c




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à In 1886 Herman Hollerith, a statistician
formed the Tabulating Machine Company and
Thomas J. Watson became its leader in 1915
and made the company slogan ͞Think͟.
à It changed its name to International Business
Machines (IBM) in 1924
 ?

à During the period between 1910 and 1960, it
developed products from punch-card
tabulating machines to room-sized calculators
to mainframe computing systems for large
enterprises
à In the 1970s and 80s, IBM product lines
expanded from its traditional mainframes to
minicomputer and personal computers
 ?

à IBM introduced the ThinkPad in 1992, the first
in a series of notebook computers to be
manufactured by the company
à In 1995, IBM acquired Lotus Development
Corporation and Tivoli Systems
à In October 2002, IBM acquired PWC
Consulting and it sold the most of its hardisk
to Hitachi.
 ?

à In 2003, IBM Research launched On Demand
Innovation services
à A team who is specialize in business
transformation and technology consulting.
à Today, IBM is by far the largest information
technology in the world and the eighth largest
company in the world
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à Advanced business performance management

à Good organization culture
à Strategic outsourcing, mergers and
acquisitions
à High efficient fulfillment centre
à Flexible marketing management
à Creative services
 



à High costs in the value chain

à Possible acquisition issues
   

à Strong and stable economic market context.

à Video game console market revenue is
projected to reach $66 billion in 2012.
à High individual consumption power.
à Matured internet market.
à High level of entry barrier to the server
market.
 ?

à Customers have high experience on the service

à Customers¬ have low switching costs
à IBM has high switching costs on the core
hardware
à Intense competition
à High threat of substitutes
à Competitors are strong
à Economic fluctuation could crimp consumers͛
spending


  
 ©?

à Intensive competition
à Vulnerabilities
à Exploits and active attacks
à Viruses and other malware, spam, phishing,
and malicious web content
à High customer bargaining powers
 À©

à Excessive Amount of Hiring

à IBM has currently 366,486 employees as
compare to Microsoft 71000, HP 156000, EDS
131000.
à Around 60% of its expenses
compromise of selling and
administration
 
 
 winancial Ratios
à Debt/Equity Ratio 1

à ross Margin 45

à et Profit Margin 14
à otal Shares Outstanding 1 Billion
à Market Capitalization 158

Billion
à Earnings/Share 1
5

à Price/Earnings 1 

à Price/Book 8

à Price/Cash 

à Return on Equity 

à Return on Assets 1

à Debt/Equity 5


à nterest Coverage 5 

o
 
 À© 


Microsoft (MS)
Microsoft Corporation is a public
multinational corporation headquartered in
Redmond, Washington and USA that develops,
manufactures, licenses, and supports a wide
range of products and services.
 À© 


Hewlett-Packard
à Hewlett-Packard Company, commonly referred
to as HP, is an American multinational
information technology corporation
à HP is one of the world's largest information
technology companies and operates in nearly
every country
 À© 


Electronic Data Systems (EDS):
à Head office is in Texas and established by Ross
perot in 1962.
à EDS helps businesses process credit card
transactions, manages 65,000 servers around the
world, and provides technical support for 3
million desktop computers.
à Electronic Data Systems Corporation (EDS) is a
global technological services company that was
acquired by Hewlett-Packard (HPQ)
 BM EDS HP MS ndustry
Market $156.28B $14.11B $116.85B $281.93B $353.77M
Capital

Employees 366486 131000 156000 71000 1.74K

Revenue 92.79B 21.41B 97.06B 49.56B 456.28M
ross Margin 42.33% 13.59% 24.46% 80.66% 36.03%
et income 9.55B 631M 6.39B 13.86B -218.03K
EPS 6.262 1.156 2.295 1.382
P/E 16.81 23.99 19.44 21.32 19.44S
Operating in Over 170 64 Over 100 Over 150
Countries

Business 3 2 3 4
Segments
© 



 
 
:
à Firing of insufficient employees
à Give incentives satisfy and motivate current
employees and hire more competent
employees(think tank)
à Do related and unrelated diversification to
capture more market share.
à Offer low prices to attract more customers

 
 

à Do joint ventures to be financially more strong
à Collaboration with suppliers ( for innovation)
à Offer long years warranties and guaranties.( to
satisfy customers)
à Do corporate social responsibilities to enhance
its image among customers
 ÀÀ

IBM has come a long way in its efforts to
transform itself in to an innovation driven
integrated global company as it seeks to
pursue value added businesses and services
that will generate high value for its customers
and high profits for its share holders.