IMPLEMENTATION PLAN
Running Head: IMPLEMENTATION PLAN: PART 3 1
Implementation Plan: Part 3
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Implementation Plan: Part 3
Internal and External Issues
IBM has both internal and external issues that support the development of the organization. These factors continue to ensure the success of the company globally. Some of the internal issues include; expertise in the production process, high-value brand, extensive intellectual property, and high economies of scale (Rowland, 2017).
IBM is considered to be among one of the most influential brands in the world of information technology. The value of the brand is supported by the popularity of the products, time effectiveness, and expertise in giving software and hardware services to customers. This factor ensures that the company attracts and retains clients for both new and current products. Another internal factor is IBM’s expertise in the production process. This is supported by the culture of innovation in the company which shapes the strategies of the company and also promotes human resources development programs. Also, the company enjoys its extensive intellectual property portfolio. The company strengthens its competitive advantage by having the highest number of patents (Rowland, 2017). Moreover, the high economies of scale ensure that the competitive advantage of the company is maintained even when the cost of producing new products is high.
On the other hand, several external issues lead to the growth of IBM. These factors are connected to changes that take place in the information technology industry. Some of the external issues associated with IBM include; business diversification in different sectors, alliance with firms from other industries and innovation of new products. IBM’s aim to diversify into other markets is directly related to its low degree of diversification. This aspect allows the company to exploit new opportunities in different markets. Additionally, IBM forms alliances with other firms due to the trends in technological integration in different markets (Rowland, 2017). For instance, most of the products made in the automotive industry are currently dependent on information technologies. Moreover, innovation is another external factor that supports the competitiveness of the company. Through this factor, IBM can research and develop expertise in creating high-quality products.
Competition
IBM faces competition from several companies in the information technology industry. Some of the key competitors are Hewlett Packard (HP), Xerox, Accenture, Oracle, SAS, among others. HP is an IT organization that develops and sells computer hardware, software, and IT solutions to large, medium-sized, and individual customers. In 2017, HP had sales of about $100 billion and market capitalization of approximately $14 billion. The company is ranked among the most valuable brands in the world. Its operations are in segments to ensure viability and efficiency in the current competitive market. Therefore, there is no doubt that HP is one of the closest competitors of IBM. Also, Xerox is another topmost IBM competitor. Towards the end of 2017, Xerox had a market capitalization of about $8 billion, and sales values of approximately $16 billion. The company is renown in providing document technology, communication supplies, and software (Bhasin, 2018). It operates through segments. For instance, the software and cloud segment is responsible for software updates, licensing, and subscription. The hardware system segment is responsible for hardware products such as storage, and repair products. Oracle has robust database management and software, which makes it be among the strongest IBM competitors.
Future Outlook for IBM
After IBM announced its earnings in 2018, analysts predict an 89.4% increase in profit in the upcoming year. Currently, IBM has trailing 12 months earnings of $5.75 billion, which is expected to rise to 10.89 billion by 2019. Analysts predict that in the next three years, IBM will have positive earnings. The growth earnings of IBM appear to be contributed by the cost-cutting activities (Wall Street, 2018). Currently, IBM has a profit margin of 7.3%, which is expected to rise by 13.8% by 2021.
Analyzing the future outlook for IBM is essential in building an investment case for stocks. For IBM, three critical factors can be examined;
Financial Health: This helps to analyze IBM’s balance sheet by looking at aspects such as leverage and risk.
Valuation: This helps to determine IBM’s current worth. In this case, analysts check if the stock is undervalued even after factoring the growth outlook into the intrinsic value (Wall Street, 2018).
Other High-Growth Alternatives: In this case, analysts look if there are other high-growth stocks that IBM could be holding.
Tools for Measuring Business Success
Business success can be measured by gathering and analyzing data. The data would then provide details about the performance of the organization. For instance, a balanced scorecard can be used to measure the success of IBM. This works by gathering reporting data from different functional databases of the firm. Input, calculations, and outputs requirements are then evaluated based on the rules identified on how data will be collected and updated (Duggan). Another tool is the business activity monitoring, which allows managers to control business operations workflow processes, including task scheduling. Moreover, organizational mission, goals, and objectives can be used to determine whether the business performance is in line with the corporate plans.
References
Bhasin, H. (2018). Top IBM competitors. Retrieved from https://www.marketing91.com/ibm-competitors/
Duggan, T. (n.d.). How to measure business performance with information technology. Retrieved from https://smallbusiness.chron.com/measure-business-performance-information-technology-805.html
Rowland, C. (2017). IBM SWOT Analysis & recommendations. Retrieved from http://panmore.com/ibm-swot-analysis-recommendations
Wall Street. (2018). What are analysts saying about the future of IBM? Retrieved from https://finance.yahoo.com/news/analysts-saying-future-international-business-124340823.html