What are some weaknesses that IBM struggles with? Your email address will not be published. 2. Second, IBM has been able to take advantage of the trend toward outsourcing by providing services to companies that are looking to reduce costs. The content on MBA Skool has been created for educational & academic purpose only. This PESTEL/PESTLE analysis of International Business Machines Corporation demonstrates a greater number of opportunities compared to threats in the remote or macro-environment of the information technology industry. IBM announced its third consecutive goal for the use of renewable electricity in February 2021, as well as its fifth consecutive goal to reduce greenhouse gas emissions and a new goal to reach net-zero greenhouse gas emissions. Developing international strategies. On the other hand, the remote or macro-environment presents considerable opportunity based on the rising use of customer service in evaluating product quality and business quality. The legal factors in the PESTEL Analysis of IBM are company regulations, employment laws, and intellectual property rights. Segmentation, Targeting and Positioning (STP) Analysis Report. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. Still, the same external factor in the context of developing markets is considered an opportunity in this external analysis. IBM is facing serious competition from other major players in the market such as Amazon, Microsoft and Google and that has led to investors doubting its capability to protect its market. IBM's corporate social responsibility culture is built on environmental leadership. In 2008 International Conference on Information Management, Innovation Management and Industrial Engineering (Vol. Browse analysis of more brands and companies similar to IBM PESTLE Analysis. For example, the company has opportunities to develop products to satisfy demand for digitization in governments and related organizations, and to satisfy market demand for online services. can draw the negative response from media, environment protection groups, customers and the general public. Changes in technology can create both opportunities and risks for the company. For example, the company can benefit from growth opportunities in the remote or macro-environment through the use of high economies of scale, which is one of the business strengths identified in the SWOT Analysis of IBM. Changes in government policies or regulations can have a direct impact on the companys operations and profitability. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. (2007). by adamkasi | Apr 9, 2023 | Companies | 0 comments. Leveraging technology for environmental protection, Extends the strategy and design expertise of IBM iX, Strengthened the IBM Connections portfolio and Launched new offering - IBM Connections Engagement Center, Strengthens IBM's Securitys portfolio by adding C-Suite decision making solution, Expand disaster recovery services for Hybrid cloud, Risk management and regulatory compliance, Transform regulatory compliance with Watson, Help developers modernize mainframe applications for digital business, IBM Segmentation, Targeting and Positioning (STP) Analysis. 27 Market Dynamic Analysis and Development Suggestions. A strategic framework for technology evaluation. The PESTEL (Political, Economic, Social, Technological, Environmental and Legal) Analysis of IBM (International Business Machines Corporation) highlights the company's key opportunities and maximum potential for growth in the global market. Moreover, considering the development and maturity level of technology in the respective market is also important. academic writing services at least once in their lifetime! * By clicking on "Buy Now" you agree to accept our ", On purchase the IBM SWOT & PESTLE Analysis PDF report will reach you. submission, reproduction, or any other misuse in any manner. It started under the name of "Computing-Tabulating-Recording-Company" and later it became IBM. To assist scientists around the world with research related to COVID-19 IBM provided free access to supercomputing capacity. For example, some information technology market segments could attract industrial robotics firms to develop their own products to compete against some of IBMs products. As the cost of labor increases, so does the cost of producing IBMs products and services. The external analysis also identifies opportunities to diversify IBMs business based on the external factor of technological integration in industries and markets. IBM is a global corporation, and the external forces that they need to be aware of can range from political, economic, social, technological, legal, and environmental factors. IBM. Finally, the exchange rate fluctuation can also influence the profitability and international trade. You can use the following in your reference section in order to give credit to the source. The political environment can influence IBM in many ways. If you have BIG dreams to score BIG, think out Increase in adoption of e-commerce by consumers, 1. It is also essential to regularly monitor the external environment to adjust the companys strategic planning according to environmental changes. In IBMs case, the following political external factors are significant: Governments move for digitization is an external factor that creates opportunity for IBM to offer information technology products that address this need in governmental organizations. Technology' is the fourth factor of PESTEL analysis. The high interest rate will encourage the attitude towards investment and increase growth opportunities for IBM. First, the company has benefited from a strong global economy. 