IBM SWOT Analysis 2021

IBM SWOT Analysis 2021

IBM SWOT Analysis: International Business Machines or as we typically refer to it IBM is one of the prominent names in the world of business that inspire. 

It is likely that you are familiar with IBM. IBM has also been dubbed “Big Blue” and was founded by a merger of several smaller businesses that provide various services.

IBM is well-known for its mainframe computer, but it was not successful in gaining the same fame as other kinds of computers. 

This was among the reasons that hurt its market share, and it lost its importance. The company was forced to shrink in the 1990s as it was not able to adapt to the technological advancements that were occurring in the. 

Since then, IBM’s structure and its services have drastically changed as it entered the process of buying various companies and then selling its own-made products. 

The present-day IBM is quite different from what it was earlier. To grasp some features of the company’s present structure, take a look at the following IBM SWOT analysis.

IBM SWOT Analysis

Company Background

Key Facts
Name International Business Machines Corporation
Founded June 16, 1911
Logo IBM logo
Industries served Computer hardware, Computer software, IT services, IT consulting
Geographic areas served Worldwide
Headquarters The U.S.
Current CEO Ginni Rometty
Revenue $104.5 billion (2012)
Profit $16.6 billion (2012)
Employees 434,246 (2012)
Main Competitors Apple Inc., Cisco Systems, Inc., Dell Inc., Hewlett-Packard Company, Microsoft Corporation, Oracle Corporation, VMware, Inc., and many others.

IBM SWOT Analysis 2021

IBM’s internal strategic features that define the company’s capabilities and challenges include their strengths and weakness in turn. For instance, IBM’s global operations enable it to profit in economies of scale.

This helps to boost the company’s competitiveness. On the other hand, IBM’s commercial risks and opportunities are strategic external elements that reflect the current situation of the information technology industry as well as the markets that the company is competing in instead of internal strategic motives. 

IBM must develop suitable strategies and procedures to ensure that it stays an edge over the market while simultaneously stabilizing the company in line with its strengths. 

In order to ensure the company’s long-term development and sustainability amid significant changes in the industry, It is crucial to tackle the issues outlined within the IBM SWOT Analysis. 

Strengths In The SWOT Analysis Of IBM

IBM SWOT Analysis

  • The Brand Valuation: IBM ranks at 22 22nd on the Brand Finance report of 2016. Its value as a brand stands at $31.786 billion.
  • Sector Ranking: IBM ranks 6 6 globally in the field of technology.
  • The Business Model IBM concentrates on two areas of its overall expansion strategies. The first is to assist clients to improve their efficiency, creativity, and competitiveness through the use of business intelligence and IT solutions, and the second is to deliver the long-term benefit to shareholders. With this in mind, they have created the ability to offer superior solutions, software, and systems.
  • Being updated: IBM conducts businesses quickly to meet the ever-changing technology requirements worldwide. In order to achieve this, it buys or sells its businesses in line with. To support Web or mobile apps developers IBM acquired Compose which provides MongoDB, Redis, Elasticsearch, and PostgreSQL databases services. IBM discontinued its business in microelectronics because of the low-profit margins. IBM has invested over $17 billion in over 30 acquisitions to increase its capabilities for big data analysis and big analytics.
  • Data Analytics IBM allocates around 1/3 percent of its R&D budget for cognitive computing and data analysis. They earn about $17 billion of earnings solely from data analytics. They also founded their own Watson Group to develop and commercialize cognitive computing breakthroughs.
  • Middleware Market: It has a market share of 29.1 percent in the middleware industry and application infrastructure. They are the market leader in this market for 14 consecutive times in a row.
  • R&D: IBM has an enormous R&D facility, and is determined to develop the technology of tomorrow.IBM annually invests around $6 billion in R&D and is focused on high-growth and high-value possibilities. There are 12 labs around the world. Now that they have Watson to their side, they will be able to launch new products in this new area and gain the advantage of being the first to move.

weaknesses In The SWOT Analysis Of IBM

IBM SWOT Analysis

  • Software and service are expensive options. IBM offers expensive customized, integrated solutions for companies seeking to create a stable IT infrastructure within their organizations. This usually involves purchasing equipment, software, and services from IBM in tandem and is a costly expense for any size of business. This type of infrastructure investment is usually delayed in times of uncertainty, or slowing economic growth. This was the case over the last couple of years, as IBM was unable to cross-sell its products and experienced a decline in revenue during the same time.
  • Concentrate on custom services. IBM focuses on offering customized solutions to medium and large-sized enterprises. It is a profitable business model, but it is just a small portion of the overall market. The majority part of the marketplace is typically content with off-the-shelf products and services. The absence of these products renders IBM difficult to access by the majority of customers which is where rivals like Oracle and SalesForce succeed.

