The brief for this report Is to analyses the benefits of a potential partnership with IBM and to come to a conclusion as to whether or not to go into partnership with the company. The reason IBM is a suitable candidate for this venture is due to of its reputation for management and innovation. The company has become world famous for its success in the business to business (BIB) market, and is credited with several crucial technological innovations.
In order to critically assess the suitability off partnership we will look at a number of Important factors concerning MM, Including he company’s reputation, mall activities, ownership, current Flanagan status and relevant achievements. However, it is also necessary to look at some of the controversies as well as criticisms surrounding the company so that there is a balanced argument. Following the findings, a conclusion can be drawn to inform a strategic decision. 2. 0 Brief History, Recent News Coverage and General Reputation 2. Brief History For nearly 100 years, IBM has been working in the information-handling field, such as the recording, processing and storing of information, and pioneering information genealogy (MM, AAA). Vim’s history can be traced back to the asses, where several separate companies were formed who would later merge to form the Computer- Tabulating-Recording Company, or CTR (MM, Bibb). In the asses, MM began using their technology to design and create calculators, which, in 1944, lead to them helping with funding and building the first large-scale calculating computer which could “compute long calculations automatically”, the Mark 1 . IBM[O, n. D). However, they were refused public credit (Byron, E. Phelps). Subsequently, they decided to lid the Selective Sequence Electronic Calculator, the SEC, which was the “first large, operating, general-purpose computer to embody many of today’s programming concepts” (Byron E. Phelps, 1980). In 1953 they were able to produce their own computers commercially, with the IBM 701 EDM being the first.
In 1957, IBM led data processing In a new direction with the IBM 305 Random Access Method of Accounting and Control, the RAMAN, which was “the first computer disk storage system, which would become the industry’s basic storage medium for transaction processing” (IBM, ICC). In the early asses, the use of computers was becoming more popular with the general public, forming a market for personal computers. In 1975, after 2 years of development, IBM released the MM 5100, which was their first portable computer, meaning that the IBM brand was now entering homes (IBM[f], n. D).
In the asses, the PC revolution rocked IBM, with their customer base changing (IBM, 13th). However, in 2001, they released a new generation of servers, the server (IPPP), which catered to the new markets, supporting the growing e-business market, leading to a recovery (MM, IEEE). 2. Recent News and Reputation Since Vim’s establishment In 1911, its revolutionary technological work such as the creation of the barded, analytics software packages coupled with their expert strength of the business, resulting in its world-wide reputation for highly regarded professional technologies and advice (IBM[a] 2013).
Because of this well respected heritage, IBM has been at the forefront of the commercial sector since its establishment. Furthermore, it priorities its relationships with the public, shown through them holding 1st place in the Ethical Quote Ranking System for Corporate Social Relations, shown in a customer newsletter for IBM Pakistan (IBM[a], 2010). This shows through their commitment for providing high quality products and services to organizations, the benefits they provide such as computer systems, analytics to enhance business performance and game processing chips in consoles, have directly impacted on the consumer sector.
The reliability of Vim’s products and services have resulted in a wide range of clients ranging from the fast food restaurant conglomerate McDonald’s (IBM[b], 2010) through to Sony (MM, 2001) and Microsoft IBM[a], 2013), the developers of games consoles who run processing chips created by MM. Considering the different types of customer all three of these companies serve and remembering both Microsoft and Sony are competitors in the gaming industry, the examples given provide IBM exposure to millions of individuals every year, expressing the inevitability of its reputation for innovative solutions.
As a result of the expectations from their shareholders and customers, IBM takes extensive efforts to give back to society and care for the environment to secure the investments in and out of the company to benefit their customers. The business does this through funding projects on a global scale and empowering their employees to work within their communities to improve quality of living, showing a truly ethically aware and customer orientated organization (IBM[a], 2011). 3. Overview of main activities and recent achievement IBM is an IT based consultancy firm that provides both hardware and software products and services to various industry sectors. It aims to ‘Reduce costs. Manage risk. Optimize supply chains. Improve customer experience [and] Increase revenue’ through the use of technology (IBM[a], n. D. . However, IBM is also a firm that invests heavily in Research and Development (R) and seeks to be innovator in both hardware and software development. 3. Consulting Through Software An example of improving a service through the implementation of software is the Nationwide online banking service. Nationwide required Vim’s aid due to the increased competitiveness of the sector, IBM successfully improved Nationwide online banking service through the use of Aurora; a system for visualizing and analyzing network traffic (IBM[b], n. D. ) This is delivered through a gradual 8 week aerogramme of workshops and has taken a total of 18 months, combining inputs from both customers and staffs.
As a result, IBM was able to transform Nationwide online banking user interface and is hailed by the Head of Channel Integration of Nationwide as a “phenomenal achievement [and a] major success in every 2011) In terms of hardware development, IBM is well known in developing supercomputers; in 1997, ‘Deep Blue’ managed to beat the world champion chess player (Engaged, 2012). Carrying this legacy forward, Watson’, a supercomputer costing around El . 9 million, has the ability to evaluate around a million books. It has proven its processing power by winning against former ‘Jeopardy! Champions Brad Router and Ken Jennings; ‘Jeopardy! ‘ is a trivia based game show where contestants must answer with a question based on the clues given about the topic (BBC news, 2011). This is significant because of the complexity of the human language and the way that the show is structured. IBM is now looking into utilizing Watson incredible processing power in healthcare and finance (IBM[d], n. D). As the amount of data grows, Watson processing power will be indisputably useful for analyzing and generating useful information, by doing so, managers are able to better their decision making.
In reality, the company ended with $11. 1 billion of cash and erectable securities in 2012. As for long-term solvency, the debt-equity ratio of IBM was 1. 75, which illustrates Vim’s long-term solvency is acceptable (NASDAQ Stock Market, 13th). In summary, with the continuous growth of IBM and the attractive profitability of software and services, IBM is a financially healthy and competitive corporation. 5. 0 Conclusion & Recommendation It is beneficial to enter into a partnership with IBM due to a number of reasons.
IBM is one of the most recognized companies in the world; their business has been in operations for more than a century and has been at the forefront of computing innovation in both soft and hardware. Though their business model used to focus on hardware development, they have made a strategic business decision to tap into the software market; as a result, their business performance has made a remarkable turnaround when Serener was appointed as the new CEO in 1993 (Applegate, Austin & Collins, 2009).
It is without a doubt then, IBM has witnessed peaks and troughs throughout the years. Moreover, Vim’s performance for the first quarter of 2013 has not met expectations of the market. However, Vim’s financial performance has been rover to be sound and very stable in the past decade and the trend of its share price has a positive outlook, shown by the above graph, suggesting a further increase in the future which is favorable for the partnership.
Furthermore, IBM invests heavily into R and has a wide portfolio of goods and services but this means that they are in a number of competitive sectors. Additionally, it may require a large amount of capital to enter into a partnership, however, the returns in the long run would outweigh the initial outlay, for example, IBM has invested about $2 billion in their partners in 2011 (IBM[e], n. D. ). 6.
FUTURE PLAN apply for the IBM Partnered program – a framework for IBM to provide high quality support to our operations, and to also allow us to benefit them in the long term; bring in external expertise to further increase their corporate efficiency (MM, 2012, up. 2). Furthermore, IBM offers an ‘IBM Beacon Awards’ to their best partner (MM, 2012 up. 7), achieving this will allow us to be more recognizable in the industry thus allowing us to be more competitive and strengthening our relationship with MM. This is crucial because establishing a strategic partnership will be favorable for our company’s future.
