24

Part-01
Introduction

1.1.

Background of the Study

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It has become indispensable for every person to have some thought on the IBM course of action.
As our educational system predominantly text based, inclusion of practical orientation program is
an exception to the norm. From practical knowledge, we will be able to know real life situations
and start a career with some practical experience. Bachelor of Business Administration (BBA) is
a professional course. As a student of BBA with the requirement of my course I was assigned to
IBM. In such state of affairs the present aiming at analyzing the experience of practical
orientation related to an appraisal of and my report topic has been selected as IBM
Basically, this report is highlighted on overview IBM, Structure, Analysis, Present status, Experience,
Recommendation and conclusion.

An important partial requirement of four years BBA graduation program. This is because knowledge and
learning become perfect when it is associated with theory and practice. Students can establish contacts and
networking. Contacts may help to get a job in practical life. That is, student can train and prepare
themselves for the job market. A poor country like Bangladesh has an overwhelming number of
unemployed educated graduates. As they have no experience they have not been able to gain normal
professional experience of establish networking system, which is important in getting a job. Therefore, it
is obvious that the significance of clearly justified as the crucial requirement of four years BBA
graduation.

1.2.

Scope of the Report

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As I was assigned to the IBM there is enough scope of the study. The report covers the topic IBM focuses
on supply Chain Drivers and Obstacles. To conduct a study, IBM. I have gathered valuable information
from books and I have also got some information from website.
This report is only done for gathering information about supply Chain Drivers and Obstacles as well as the
performance of sanctioning position while ignoring any other department of the industry.
1.3.

Objectives of the Study

1.3.1. General objective

The prime objective of this report is to analyze the IBM.

1.3.2. Specific objectives

The study was conducted to achieve the following secondary objectives-

Wide product assortment

IBM Collections target a wide range of customers and offer an excellent price-quality ratio.
IBMs exclusive models along with national and international brands are carefully selected and
updated in response to market demand.
Personalized service
Qualified and enthusiastic sales associates who take customers satisfaction to heart. In many
countries customer service goes beyond the stores with home deliveries, orders made possible via
catalogues, the web or even call centers.
Clear product merchandising
Easy-to-shop store layout with clear product display by category and by style.
Guaranteed customer satisfaction
In any IBM in the world we repair, exchange or refund any products with defects. We exchange
or refund on unworn merchandise if you change your mind..

1.4.

Methodology of the study

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Methods followed to perform a job or conducting activities to complete a task is called methodology. In
conducting this study the following methodology was adopted in collecting data & information,
preparation of reports etc. The methodology of report is given below:

1.4.1. Type of Research

In this report we will describe the Loan bata shoe Ltd, by Time series analysis, recovery rate analysis,. So,
according to the base of objective this research is called descriptive research.
1.4.2.

Data collection

Primary sources
Secondary sources
1.4.2.1. Primary

sources of data include the following:.

Conversation with the clients.
Observation
Informal discussion

1.4.2.2.

Secondary sources of data including the following:

Annual report of IBM (2010 to 2011).
Unpublished data from the company.
Company training book.
Study of different files of different section of the IBM.
Some access to the database.
Monthly statement of the organization.

1.5.3.1. Data collection procedure and instruments

Conducting this research project the following procedures has been used to collect data with the respective
instruments.

1.5.3.2. Collection of primary data

For collecting primary data personal interview technique has been used through a set of small ranged and
unstructured informal ways have been used as the instruments.

24
1.5.3.3. Collection of Secondary Data
In order to collect the secondary data different related printed materials like Annual Report, monthly
statement of the company, website, company training guide has been used. Moreover, various library
sources and textbooks also have been used as secondary sources of collecting early mentioned data and
information.

1.5.4 Data Analysis & reporting

After collecting all the data, they will be coded and data will be processed, graphically represented using
MS Excel and MS Word.

1.6. Limitations of the study

There are some limitations of the report and therefore it may lack some crucial data. In preparing the
report I faced some problems, which are as follows:
The main constrain of the study was insufficiency of information, which was
required for the study. There are various information the company employee cant
provide due to security and other corporate obligations.
Due to time limitation many of the aspects could not be discussed in the present
report. Learning all the functions within just 90 days is really tough.
Since the company personnel were very busy, they could not provide enough time to
me. Lack of opportunity to visit more than one firms.
Data and information used in this study are mostly from secondary sources.
Large scale research was not possible due to constraints and restrictions posed by the
organization.
For Strategic and Competitive position of the company, it refuses to disclose
sophisticated information which might make the report more worthy.
The functions and activities of IBM are too vast, so they change their strategy day by
day. As a result, I cant collect update information & strategy.

1.7. Sampling Technique:

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1.7.1: Population:
1.7.2: Sample elements/units:
Individuals customer.

1.7.3: Sample frame:

Organizations dont provide me due to secrecy.

