SWOT Analysis of IBM
IBM is an American-based multinational technology corporation. It is famous for manufacturing computers, tech products, and hardware. The company has a strong international presence. It is one of the leading names in the tech sector with high brand awareness. This SWOT analysis of IBM will help to unearth its internal (strengths and weaknesses) and external (opportunities and threats) factors. Let’s get started.
Company Name: International Business Machines (IBM) Corporation
Founders: Charles Ranlett Flint
Founded: Jun 16, 1911, Endicott, New York, United States
Headquarters: Armonk, New York, United States
CEO: Arvind Krishna (Apr 6, 2020-)
Type: IT Services
Sector: Computer hardware, software, IT
Unique Selling Proposition: One of the best tech brands in the world
Customers: Microsoft, HP, Intel, Google, Dell, Oracle, and Cisco
Target Consumers: Business customers, enterprise customers, SMBs, and tech companies
Revenue: $70.788B (2021)
Net Income: 5,743 million USD (2021)
Strengths of IBM | SWOT Analysis of IBM
First goer in Cloud Computing:
In 2007, IBM was the first company who move to cloud computing. The name of the program was “Blue Cloud.” It was formulated to provide software and hardware solutions for companies who want to have their own private cloud. So, it was the first goer in cloud computing. The company has been offering various services in the market as compared to other companies.
Significant Market Reputation:
There is no doubt about it that IBM is one of the most famous companies in the world. It has secured various awards for different achievements. It has helped the company create a positive and strong image in the market. According to Interbrand, it was one of the most valuable companies in 2012. It gives consumers great confidence while acquiring the services of IBM.
The company has divided its business into four segments, hardware, financing, software, and services. All segments fall in the star category because all are profitable. Moreover, IBM has been trying to expand its services in hardware and software. For this reason, the company is earning major revenues all over the world. On the other hand, they also focus on China and other Asian parts to diversify their geographical reach.
From 2000 to 2012, the company has made various acquisitions in different fields like cloud, commerce, security, and analytics. This thing has led to tremendous growth in different areas of IBM. As a result, the company is a leading name in cloud computing and software solutions. It gives the company a competitive edge in the market. The company has been thinking about more acquisitions in the future.
Integration of Services and Products:
IBM offers numerous services and products to consumers. The company is undoubtedly unbeatable from hardware to software, services, and other related services.
It enables IBM to provide new services and integrated products for enterprises and customers.
Weaknesses of IBM | SWOT Analysis of IBM
As compared to other service providers, IBM services are a bit costly. It is a weak point of the company and can hurt the company’s revenue stream in the future. It will create problems for enterprises to develop reliable IT infrastructure.
IBM should address this problem in order to retain customers and enterprises. Currently, the company is struggling in this department and they can resolve it by re-pricing its services.
Dependence on Customized Products:
The dependence of IBM on customized products is another major weakness. They only provide customized products to small and large enterprises. Although it is one of the most profitable business models, this weakness can decrease profit margins. For this reason, IBM is a less desirable brand in the eyes of enterprises. Its competitors like SalesForce and Oracle give tough competition to IBM in this sector.
Opportunities for IBM | SWOT Analysis of IBM
Diversify Software Solutions and Services:
IBM has a great opportunity for expanding its business by diversifying services and software solutions. They can diversify their infrastructure, cloud, and security services along with storage, networking, and servers. These are the most profitable areas and IBM can take benefit of this factor. By growing these divisions, IBM can open the doors of various opportunities for itself.
Growing Need for Cloud-based Services:
With each passing year, cloud-based services are increasing. It is a billion-dollar segment, and IBM can earn more profits through this thing. For this purpose, the company should enhance its cloud computing services.
Threats to IBM | SWOT Analysis of IBM
There is no disbelief that the cloud computing market is flourishing quickly, but it carries some specific risks as well. It can attract newcomers in the market that can threaten IBM’s profitability and revenue stream.
Decreasing Economy Rate:
IBM is highly dependent on enterprises when it comes to sales. In case of any economic recession, it can hurt the business of IBM. Any disruption from enterprises is one of the biggest threats for the company.
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