For instance, political uncertainty can lead to challenges and barriers to growth in the industry and related markets. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to IBM. Weakness 1. 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). can increase the market share by focusing on emerging technological innovations. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis . In this external analysis, the following are the intensities of the external factors that maintain the moderate force of the bargaining power of IBM's suppliers: High overall supply (weak force) Moderate size of individual suppliers (moderate force) Low ability to substitute supply (strong force) must adjust its business management practices while entering in markets with high or low power distance. (2012). This report is shared in order to give you an idea of what the complete Value Chain Analysis Report will cover after purchase. (Ed.). Developing a multi-criteria decision making model for PESTEL analysis. The presence at international stage increases the companys sensitivity to changes in political environments of different countries. IBM. Legal is the sixth factor of PESTEL analysis. IBM, also known as Big Blue, succeeds by developing competencies to exploit the opportunities and overcome the threats based on these external factors. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. This threat comes in the form of potential cyber attacks on online infrastructure. design effective marketing messages and fulfil corporate objectives through informed PESTEL analysis. The political environment can influence IBM in many ways. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. For instance, the proliferation of mobile devices and cloud computing has led to a decline in demand for IBMs traditional mainframe and server products. : The development of information and communication technologies has led towards the adoption of innovative marketing techniques to enhance collaboration with customers. 27.1 Market Drivers. This report is shared in order to give you an idea of what the complete Competitor Analysis Report will cover after purchase. Changes in technology can create both opportunities and risks for the company. This article is only an example Factors such as inflation, exchange rates, and economic growth can have a major impact on IBMs operations. European Journal of Innovation Management, 16(3), 285-300. Today, new products are developed quickly, and supply chain partners have also gained more power. Twenty years of work and family at International Business Machines Corporation. High taxation affects international trade and prevents exports. The content on MBA Skool has been created for educational & academic purpose only. Thus, this external analysis case helps determine the strategic options for the company. Technology integration initiatives across industries, 1. Second, IBM has been able to take advantage of the trend toward outsourcing by providing services to companies that are looking to reduce costs. 1, pp. Technological. And it can be divided into 4 pieces as follows: 1) Reallocating resources to enhance their server product business and reduce operation costs and optimize the efficiency. Paying careful attention to PESTLE factors can also enable businesses to improve their products and services to meet customers' needs. In such an environment, IBM. Strategy planning process often requires five steps -. This trend is a threat because it attracts new entrants from other industries. What are some of the strengths that IBM has? The economic factors affecting IBM are numerous. IBM holds a large number of patents, trademarks, and copyrights, and must ensure that these are protected from unauthorized use or infringement. High unemployment signals the availability of surplus labor at comparatively lower wages. The high interest rate will encourage the attitude towards investment and increase growth opportunities for IBM. IBM also worked on manufacturing the Summit, an analysis of a companys strengths, weaknesses, opportunities, and threats, What is PESTLE Analysis? Determinants for effective information technology outsourcing: a case of international business machines corporation Kenya (Doctoral dissertation). (2007). The organization, with its long history going back to the nineteenth century, is one of the few Information Techniques. can benefit from it and invest in renewable technologies to ensure long-term sustainability. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. By assessing the legal environment, IBM can identify potential risks and opportunities and develop plans to address them. New technologies can provide IBM with new opportunities to grow and expand its businesses. In 2021, the annual expenditure was $6.567 billion. In addition to these laws, IBM is subject to the laws of the jurisdictions in which it does business. (2009). The names and other brand information used in the PESTLE Analysis section are properties of their respective companies. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of IBM. Group, 73600, V09042019. This report is shared in order to give you an idea of what the complete Ansoff Matrix Analysis Report will cover after purchase. Moreover, considering the development and maturity level of technology in the respective market is also important. Ranging from political factors to environmental factors, each factor comprises various variables that influence the strategic decision making process of business organizations like IBM. PESTEL Analysis Chater 4. By analyzing the political environment, IBM can identify changes that could affect their business and plan accordingly. There are several environmental factors that have played a role in IBMs success as a multinational technology company. Hou, J., Lu, Q., & Han, Y. For example, despite significant economic opportunities in Southeast Asia, countries in the region suffer from weak implementation and loopholes in intellectual property protection. in choosing the right market segment/segments with high growth potential. 