1.7.4: Sampling procedure: no probability convinces sampling needs.

1.7.5: Sample size: 30

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Part-02
An Overview of the company/company profile

2.1 Profile
In 1937, IBM's tabulating equipment enabled organizations to process unprecedented amounts of
data, its clients including the U.S. Government , during its first effort to maintain the employment
records for 26 million people pursuant to the Social Security Act ,[23] and the Third Reich ,[24] largely
through the German subsidiary Decoma . During the Second World War the company produced

24
small arms for the American war effort (M1
opened its first office in Bahrain.[25]

Carbine ,

and

Browning automatic rifle ).

In 1947, IBM

In 1952, Thomas J. Watson, Jr., became president of the company, ending almost 40 years of
leadership by his father. In 1956, Arthur L. Samuel of IBM's Poughkeepsie, New York, laboratory
programmed an IBM 704 to play checkers using a method in which the machine can "learn" from
its own experience. It is believed to be the first "self-learning" program, a demonstration of the
concept of artificial intelligence . In 1957, IBM developed the FORTRAN (Formula Translation)
scientific programming language. In 1961, Thomas J. Watson, Jr., was elected chairman of the
board and Albert L. Williams became president of the company. IBM develops the SABRE (SemiAutomatic Business-Related Environment) reservation system for American Airlines. The IBM
Electric typewriter was a highly successful model line of electric typewriters introduced by IBM
on July 31, 1961.
In 1963, IBM employees and computers helped NASA track the orbital flight of the Mercury
astronauts, and a year later, the company moved its corporate headquarters from New York City
to Armonk, New York. The latter half of that decade saw IBM continue its support of space
exploration, with IBM participating in the 1965 Gemini flights, the 1966 Saturn flights, and the
1969 mission to land a man on the moon.
On April 7, 1964 IBM announced the first computer system family, the IBM System/360 . Sold
between 1964 and 1978, it was the first family of computers designed to cover the complete
range of applications, from small to large, both commercial and scientific. For the first time,
companies could upgrade their computing capabilities with a new model without rewriting their
applications.
In 1974, IBM engineer George M. Laurer developed the Universal Product Code .[26] On October 11,
1973, IBM introduced the IBM 3660, a laser-scanning point-of-sale barcode reader which would
become the workhorse of retail checkouts. On June 26, 1974, at Marsh's supermarket in Troy,
Ohio, a pack of Wrigley's Juicy Fruit chewing gum was the first-ever product scanned. That pack is
now on display at the Smithsonian Institutions National Museum of American History in Washington,
D.C.

IBM's Blue

Gene

supercomputers were awarded the National

on September 18, 2009.

Medal of Technology and Innovation

by

U.S. President Barack Obama

In the late 1970s, IBM underwent some internal convulsions between those in management
wanting to concentrate on their bread-and-butter mainframe business, and those wanting the
company to invest heavily in the emerging personal computer industry.

2.2 Vision, Mission, Goal, Objectives

Vision

24
Vision 2013 is the premier global conference for finance, risk, and incentive compensation
professionals. In three information-packed days, you can see how IBM solutions help you drive
profitable growth, manage risk and optimize your performance.
With more than 100 sessions and workshops to choose from - plus the latest product demos Vision 2013 offers you an in-depth look at IBM solutions for finance, risk management,
regulatory compliance and incentive compensation management. You'll see real-world case
studies from fellow customers, hear keynotes from industry thought leaders, and network with
peers, colleagues and product experts. And this year, you'll get a close look at the newest
additions to the IBM portfolio: IBM Algorithmic solutions for market, credit and operational risk
management, plus industry-leading incentive compensation and sales performance management
solution from Vatican an IBM company.
Vision 2013 is the best place to learn about the solutions and strategies you need to address the
problems that are top-of-mind for CFOs, CCOs, CROs and compensation professionals in
virtually all organizations.

Mission
IBM Mission Statement "At IBM, we strive to lead in the invention, development and
manufacture of the industries most advanced information technologies, including computer
systems, software, storage systems and microelectronics. We translate these advanced
technologies into value for our customers through our professional solutions, services and
consulting businesses worldwide." IBM IBM Mission Statement We have provided below details
of the content of the IBM Mission Statement, one of the most successful companies in the World.
IBM Mission Statement We hope that the IBM Mission Statement together with our definitions,
hints and tips will provide you with inspiration to develop your own successful explanatory
paragraph which will prove to be suitable for both your associates, customers and employees.
Information from Examples Help Need to write a letter or other business documents? Improve
your skills with an example, illustration and specimen. The layout and format of letters are
detailed in the free, online Letter Writing presentation. This also includes sections on formal or
informal writing, the three Paragraph Format and some tips on Spelling, Punctuation and
Grammar. Its free and only takes a couple of minutes to go through and will increase your
confidence with this type of task. IBM Mission Statement.