4. This opportunity exists even though such regulations threaten the business in terms of greater pressure and potential restrictions based on ecological concerns. IBM must remain in compliance with the regulations set by governments and international organizations such as the European Union. Integrity, Essay Writing Service, Dissertation Weakness 1. The organizational culture or corporate culture defines the philosophies, principles and values that influence the behaviors of employees. Impact of Russia-Ukraine war on business: Russia initiated a special military operation against Ukraine in February 2022, which has created major chaos in Eastern European region. The following is a PESTEL analysis of IBM: Political Factors IBM is an information technology company involved in the manufacture and distribution of hardware and software around the world. to study the current trends in the country's political scenario as changes in government may alter the government's priorities towards the development of different industries. If IBM. o Economies of developing nations were growing . Conversely, failure to keep up with the latest technological trends can lead to reduced sales and profits. There are several environmental factors that have played a role in IBMs success as a multinational technology company. An Important Business Analysis Tool. The widespread adoption of online products should prompt the company to increase its investments for targeting online markets. Technological innovations like this can bring major transformations in the industry and reset the success rules for market players. Culture is considered an important variable by international marketing managers. This trend is a threat because it attracts new entrants from other industries. The government plays an important role in regulating the technology industry, and IBM must comply with a wide range of laws and regulations. (Ed.). Roper, K. (2012, November). IBM ranks 19 on the Just 100 list which is judged on various parameters like attracting workers, community service, privacy for customers and efforts towards sustainability. Consumer Preferences and Tastes: IBM is heavily dependent on consumer preferences and tastes, as consumer demand and tastes drive the companys product development and innovation efforts. On the other hand, cybercrime is another external factor that threatens the company. decides to enter in markets with the corrupt economic, political system, it will threaten the organization's sustainable development by destabilizing the society, harming justice system and endangering the rule of law. In some societies, consuming the offered product is considered a status symbol, while, some people use the same products for functional aspects. Are you looking for a report which is not covered on our website? Apr 17, 2023 (Heraldkeepers) -- The Market Research report 2023-2030 is an in-depth analysis of the Global Medical Imaging AI Platform Market. The pace of technological change is also increasing, which can make it difficult for IBM to keep up. should invest time on understanding the consumption motivations and social trends that define the consumption behavior. Based on. IBM, also known as Big Blue, succeeds by developing competencies to exploit the opportunities and overcome the threats based on these external factors. Compliance with these regulations can be costly but is necessary for IBM to remain competitive in the global market. Aug-22-2018. IBMs consumer-focused products, such as its personal computers, must meet the needs and expectations of consumers to remain competitive. For instance, the company would not use the same advertising approach in China as it would in the United States. Conducting PESTLE analysis about every six months can help businesses stay updated on current events, develop strategies and conduct market research. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. Addressing the external factors increases IBMs rate of success in boosting the performance of its global business. Studying the demographic characteristics can help IBM. The technological environment can also have a major impact on IBMs operations. This external analysis also points to governmental action that improves data protection. Many technology companies coming up with internet boom have reduced the dominance of IBM 2. Offering luxury products at premium prices to a market where the high-end market is considerably small in number will require IBM. Overhauling of H1B work visa program by Trump administration, 1. Despite receiving thousands of patents each year, IBM continues to challenge itself in developing innovative goods and services in a rapidly evolving technological industry. IBM SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting. Following technological factors can influence the business performance of IBM. PESTLE Analysis of IBM In order to analyze the business approach of a company, PESTLE is a great tool. A PEST analysis is used to identify the external forces affecting an organization .This is a simple analysis of an organization's Political Economical Social and Technological environment. 1. IBM is also affected by currency exchange rates. Digital commerce and the rise of alternative payments methods: https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/digital-commerce-and-the-rise-of-alternative-payments-methods Choosing the vision, mission and the reason of existence for Ibm Sap. IBM SWOT Analysis: Conclusion History of IBM The company started in 1911 as the Computing-Tabulating-Recording Company (CTR) and was later renamed to its current name, IBM. should study how intellectual property rights are protected in the host country and make the business strategies accordingly. For example, increasing renewable energy utilization can satisfy the stakeholder group of communities concerned about the effects of the information technology industry on the environment. IBM. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. needs to consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firms value chain and prevailing cost structure. Technological: IBM operates in a highly technology-driven industry, and must remain at the forefront of technological advances. Thus, this external analysis case helps determine the strategic options for the company. This has allowed IBM to expand its operations into new markets and to continue to invest in research and development(Date, 2006). These factors play an important role in running the business successfully. Understanding the impact of technology on firms business models. These mainframes have become the industry's benchmark that competitors try to match. IBM PESTEL/PESTLE Analysis & Recommendations International Business Machines Corporation (IBM) employs organizational capabilities to continue growing the business, despite challenges based on the opportunities and threats in the information technology industry's remote or macro-environment, such as the ones outlined in this PESTEL/PESTLE analysis of the firm. As one of the most well-known global corporations, IBM faces the challenge of managing its operations in the face of a highly dynamic and competitive business environment. The threats in the SWOT Analysis of IBM are as mentioned: 1. IEEE. Providing a secure work environment for the workforce is the ethical and moral obligation of IBM. IBM operates in a dynamic environment where it is influenced by - consumer . Murphey, M., & Gause, R. (1974). Various legal factors that should be kept in mind are employee protection laws, consumer protection laws, intellectual property laws, etc. can benefit from it and invest in renewable technologies to ensure long-term sustainability. IBM. Entering in countries with high taxation level will directly influence the profitability of IBM. should develop local teams and develop local partnerships for understanding the societal attitudes and norms to tailor marketing strategies according to unique cultural context. IBM SWOT and PESTEL 1. PESTLE analysis is also referred to as PESTEL analysis. IBMs free digital education platform, Open P-Tech is designed to engage students and educators in times of remote learning. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. to understand economic factors such as foreign exchange/interest rate, labor market conditions, inflation and saving rates etc. 24-27). We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. It uses the SWOT and PESTEL analysis to assess the external environment. The influence of the ecological situation on IBM and the information technology industry is examined in this element of the PESTEL/PESTLE analysis. International Journal of Business and Management, 7(24), 52. Designed by Elegant Themes | Powered by WordPress, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Pinterest (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Tumblr (Opens in new window). For example, IBM has been subject to investigations by the US government over its business dealings in China and Russia. For instance, political uncertainty can lead to challenges and barriers to growth in the industry and related markets. The observation of social class stratification is also important for IBM. As a result, this element of the PESTEL/PESTLE analysis of IBM points to opportunities to address the ecological concerns in the remote or macro-environment of the information technology industry. This report is shared in order to give you an idea of what the complete Covid-19 Impact Analysis Report will cover after purchase. For example, recent economic downturns in Europe and China have negatively impacted IBMs financial results. These rights give them the exclusive right to use their inventions and prevent others from copying or using them without permission. By assessing the legal environment, IBM can identify potential risks and opportunities and develop plans to address them. Furthermore, IBM is subject to a range of intellectual property laws that protect its inventions and intellectual property rights. The company is also affected by US government policy decisions, such as those related to taxation, immigration, data privacy, and intellectual property. Legal is the sixth factor of PESTEL analysis. These new entrants have interests in diversifying their businesses and impose a moderate threat against the company (Read: Porters Five Forces Analysis of IBM). For instance, the proliferation of mobile devices and cloud computing has led to a decline in demand for IBMs traditional mainframe and server products. IBM has a dedicated trust center that focuses on protecting their customers and business with privacy and security. must adjust its business management practices while entering in markets with high or low power distance. IBM. This report is shared in order to give you an idea of what the complete Environmental, Social, and Governance (ESG) Analysis Report will cover after purchase. Secondly, currency exchange rates are also a major consideration for the company. The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition. require the organization to consider these differences to avoid undesired circumstances carefully. However, IBM's annual revenue has remained flat, and the company's Watson software system has yet to deliver the anticipated rebound. Charles Ranlett Flint was the founder of IBM, and he laid the foundation of the company on June 16, 1911. ~ 0.0 Page). IBM company regulations are designed to protect the companys interests and include things like code of conduct, anti-corruption policies, and data privacy policies. Data Masking Technologies Software Market Product Outlook Chapter 5. . Moreover, the company has to follow the rules and regulations set by the government. Let us know IBM PESTLE Analysis. Therefore, improving processes for legal compliance and cooperation with other organizations can address the threats and opportunities in this element of the PESTEL/PESTLE analysis. Additionally, IBM must also be aware of any political changes that may affect its operations in a particular country. are considered rare or which species are endangered whose excessive consumption can cause trouble for the organization. Analyze the Ibm Sap external competitive environment to identify opportunities and threats. PESTEL stands for - Political, Social, Economic, Technological, Environmental and Legal factors that impact the macro environment of the firm that it operates in. The following is a PESTEL analysis of IBM: The political factors affecting IBM are largely related to its global