water management.Lower traffic congestionCollaborative health care solutions Provides a huge GAP in the market, which can be a golden opportunity to tap into. Moreover because IBM already has the resources to do so and with very less existing competition, they are bound to succeed.

Who are IBMs biggest competitors today, and what risks do they face with their current strategy?

IBMs biggest competitors today include:

Risks:- Many competitors in the market. More options for customers.- Value proposition needs to increase.- Increase customer acquisition cost (CAC).- Large scale manufacturing may deteriorate quality.

Did you know?IBM acquired PwC in 2002 for $3.5 billion.IBM sold its PC business to Lenovo for $1.75 billion.

SUMMARY

Created by Daniel Nath, SRM Kattankulathur during a Marketing management internship by Prof. Sameer Mathur, IIM Lucknow