Goals
IBM Global Supply is either directly responsible or plays a significant role in support of the
responsible units for the following goals
Conservation
Procure paper and wood-based packaging (directly acquired by IBM) 100% from suppliers who source
from sustainably-managed forests, where such sources exist.
Product stewardship

24
Ensure recycled resin content represent 5% or more of the total plastic procured under contract for
use in IBM products.
Use powder coatings in lieu of liquid paints in 90% or more of the decorative metal finishing on IBM
products.
Ensure the combined amount of product waste sent by IBM to landfills or to incineration for treatment is
3% or less.

Objective
According to IBM Fellow and executive vice president Nick Donofrio, the 21st century drivers of
change include network ubiquity, with more than one billion Internet users and three billion
wireless subscribers around the world, and everyone and everything connected; the rising tide of
globalization, with its economics, expertise and openness; and innovation, in which technology
and insight combine to create new value in products and services, processes and business models.
IBM had deep experience in business transformations involving its business and operating
models and its workforce. The firm is transforming into one with simplified infrastructure and
government, such as its reduction from 155 host data centers in 1992 to just five today, and from
80 Web hosting centers in 1992 to six such centers today.

Global Supply Chain of IBM

Today, the fastest changing area of supply chain management is the global supply chain. Large
and small companies alike have expanded opportunities to sell internationally and source from
low-cost countries and are leaping to take advantage of the associated revenue growth and
lower total landed costs that can be achieved. To support these corporate strategies, supply chain
professionals are finding they must make significant changes in how they run their global supply
chain operations. The makeover is occurring at a technology level (via a new wave of global
supply chain automation), at a process level (with cross-functional processes and business partner
collaboration), and at a staffing level (with increased attention on how to leverage business
process outsourcing, managed services, and logistics service provider expertise). According to
Aberdeen best practice research conducted in 2005, among the most critical areas that companies
are revamping are:
Supply chain visibility to increase the transparency of global activities
Business-to-business (B2B) collaboration to improve supply/demand synchronization
Trade compliance to ensure undisrupted movement across borders and take advantage
of preferential trade agreements to lower total landed costs
Risk management to ensure resiliency in face of supply chain disruptions This report looks at
these key improvement areas and how large, mid-market, and small companies are building game

24
plans for success. Trends in strategies for increasing logistics agility are also addressed. Findings
are based on benchmarks in May and June 2006 of more than 150 companies. Fully 45% of
respondents were vice president or C level executives, with most others at a director of supply
chain or manager level. (See Appendix A for respondent demographics and research
methodology.)

Concern for Global Supply Chain of IBM

Although regulatory pressures and the immaturity of logistics networks in low-cost countries
receive extended press attention, these factors are not what keep supply chain executives up at
night (Figure 1). Much more concerning to them is the continued lack of critical supply chain
process visibility due to manual-driven processes. The lack of visibility is especially crippling to
large enterprises ($1 billion or more in revenue), 79% of which cite this as a major concern.
The second highest concern is the uncoordinated nature of multi-tier supply chain processes,
which causes an imbalance of supply and demand across tiers. Again, large enterprises, which
often have more tiers to coordinate than their smaller counterparts, feel this pressure more
intensely, with 56% stating this as a top concern. Its challenging to get multi-tier upstream
supply commitments in response to demand changes within an acceptable time duration, say
within one day, says a large high tech respondent. Today, the process is very manual in
imploding materials availability to construct an optimum build plan. These large companies are
at a scale at which poor visibility and uncoordinated multi-tier processes result in significant just
in case inventory carrying costs, premium freight expenses, and extended cycle times. Says a
respondent at a large North American industrial equipment manufacturer, To help improve the
bottom line, we need more accurate forecasting and overall supply chain visibility.

Logistics Agility Improvement Plans

Managing international logistics is not like managing an extended domestic supply chain; its
fundamentally a multi-party process fraught with greater unpredictability in quality, lead times,
costs, and risks. Rather than create the absolute-lowest-cost fixed network, leaders are building
into their logistics networks more points of flexibility. This helps them continually scan their
environment for bottleneck symptoms or spikes in demand and take action. only 11% use three or
more on a frequent, systematic basis. These pre-emptive organizations are just as likely to be
mid-size companies as large enterprises. Their common attribute is that they are twice as likely to
have highly automated supply chains as their peers. This automation enables them to costeffectively manage global shipments and inventories in a much more aggressive and exceptionbased manner.