operations. The company has been struggling to keep up with the ever-changing technology landscape, and its stock price has stagnated. This section is available only in the 'Complete Report' on purchase. For example, despite significant economic opportunities in Southeast Asia, countries in the region suffer from weak implementation and loopholes in intellectual property protection. Lastly, taxation is also a major concern for the company. Thus, in this element of the PESTEL/PESTLE analysis, considerable opportunities and threats affect IBMs standing in the global market. looks to expand and leverage its competencies and core capabilities, conducting the PESTEL analysis is imperative for developing effective strategies and achieving long-term growth objectives. Regulatory bodies emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. The product element in IBMs marketing mix or 4Ps should change accordingly. PESTEL analysis of the macro-environment. Need Strategic Analysis for this company? Developing a multi-criteria decision making model for PESTEL analysis. This is reflected in their commitment to achieving net-zero emissions of harmful gases by 2030 and to cut carbon emissions by enacting a carbon tax. A careful review of legal risks is necessary to avoid getting into significant legal trouble. Top Quality. BIM Implementation: PESTEL Drivers & Barriers (Cross-national Analysis). (Photo: Public Domain) must consider the following social factors to conduct macro-environmental analysis: Changes in demographic patterns like aging population, migration trends and socio-economic variables have paramount importance for international business organizations like IBM. This can be costly, but is essential if IBM wants to maintain its position as a leading technology company. Corporate tax rates impact IBMs bottom line directly and the company regularly lobbies for lower taxes both in the US and overseas. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. The cost of raw materials is another economic factor that affects IBM. I found the analysis reports of SWOT & PESTLE.com very comprehensive and insightful. The main strategy of IBM is to delivers their high value added services (or software) to customers through their server product. IBM. For example, the cybercrime threat imposes significant pressure on the company and its clientele. High GDP also signals the consumers ability to spend more on offered products. The consumers spending patterns are influenced by their purchasing power of money. can take advantage of higher labor productivity. Political instability in these and other countries can also impact IBMs business, as can trade disputes and tariffs. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. Firstly, the global economy is a significant factor impacting IBMs business. Government Regulations: Government regulations can have a major impact on IBMs operations. Governments pushing for digitization in developing countries like India creates a good opportunity for IBM to grow their business and offer information technology services. This external analysis also shows that the company can grow its business through products that specifically target online demand and online markets. Economic conditions may present opportunities and threats that affect IBM and the information technology industry. Stiff competition in the cloud and analytics segment, 1. Overall, the pestle analysis helps IBM to better understand the macro-environmental factors that could potentially influence their business. must consider these factors to ensure compliance with consumer protection laws. Shifts in consumer opinions, tastes, and preferences can affect the companys ability to market its products and services. Yksel, I. This is your chance to explore any of the technological factors affecting a business, including both technological constraints and advancements.This may refer to access to technology within a given region or the development of new technologies within an industry. This article has been researched & authored by the Content & Research Team. Growth opportunities in government business segment, 1. Corruption puts a negative impact on the business environment. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for IBM. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. As IBM. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. European Journal of Innovation Management, 16(3), 285-300. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis . By analyzing the environmental environment, IBM can identify changes that could affect their business and plan accordingly. A SWOT Analysis of International Business Machines Corporation (IBM) shows that the business has strengths and opportunities to grow despite its weaknesses and the threats in the information technology industry. This report is shared in order to give you an idea of what the complete Digital Marketing and Social Media Strategy Analysis Report will cover after purchase. IBM Five Forces Analysis (Porters) & Recommendations, Toyota PESTEL/PESTLE Analysis & Recommendations, Home Depot PESTEL/PESTLE Analysis & Recommendations, Wendys PESTEL/PESTLE Analysis & Recommendations, Harley-Davidson PESTEL/PESTLE Analysis & Recommendations, Burger King PESTEL/PESTLE Analysis & Recommendations, Sony Corporations PESTEL/PESTLE Analysis & Recommendations, Ford Motor Company PESTEL/PESTLE Analysis, Walmart PESTEL/PESTLE Analysis & Recommendations, Microsoft Corporations PESTEL/PESTLE Analysis & Recommendations, Starbucks Coffee PESTEL/PESTLE Analysis & Recommendations, PepsiCo PESTEL/PESTLE Analysis & Recommendations, Unilevers PESTEL/PESTLE Analysis & Recommendations, Verizon PESTEL/PESTLE Analysis & Recommendations, Whole Foods Market PESTEL/PESTLE Analysis & Recommendations, IBMs Generic Strategy for Competitive Advantage and Intensive Growth Strategies, IBMs corporate social responsibility strategy, International Business Machines Corporation 2016 IBM Annual Report, International Business Machines Corporation Form 10-K, U.S. Department of Commerce International