The International Business Machines (IBM) Corporation was incorporated in 1911. It deals with technology. IBM operates well-stipulated business segments. The five segments include; Global Technology Services (GTS) and the Global Business Services (GBS). Besides, it operates the Software Systems and Technology (STG), as well as the Global Financing (Groucutt, Forsyth, and Leadley 200).
The Firm’s GTS segment is concerned with the provision of IT infrastructure and other business process needs. The GBS segment provides services on consultation. The firm’s software segment comprises majorly of middleware and other operating systems ware. The STG segment offers customers with infrastructure technology. Additionally, the firm’s Global Financing wing provides substantial solutions for goods or services ideal to the final users’ business dealings (Groucutt, Forsyth, and Leadley 200).
The Company has stiff competition from a range of well-established companies such as Accenture, the Amazon.com, Co., Computer Sciences, Inc. Fujistu, the Google Company, as well as Cisco Networking Systems, among others (Groucutt, Forsyth, and Leadley 200). IBM is mostly perceived to be a safe and very conservative technology stock. In 2015, the company recorded a 12th consecutive financial quarter of alarming decline of its revenues. The NYSE report shows IBM to have had 9% stock fall in the last 12 months (Groucutt, Forsyth, and Leadley 200). However, the company has an increase in its annual dividend return of 2.7% (Groucutt, Forsyth, and Leadley 200).
Despite its strategic growth initiatives and healthy performance, the company’s core businesses are not doing any better. IBM’s business segments, in the last quarter, reported a significant decline in 12% revenue growth rate (Mathis and Jackson 45). This decline is attributed to the weak customer spending, slothful demand in its software. Additionally, strong dollar ratings are up its Diaspora revenues. The company did not invest in the lower margin ventures.
The company mainly focuses on customized products. It majorly deals with large and middle-level enterprises. It provides customized solutions to these businesses. However, this business model is primarily profitable, but it only covers a small proportion of the market. This model gives a leeway to its competitors such as Oracle and the SalesForce to thrive. These companies reach out to all enterprises including the smaller businesses.
IBM Company provides expensive, integrated, and customized solutions to businesses. It targets businesses that want to establish reliable IT hubs in their companies. These businesses must have to buy hard and soft-wares. They further buy the services from the IBM. It is a costly affair. Hence, most businesses suspend such infrastructure expansion during hard and uncertain economic times (Mathis and Jackson 45)
Opportunities
IBM's investments, especially in the strategic imperatives, have enabled the company to expand its businesses in new markets. In 2014, the company pumped $1 Billion in the launching of the business unit (Mathis and Jackson 45). The Watson is its data-processing unit. This unit is projected to generate approximately $10 billion in cumulative annual revenue in a span of a decade (Groucutt, Forsyth, and Leadley 200). The company has equally invested $1.2 billion aimed at bolstering and improving its cloud-oriented businesses (Mathis and Jackson 45). It has partnered with other companies such as the Microsoft and Apple, Inc. This new association is anticipated to strengthen the cloud-based ventures. It will develop middleware and strong apps (Mathis and Jackson 45)
Last year IBM established a trendy new Internet of Things (IoT) section. It promised to inject $3 billion in the venture progressively in the next four years (Mathis and Jackson 45). These investments are estimated to give IBM a gist of the booming and trendy IoT market. The IDC segment anticipates its growth from $1.9 trillion to $7.1 trillion within the next seven years (2013-2020) (Mathis and Jackson 45). IBM has licensed out its major models for the semiconductor chips, its servers, and other software to technology companies in new markets such as China. The Open Power team members offer considerable technologies to Diaspora firms, thus forging new alliances with overseas markets (Mathis and Jackson 45).
Works Cited
Jonathan, Groucutt, Patrick, Forsyth, and Peter, Leadley. Marketing: essential principles, new realities. London [u.a.]: Kogan Page, 2004. Print.
Robert, Mathis and John, Jackson. Human Resource Management. Boston: Cengage Learning, 2010. Print.
