IBM Case study Under Prof. Sameer Mathur, IIM Lucknow.

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

2. That’s Right!
Its. . .

3. Company Profile
 International Business Machines Corporation (IBM)
incorporated in 1880’s.
 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.

4. IBM’s First product: 1890
SAGE Console
IBM’s Today: 2016
Data centre

5. IBM’s First TV commercial: PC
1980
https://www.youtube.com/watch?v=1t6o48tHSME

6. IBM in 2016 : Cloud Computing
https://www.youtube.com/watch?v=Sdc1K_zswWU

8. IBM’s Marketing Strategies
 Focusing 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.

9.  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.

10. IBM’s Competitive Dynamics

11. Brand Positioning

14. IBM’s Product Life Cycle
 Introduction
Launched 1st product in 1880’s. Quality and innovation were its key focus
points. Created a market space for themselves.
 Growth
Customised software and hardware. Mass production with tie ups with
various firms and scaling operations. Expanding into various countries.
Money on R&D.
 Maturity
More options with customers due to competition in the market. Ups and
Downs with revenues falling due to outsourcing.
 Decline
Global recession and increasing customer acquisition costs, focus on niche
segment and improve existing products.

16. Mini Case: Questions
 Few 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 world’s 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.

17.  Adaptive business model
All 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, IBM’s plan to solve some of the world’s most challenging problems
will succeed. The problems which IBM is targeting like:
- Better waste water management.
- Lower traffic congestion
- Collaborative 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.

18.  Who are IBM’s biggest competitors today, and what risks do they
face with their current strategy?
 IBM’s 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.

19.  IBM acquired PwC in 2002 for $3.5 billion.
 IBM sold its PC business to Lenovo for $1.75 billion.

20. SUMMARY

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