ibm-.doc

2.1.1.3 SWOT Analysis STRENGTHS • Clear organizational structure • Wide range of products and services • Resourceful cost reduction • Brand reputation • International reach The success of IBM is mostly based on these reasons as listed above. IBM has established a clear and a stable organizational structure. Otherwise, it cannot defeat other competitors in the same industry if the company is in trouble of internal hierarchical problems. IBM offers a wide range of products and services to different kinds of customers worldwide as most of the customers are now looking for a better quality of life nowadays, IBM can therefore suit each of their needs in daily lives. IBM also reduces its costs in an efficient way as the company adapts the advantage of online service to its customers and its internal control. From this perspective, IBM can save a lot of cost of paperwork, time, staff and other overhead costs per year. As a worldwide brand, IBM is a world leader in it industry. It gains reputation from all around the world as it reaches globally with high standard and quality of goods and services. WEAKNESSES • Costly operations • Global ethical behaviours However, IBM carries a great dollar amount of its operations. This can be included the expenses of day-to-day internal operations, salaries of employees, the expensive tools and software that used in its operations. Another issue that rises is the problem of global ethical behaviour. According to the report of Catholic Agency for Overseas Development (CAFOD) called “Clean up your Computer” in 2005, IBM was warned for poor labour standards and working conditions in foreign countries such as China and Mexico. It is intolerant for a global company to hardly control its code of ethics. Therefore, IBM must better manage and stop providing poor conditions to it labours overseas. OPPORTUNITIES • Economic growth globally • Global Logistic System After the international financial crisis, companies are striving to compete with their competitors locally and globally. In order to be successful in business, IBM should provide some innovative and unique products and services to customers in order to compete with its competitors in the same industry. As oil prices have been increasing these few years, it is known that the transportation cost is getting high as well for every industry including IBM. In order to lower the transportation cost such as “procurement, provisioning, ordering and delivery” (Gryk, 2008, p.11), IBM must adapt an unified and an automated logistic system globally. Therefore, the costs can be minimized and the company can handle its operation efficiently internally and externally. THREATS • Risk of outsourcing • Customer data and intellectual property Most of the employees working in IBM are outsourcing (Bizcovering, 2009). It is the threat for its employees who work there because they are independent of the company. Maertz, Wiley, LeRouge, and Campion (2010) found that employees “generally do not have less job security, less organizational attachments, or higher turnover intent” (p.284) who work based on outsourcing. It is also a threat of the insecurity of customer data and intellectual property for IBM (Burk, 2008, p.41), especially doing business in China. IBM should be aware of this issue and monitor the government regulation. Moreover, IBM should be better control the security of the software and hardware regarding to customer information. It is because it is a significant factor that determines the success of business. 2.1.1.4 Discussion of if the firm/industry has used e-commerce effectively and/or where it can improve IBM has capitalized As e-commerce is popular and is used in the business world for day-to-day operations, it enables trade to occur online efficiently with less paper work. In order to take the advantage of e-commerce and adapt to the current business atmosphere, IBM created The Institute for Advanced Commerce (IAC) in 1999 (IBM Research). The goal of IAC is to raise the current market concerns and to build a long term commerce solutions. Such issues are concerned are “privacy, variable prices and negotiated dealings, direct business to business interactions, managing the end customer, impact of globalization, deep computing for comer, and system foundations” (IBM Institute for Advanced Commerce). Most importantly, IAC discovers the economic development and emerging technologies in order to “better understand the technical, business, and social processes that are shaping the future of electronic marketplace” (IBM Institute for Advanced Commerce). The website of IBM offers a wide range of IT services to some specific industries such as chemicals and petroleum, travel and transportation, financial markets, telecommunications, and wholesale distribution in order to meet their needs specifically. The website is also straightforward to navigate for some organizations and companies to make decisions online and better understand the advantage of adopting these IT services through IBM. Not only IBM offers IT services to a range of types of specific industries, it also provides various kinds of products on its website. Such products include servers, software systems, and storage. According to the official website of IBM, the servers provided by IBM are Blade servers, Power systems, mainframe servers, and Cluster systems. The software products on the website of IBM include Business Analytical tools, which are Cognos, SPSS, Clarity, OpenPages GRC, and ILOG Optimization software. The software products also include Enterprise Content Management, Information Management such as DB2, Infomix, InfoSphere, Lotus, Rational, Tivoli, WebSphere, and System z software (IBM Website). The storage devices offered by IBM are disk systems, hard drives, microdrives, network attached storage, storage area networks, storage software, and tape systems (IBM Website). IBM has adopted the supply chain management software called AS/400 mainframe system in order to increase its e-commerce presence (Alorie, 2000, p.147). The reason of adopting this system is because IBM could provide “financing and supply- chain implementation and integration services for its 600,000-plus AS/400 customers” at a lower cost (Alorie, 2000, p.147). This system is popular to midsized companies as they could not afford to hire consultants and IT personnel. These midsized companies used this supply chain management software could participate in online trading exchanges as IBM stated (Alorie, 2000, p.147). In addition, this supply chain management software can facilitate customers to link electronically “to those exchanges with E-commerce integration services and tools such as MQSeries, Net.Commerce, and WebSphere, which its supply chain partners support” (Alorie, 2000, p.147). However, IBM neglected some of the smaller organizations such as universities, colleges and any other smaller firms as IBM only pays attentions to large organizations heavily. These small organizations are hardly to find their interest on the IT services and software provided by IBM, and they will not consume these products and services eventually. Therefore, IBM should offer a wider range of IT services and software to smaller organizations, so that these organizations would not be moved away from IBM. 2.1.1.5 Demonstration of how key concepts are used by the firm/industry There are many concepts that IBM is used especially in the fast pace online business world. In order to take advantage of the e-commerce successfully, IBM adopts many applications and solutions to meet its customers’ demands. Such applications and solutions are found on the website of IBM, which are B2B Direct e-commerce, Customer Relationship Management, Business to Consumer concept, Electronic Funds Transfer, Globalization, Product Lifecycle Management, Supplier Relationship Management, and E-Supply Chain Management. The B2B Direct e-commerce allows customers to incorporate wit