Key Strategies of IBM

IBM

Introduction

The world has been changed forever by innovations made by the 1911-founded International Business Machines Corporation (IBM). The company has created a lot of astonishing products which includes the floppy disk, the hard disk drive, and automated teller machines (ATMs). Although IBM has greatly expanded its business over the past century, one feature has remained constant: its innovation-focused business strategy. The company’s business strategy is centered on assisting clients in using the hybrid cloud’s and Artificial Intelligence (AI) technologies. This way, clients can fully utilized the power of Artificial Intelligence and hybrid clouds in their organizations.

IBM has created a business plan that will accelerate growth while positioning the corporation for success in the future.

In this article, I’ll be examining the main components of IBM’s business strategy and how they plan on being competitive in the IT world. Without further ado, let’s dive in.

General Strategy

Cost leadership is IBM’s general approach to gaining a competitive advantage. In order to achieve competitive pricing or to increase profit margins, this technique comprises keeping low costs in company operations. High economies of scale, one of IBM’s strengths identified in the SWOT Analysis, makes it possible for expenses to be so low. For instance, the corporation can save expenses when offering cloud platform products and technological services because of its large-scale operations. In this regard, IBM adopts competitive pricing for these goods and services as a cost leader. Additionally, the cost leadership generic approach promotes competitive edge through proficiency in the management of commodities and manufacturing processes.

Products Manufacturing

Product development is one of

 IBM’s main strategies for rapid growth. A strategic goal of product development is to expand the company by ongoing innovation and the launching of new commodities in the target market. By employing this intense strategy, IBM, for instance, can expand through the sale of both its other products and new computing systems. The generic cost leadership approach promotes product development by enabling the business to provide new goods at market-competitive pricing. The resulting competitive advantage supports IBM’s mission and vision statements’ emphasis on industry leadership.

Penetration of the market

In IBM, market penetration is a secondary, intensive growth strategy. Maximizing the company’s market share in each product line or product category is one of the strategic goals when implementing market penetration. For instance, IBM wants to increase the amount of cloud platform products it sells. The generic cost leadership competitive strategy offers cost-cutting tools to enable the business to be successful with this intensive strategy. Given that the company is now one of the major players in the sector globally, market penetration is now only of secondary importance in supporting the expansion of the company.

Acquisition and Diversification

The aggressive strategy of diversification has aided IBM’s expansion in the information technology sector. Diversifying the company’s business operations is one of its strategic goals in this situation. For instance, IBM expands by acquiring smaller businesses in other sectors. The generic competitive strategy of cost leadership is supported by diversification by increasing the potential benefits based on recently acquired business firms. The trend of technology integration in many areas presents an opportunity for the corporation to capitalize on, which can be seen in the PESTEL/PESTLE analysis of IBM.

Increased focus on the company’s open hybrid cloud platform and AI

This strategy of the company is grounded in the realities of the technological world in which it lives and the visions of the future that its clients pursue making it have a large tendency to spur growth.

AI and hybrid clouds are quickly taking over as the center of business, transactions, and eventually, computing itself. This change is a result of clients’ evolving needs, who now perceive an open hybrid cloud strategy as 2.5 times more beneficial than relying solely on public cloud. IBM’s goal, in recent times, is to focus its efforts on the issues that mean the most to its clients in order to help them advance the most. The company has made plans to facilitate the innovation, swift acceleration, and great strategic investments in the future of the firm as a more narrowly focused technological organization. It plans to focus a lot more on hybrid cloud development and AI

Enhancing Digital Transformation Speed

Radical change and upheaval are now the norm in this new technological era. Due to the pandemic, the necessity for digital transformation has intensified and now affects almost all large organizations’ principal business activities. In order to achieve a successful and rapid digital transformations, the company has realized that it must be effective and reliable enough to provide technologies that’ll help  overcome numerous challenges. Some of which are;

-Management of increased complexity.

In recent times, majority of businesses use various heterogeneous IT infrastructures and clouds. This results in an increment of complexity.

-Acquisition of value from a data explosion.

 Researchers and analysts predict that there will be a massive increase, up to three-folds of data over the next three years.

-Ensuring sustainable operations in light of disruptive changes, lack of available workers, increased cybercrime and malicious security breaches.

-Jointly overcoming these obstacles through an integrated, sustainable execution strategy.

In order to curb these issues and ensure the swift acceleration of digital transformation, IBM has put forward the hybrid cloud. The company strongly believes that this method creates about 2.5 times more value for firms than a public cloud. This strategy is a way to reach out to firms and individual businesses that need digital transformation and market hybrid clouds.

Creating a differentiated architecture for business innovation

According to IBM, its capacity to scale up solutions for corporate digital transformation and mission-critical technologies is a result of its versatile and safe open hybrid cloud platform, the wide range of assets it affects, and its ability to merge them. To meet clients’ needs for hybrid clouds and AI, IBM’s business strategy focuses on creating technologies. These new technologies will be designed to have beneficial features to businesses which include,

-Construction and modernization for the hybrid cloud, enabling quick, dependable, and agile development and operation.

-Regardless of the location of the data, develop data-driven information and insights while upholding enterprise-grade data governance, security, and integrity.

-Automate business operations for efficiency and effectiveness with AI-driven evaluation.

-Converting the operations and companies of clients into enduring, best-in-class industry standards.

Edge Computing Partnership

A distributed, cloud-era architecture called edge computing was created to manage the real-time data integration generated by millions of linked devices. Applications need to analyze data in real-time at the network’s edge in order to minimize latency. Not having to send massive data streams to centralized cloud servers for processing also saves money.

Edge computing is being used by businesses to develop a wide range of applications, including virtual and augmented reality, smart buildings, smart cities, workspaces, retail experiences, driverless automobiles, automated factories, and more.

By incorporating cognitive processing into edge computing, more intelligence is generated exactly where the apps are being used. Therefore, the collaboration between IBM and Foghorn that was announced is very important. This enables IBM’s Edge Application Manager, which runs on OpenShift and maintains excellent performance applications on edge devices rather than transmitting the data to the cloud for processing, to use FogHorn’s intelligent edge software platform. This collaboration ensures effective edge computing. This partnership generates revenue for both organizations.