Opportunities In The SWOT Analysis Of IBM

IBM SWOT Analysis

  • Innovation: IBM has been focusing on developing its technology so that it can be better position itself in the marketplace. For 2020 IBM invested 6.33 billion U.S. dollars on research development, development, and engineering. IBM is one of the top research companies worldwide has the distinction of having the largest number of patents granted in the United States in 2020.
  • Strategic alliances: Cloud for Telecommunications, an initiative of IBM has seen more than thirty-five partners join forces to work with IBM. IBM also has partnered in collaboration with Samsung as well as Redhat to develop a new generation of 5G as well as mobile edge devices that use private networks (IBM 2021).
  • Changes in the work environment: The majority of businesses increased their technological development for ways to prepare their employees for remote work during the outbreak. IBMs multi-cloud and AI solutions provide a wealth of possibilities and position the company in the long-term work-from-home environment.
  • Divesting: IBM’s plan to spin off its GTS segment’s infrastructure managed unit into a public company, which was revealed on October 8th, 2020. This will result in two leading companies, each with strategic orientation and the flexibility to fulfill their respective goals and create shareholder and client value (IBM 2021,).

Threats In The SWOT Analysis Of IBM

IBM SWOT Analysis

  • Increased competition in clouds computing. The Cloud computing market is a new and lucrative market with lots of potential for growth. Potential profits lure many startups and newcomers. They are threatening to steal market share away from the dominant IBM.
  • The slowing of growth in the global economies. As mentioned earlier, IBM sales heavily depend on companies’ ability to invest massive amounts in IT infrastructure however this isn’t the only option in an economic slowdown. While this situation isn’t expected for the entire globe for the years 2013 or 2014, certain regions, such as Europe are still struggling to increase their growth.

The SWOT analysis has limitations IBM

While it is true that the SWOT analysis is used widely as a tool for strategic planning, however, it does have some limitations.

  • Certain aspects or capabilities of an organization could be both strengths and weak points at the same. This is among the main drawbacks that SWOT analysis has. For instance, changing environmental regulations could be an issue for the company but however, it could also be an opportunity in the sense that it can allow the company to compete on the same level or even gain an advantage over competitors, if they are could develop the product more quickly than its competitors.
  • SWOT doesn’t provide a way to get a competitive edge and therefore it shouldn’t be a complete solution.
  • The matrix serves as an initial point of reference for discussions on how suggested strategies can be implemented. It also provided an evaluation window, but not an implementation plan that is based on the strategic competitiveness IBM
  • It is a static analysis and analysis of the current conditions with only a few potential modifications. When circumstances, capabilities, and threats evolve, the dynamics of a competitive setting cannot be analyzed in the form of a single matrix.
  • SWOT analysis can make a firm over-emphasize the importance of a single external or internal aspect when formulating strategies. There are interrelations between the important external and internal aspects that SWOT doesn’t reveal, which could be crucial in determining strategies.

A SWOT analysis that is weighted by weights of IBM

Due to the previously identified weaknesses of the SWOT analysis/ matrix, the corporate management has decided to assign an appropriate amount of weightage for every internal strength and weakness of the business. 

They also consider the likeliness of future events happening in the near future and what the effect can be on the performance of the company.

This is referred to as weighted SWOT analysis. It is superior to basic SWOT analysis since With weighted SWOT analysis IBM managers are able to focus on the most crucial elements and ignore the less crucial ones. 

This also helps solve the problem of a long list which is when organizations make lengthy lists but do not address any of the items that are considered important.

Conclusion

IBM’s future IBM isn’t looking very bright at the moment. IBM was once among the most prominent brands in the IT business however IBM was unable to maintain its competitive edge and credibility throughout the years. 

The company has given in to the challenges and weaknesses and the difficulties it was able to overcome to remain current did not stand up to the scrutiny of other companies. 

If IBM can return to the prominence it once held and be a top name in the technology world again, it is impossible to predict at this moment. 

It is up to us to examine if the company is able to make a change to its current path or if it keeps sliding down the market.

A SWOT analysis is an assessment of strengths, weaknesses potential threats, opportunities, and weaknesses. 

It is a tool in business that is utilized to improve the management of companies in a way, as it assists to understand them from different perspectives. Conducting SWOT Analysis SWOT Analysis can open your eyes to a variety of different perspectives.

Reading through other SWOT Analyses could be beneficial as it assists you to understand the work of other firms. 

It also aids in understanding how to do the SWOT Analysis of your choice. That’s why we offer Examples of SWOT Analysis on our site and Templates for SWOT Analysis to assist those who want to do one.

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