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 subsidiary Red Hat has discontinued sales, services and partner relationships for organizations located or headquartered in Russia and Belarus. The organization should also carefully consider the interest rate and its influence on borrowing ability and attitude towards investment. Murphey, M., & Gause, R. (1974). IBM top brass accused again of using mainframes to prop up Watson, cloud sales - https://www.theregister.com/2023/01/18/ibm_sued_securities_fraud/ The company must tailor its products and services to meet the needs of the various markets it operates in. The application of PESTEL analysis can help IBM. Top Quality. Additionally, the company is subject to the economic cycles of the markets where it operates, which may affect its sales and profits.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[580,400],'howigotjob_com-medrectangle-4','ezslot_4',193,'0','0'])};__ez_fad_position('div-gpt-ad-howigotjob_com-medrectangle-4-0'); Social: IBM is a global company and must be prepared to address the social needs of the markets in which it operates. Based on. Springer Berlin Heidelberg. Warning! Shifts in consumer opinions, tastes, and preferences can affect the companys ability to market its products and services. Need Strategic Analysis for this company? The cost of raw materials is another economic factor that affects IBM. IBM. Conversely, failure to keep up with the latest technological trends can lead to reduced sales and profits. 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 industrys remote or macro-environment, such as the ones outlined in this PESTEL/PESTLE analysis of the firm. Chat with us Aithal, P. S. (2017). IBM PESTEL/PESTLE Analysis & Recommendations IBM's office building in Bratislava, Slovakia. 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. For example, higher sales revenues are expectable, as target customers are increasingly capable of purchasing information technology products from the company. 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. In recent years, IBM has been facing a number of challenges. are influenced by the prevailing economic structure. Technological change can impact IBM in a number of ways. Political factors can range from government regulations and policies to international trade agreements and foreign relations. (2014). The consumers spending patterns are influenced by their purchasing power of money. Hill, E. J., Jackson, A. 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. PESTLE Analysis of IBM examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The marketing department of IBM. Following technological factors can influence the business performance of IBM. IBM believes their greatest asset to be their employees and puts strong efforts into diversifying the workforce and it also encourages creativity outside work. Concerns over confidential information of users being vulnerable to leaks 3. You can use the following in your reference section in order to give credit to the source. In some countries, recycling has almost become a business norm. can leverage the opportunities offered by social media marketing to improve business performance. This section covers many brands and companies. Revista ESPACIOS, 39(16). Offering luxury products at premium prices to a market where the high-end market is considerably small in number will require IBM. IBM has always lefts its remarks in the technology sector with its excellent innovation, research, and development. These factors play an important role in running the business successfully. IBM. Holistic Analysis 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 The economic environment can also have a significant impact on IBMs operations. IBM's global presence necessitates careful consideration of these variances to avoid unfavorable situations. Increasingly stringent regulations for e-waste, 1. In order to turn things around, IBM needs to take a close look at the macro environmental factors affecting its business. Keep it up! Related: Macroeconomic Factors: How They Impact the Economy Sustainable business strategies and PESTEL framework. This report is shared in order to give you an idea of what the complete Risk Analysis Report will cover after purchase. The observation of social class stratification is also important for IBM. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. GSTF International Journal on Computing, 1(1), 73-80. By analyzing the environmental environment, IBM can identify changes that could affect their business and plan accordingly. American Behavioral Scientist, 49(9), 1165-1183. What are some opportunities that IBM can benefit from? These laws can dictate things like minimum wage, hours of work, and health and safety standards. This report is shared in order to give you an idea of what the complete Segmentation, Targeting and Positioning (STP) Analysis Report will cover after purchase. Check your email Mugwe, C. W. (2014). While the operations in Ukraine offices have been impacted, the companys operations IBM has also ceased their operations in Russia due to the start of military operation in Ukraine. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. Similarly, market segmentation based on social class may be ineffective where social class stratification is low. Copyright 2023.