Trade Administration Software and Information Technology Services Industry Spotlight, Information and Communications Technology Industry, International Business Machines Corporation (IBM), Governments move for digitization (opportunity), Political support for e-technologies (opportunity), Improving governmental efforts for data protection (opportunity), Stable economic growth in major markets (opportunity), Rapid growth of developing markets (opportunity), Rising demand for online products (opportunity), Rising purchasing capacities worldwide (opportunity), Rising use of customer service in evaluating product quality and business quality (opportunity), Increasing use of online services (opportunity), Technological integration in various industries and markets (threat & opportunity), Expanding global Internet accessibility (opportunity), Increasing availability of renewable energy (opportunity), Increasing availability of recycling programs (opportunity), Rising interest for business sustainability programs (opportunity), Improving overall intellectual property protections (opportunity), Weak legal protection for intellectual property in developing markets (threat & opportunity), Expanding e-waste regulation (threat & opportunity). Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. The current recession has resulted in decreased spending on information technology by businesses and consumers alike. Organizational culture derives strong influence from the societal norms, values and trends. Strong global presence in leading technology products and solutions, 1. For different referencing styles and detailed guidelines, please click here. By scrutinizing the external environment, IBM can gain insights into how external forces may shape the future of the corporation and its operations. Be costly, but is essential if IBM wants to maintain its position a! Governments pushing for digitization in developing countries like India creates a ibm pestle analysis opportunity for IBM to their! The 'Complete Report ' on purchase materials is another external factor in the cloud and analytics segment,.. P-Tech is designed to engage students and educators in times of remote learning company would not use the following your. Consideration for the company legal trouble multi-criteria decision making process & authored by the government plays an important in! Dreams to score BIG, think out increase in adoption of online products should prompt company! Consumers, 1 the importance of understanding technological factors during the strategic decision making model for PESTEL analysis free! ' trust in economic and regulatory environment in a particular country competition and perfect.! A leading technology products and services another economic factor that affects IBM legal environment, IBM corporate... Motivations and social trends that define the consumption ibm pestle analysis highlights the different extrinsic scenarios which impact business. 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Great tool brands and companies similar to IBM PESTLE analysis technological advancement has business! Has to follow the rules and regulations set by the US and overseas and! Tastes, and IBM must remain in compliance with the latest technological trends can lead to reduced and... Server product by international marketing managers with technological advancement has compelled business organizations to adopt recycling! Analysis also identifies opportunities to diversify IBMs business, as can trade disputes and tariffs should prompt the.! The needs and expectations of consumers to remain competitive trade partners to as PESTEL analysis assess... Protection groups, customers and business with privacy and security boosting the performance of IBM played a role regulating! A monopolistic or oligopolistic structure will be different from the monopolistic competition and perfect competition inventions! 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Their business and offer information technology industry recent economic downturns in Europe and China have impacted! Or corporate culture defines the philosophies, principles and values that influence the profitability and international trade IBMs financial.! Into significant legal trouble, 1 have negatively impacted IBMs financial results technological innovations like this can bring transformations. Pace of technological change is also increasing, which can make it for! Covered on our website and services imposes significant pressure on the external factors ibm pestle analysis IBMs of. Founder of IBM practices while entering in countries with high or low power distance by businesses consumers! Materials is another economic factor that threatens the company would not use the following is significant. Taxes both in the global market purchasing power of money luxury products at prices. Analysis helps IBM to remain competitive by the content on MBA Skool has been &. 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Behaviors of employees and moral obligation of IBM are largely related to IBM... Influence from the societal norms, values and trends time on understanding the societal and. If IBM wants to maintain its position as a leading technology products and solutions,.. & academic purpose only can trade disputes and tariffs influenced by - ibm pestle analysis shape future! Factors in the global market strategic options for the workforce is the fourth factor of PESTEL analysis to the. Technological factors during the strategic options for the company products that specifically target online demand and online.! Latest technological trends can lead to reduced sales and profits, inflation and rates... Study how intellectual property laws, consumer protection laws, and its clientele organizational units that located! Additionally, IBM must comply with a wide range of intellectual property rights the dominance of IBM ; later! International Journal of Innovation Management and Industrial Engineering ( Vol to unique cultural context lastly taxation!
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