IBM: Growth and Development of the IT Giant

IBM is considered the leader of IT industry where it is specializes in computing, having its arm spreads to almost all dimension of technology from gadgets to software and solutions. IBM is world’s largest information technology company with revenue of $91 billion.  IBM provides the biggest of the following services:

• IBM has invested in IT services ($47B),
• IBM has invested in hardware ($24B),
• IBM has invested in rental and financing ($2B).
• IBM has employed over 329,000 employees all its branches around the world in almost 170 countries.

“International Business machine is an IT giant now days, stretching it hands”. The IBM now a days provides a wide range of services from data storage, servers and servers secure database. IBM is now aiming for AI (artificial intelligence) domination.

IBM has also good contribution in the space research by partnering with MIT and NASA on database systems and consumers products like IBM ThinkPad 750. The environment monitoring software was established by IBM in 1999 which has contributed to environment management and protection. IBM’s system 390 is the world most powerful mainframe computer and Watson is the world’s first super computer.

Many cost-effective technologies were developed by IBM like, instead of pure silicon chip, introduced a blend of silicon and germanium. IBM earns more profit than the next nine computer firms generated in total sales, spending more on research and development than they made in earnings.

Global enterprises are the companies that operate around the world. There are categories based on their huge size, a large number of products, advance in technology, marketing, strategy and network of operations all over the world. IBM is considered a global power as it operates in over 170 countries around the world and it was able to sustain its global status by focusing on its marketing and R&D departments where its keen on staying on top of its field and being the leader by introducing new technologies and solutions by studying different markets and analyzing their data to specify each market’s needs to be able to provide the products and services that would satisfy that need.

IBM’s success come from the diversity of their products and services, they offer a wide range of IT products and technology solutions that help their client’s lower costs, also their approach in employing only qualified and experienced employees is behind the level it reached by the commitment and dedication of its workforce. In addition to a structured market development process.

IBM’s Marketing Strategies

IBM focuses on CORE competencies like large scale customized hardware and software production, with a large R&D budget of $50 Billion and constant innovation with huge product lines by focusing on quality to boost its brand value and diverse target markets as it focuses on both B2C, B2B & B2G, in addition to backward vertical integration. The company has to maintain these strategies and work on evolving to compete with its fierce competitors such as Microsoft, Intel, Honeywell, Accenture, Google, etc.

Marketing Mix of IBM

Product

IBM deals in technology and is a manufacturer of computer middleware, hardware, software and laptops. It also offers infrastructure hosting from nanotechnology to mainframe computers. It focuses on higher-value products and profitable markets that include green solutions, virtualizations, cloud computing, security, business continuity, data analytics and business intelligence. 

Place

IBM HQ is located in Armonk, New York. In addition to that it is located in over 170 countries to reach its vast markets. Research and Development are a necessity for IBM as it has twelve such labs that are located globally like Texas, California, Melbourne, Beijing and Bangalore.

Price

IBM adopts value-added pricing strategy this will help in providing a balance between the cost and customer satisfaction. It also has taken pay-as-you-go pricing strategy and has decided to implement on few software products.IBM has shortlisted twenty popular products and will let its customers decide to mix and match them to meet monthly subscription plans.

Promotion

Their promotional team has put their heads together to bring innovative ideas that has a personalized flavor to it. Ads are now-a-days catchy as well as informative so that people have a clear concept of the products. IBM uses video ads and social media campaigns to build positive brand awareness but it rely mostly on personal selling to reach its main target market B2B & B2G where every salesperson at IBM is required to be professionally groomed at all times to provide an image of competence to build confidence amongst the customers. IBM offers its employees provisions like paid vacations, survivor benefits and group life-insurance.

IBM’s Competitive Advantage

IBM has three significant competitive advantages:

Brand: There is a phrase known in the business community that says 'no one has been fired for hiring IBM' which is a statement of its brand power and a credibility.

Portfolio: Very few companies have the breadth of products and services IBM offers, from mainframes to semiconductors to consulting services. For very large projects that require multiple technologies, implementation and managed services, IBM is a one stop shop.

Legacy Systems: The simple fact is that despite all the noise about big data, IoT and cloud, the world runs on legacy systems. Every major company has a mission critical system running on a mainframe, with software developed in Cobol maybe 30 years ago. These systems are not going away and these clients will keep paying maintenance to IBM for a long time. It's IBM's opportunity to sell them other stuff.

Globalization & Customization

Globalization refers to the process of integration across societies and economies. The phenomenon encompasses the flow of products, services, labor, finance, information, and ideas moving across national borders. IBM was able to adopt this strategy in its production by creating new products that can be sold various global markets such as Thinkpad, IBM SPSS, Cloud, etc.

These products have been promoted all over the world with the same promotional campaign and characteristics as can be used any individual or company around the world.

Also, a key factor of IBM’s success is its ability to customize products and solution for its client’s needs, and per its B2B & B2G strategies it can also customize existing products to fit that specified need, such as IBM CPQ, Kanexa and customer software development. This can be seen on a local example with Zajil Telecom Company back in 2013 when they wanted to implement a new CRM software with specific functions that would fit Zajil’s business nature so IBM was willing to do so with added cost. Another example is when IBM sealed a government contract worth 1 Billion Australian Dollar for the whole IT systems, which it had to implement a strategy to integrate all of the different systems across the government to one single system.

IBM is now successful in the United States and around the world, but it wasn’t an easy path for IBM to build this enormous brand, it faced mountains of challenges that had to adapt to it or overcome it, at first theirs the consumer perception where the perception of the product’s performance is vital so IBM focused on its Quality trait to face this issue, another challenge mainly faced by IBM is the cultural and language differences where any misinterpretation of its letter could mean the downfall of the campaign in that country which is the reason IBM has multiple research centers around the globe that plays the role of an advisor for the marketing team to evaluate the content of that campaign and whether its suitable to a specific target market. Also an existing issue that had faced IBM and still to date the reason behind IBM is missing from number of countries that is the laws and legislations for the countries it intends to enter for example Kuwait is a promising market and has vision of 2035 and is a profitable investment market but with that IBM still isn’t officaly open in Kuwait, it has resellers agents only due to the law that states that 51% of any company to open has to belong to a Kuwiat citizen which IBM refuses.

IBM has been ranked 7th world’s most valuable brand in the forbes magazine list. The brand has been valued at $41.7 billion as of June 2018.

IBM uses a mix of psychographic, geographic and demographic segmentation variables.

Selective targeting strategy is used by IBM to make the particular product and services available to their clients as per their requirement.

It also uses user benefit-based positioning strategy to position itself as a company which creates value for its stakeholders across the value delivery system.

IBM Ranked the Worldwide Market Share Leader in the technological sector, IBM capturing 23.6% share of overall market in 2018.

IBM isn't slowing down on investing in growth areas. It will continue to build out its cloud and as-a-service businesses, with 'steady investment' in capital expenses part of its longer-term model. The company also expects to make more acquisitions. Over the past six years, between research and development spending, capital expenditures, and acquisitions, IBM has invested $71 billion, with $37 billion of that total having come in the past three years alone. IBM is planning a $600 million expand into the Brazilian market to promote IBM’s Cloud as a study showed that 80% of the Brazilian market doesn’t use IBM’s cloud so the company plans to starts its campaign early 2020, also artificial intelligence is growing market where IBM has invested billions of dollars in, and is planning a $2 billion expansion in New York .