24

Part-03
Theoretical aspects/ Literature review

24

Supply Chain Drivers & Obstacles

Facility of IBM
IBM Rochester is the facility of IBM in Rochester, Minnesota , not to be confused with the IBM
Global Services facility in Rochester, New York . The initial structure was designed by Eero Saarinen ,
who clad the structure in blue panels of varying hues after being inspired by the Minnesota sky, as
well as IBM's nickname of "Big Blue ". These features and the facility's size has earned it the
nickname "The Big Blue Zoo" from employees.
The building was first dedicated in 1958, but has been expanded considerably since then. The
mile-long facility is best known as the plant that produced the AS/400 computer system, which
later was rebranded as the iSeries and now System i . RS/6000 , now System p, and hard disk
development has also occurred at the site at points in the past. Actually, Pure Systems are mainly
assembled at this site.
[1]

Hitachi Global Storage Technologies ,

although having been spun off from IBM Storage Technology,

remains on-site, leasing otherwise unused space from IBM. Along with the Mayo Clinic , the IBM

24
plant is one of the biggest employers in the Rochester area, reportedly numbering around 5,000 in
2002.
The AS/400 division at the plant received the Malcolm Aldridge National Quality Award in 1990. In
November 2004, the facility claimed the top spot in the TOP500 list of fast supercomputers with a
prototype Blue Gene/L system containing 32,768 processors . It clocked in at 70.72 teraflops . The
manufacturing output of the site is so great that if it were a separate company, it would be the
world's third-largest computer producer.
The IBM

5110

personal computer was developed and manufactured in the facility.

for the facility took place on July 31, 1956. When it was first completed, there
was 576,000 square feet (53,500 m) of floor space. There is 3.1 million square feet (290,000 m)
today on the main campus, more than half the size of the Pentagon in Arlington, Virginia .
Employment at the site has gone through several cycles of growth and collapse, but is over twice
what it was in the 1950s. Rumors have appeared over the years suggesting that the structure was
designed to look like a punched card from above, but this is more due to the facility's expansion
over the years rather than an intention by Saarinen.
Groundbreaking

The plant, which is near U.S. Highway 52 in the northwestern part of Rochester, was recognized in
1990 by the National Building Museum as one of the significant contributions of IBM to the built
environment of the United States , along with IBM's New York City headquarters and the IBM
building in Atlanta, Georgia .

IBM did in Japan small-scale development activities, using RPQ procedure at its Special
Engineering department - 1960s
IBM Japan Development Laboratory (JDL) was established in Tokyo - 1972

JDL moved to IBM Fujisawa Plant site, becoming IBM Fujisawa Development Laboratory
(FDL) - 1975

FDL moved to the current site, becoming IBM Yamato Development Laboratory (usually
called Yamato Lab, not as YDL). IBM Tokyo Programming Center (VM /Office System,
Banking System, Retail System, etc.) at Kawasaki also moved here. - 1985

IBM Tokyo Research Laboratory also moved to Yamato - 1993

IBM Yamato Facility also houses Lenovo

As IBM sold its Personal Computer Division to Lenovo , Yamato Lab's ThinkPad
departments were separated, but remain at Yamato site 2005

24

IBM Hakozaki Facility is located at 19-21 Nihonbashi -Hakozaki-cho, Chuo-ku , Tokyo , on the right
bank of the Sumida River . It houses mainly IBM's marketing and systems engineering
departments, and is IBM's largest facility in Japan, in terms of the number of people working
there. Because of the seminars and demonstrations of the latest products and services frequently
held there, it is also familiar to many users and potential users of IBM.
It is conveniently located near the center of Tokyo, and can be accessed from a few stations on
the Tokyo Metro subway lines, from Metropolitan Tokyo bus line's busstop, or from Tokyo City Air
Terminal .
Its main building was completed in 1989, designed by Takenaka Corporation, and is owned and
leased by Mitsui-Soko, Mitsui Group 's warehousing & distribution company. The building
complex also houses cafeterias, restaurants, a post office, a bookstore, a gym and a tea ceremony
house.
[1]

Inventory of IBM
Inventory management can be a dangerous balancing act as businesses seek to avoid lost sales
due to out of stock merchandise, and reduce the expense of overstocking the wrong product or
over-ordering the wrong inventory. Inventory management solutions from IBM can help.
Powered by predictive analytics, they eliminate the uncertainty of how to get the right inventory
to the right locations at the right time.
With the ability to anticipate optimal inventory levels from the supply chain to store shelves, IBM
inventory management solutions can help your organization:

Manage physical and virtual assets for peak profitability

24

Reduce working capital requirements

Identify the right physical inventory for your supply chain

Determine optimal purchase levels to support production facilities

Predict customer demand and align with inventory and production

Inventory Online is available only in the US and provides access to print, download and change
request functions for:

Servers and peripherals

Associated software and software maintenance

Service Pac

IBM Global Financing lease contract information

Selected IBM PC hardware products

IBM ILOG Inventory and Product Flow Analyst provides supply chain inventory
management and optimization for manufacturers, retailers and distributors. It helps maintain
right-sized inventory levels to meet fluctuating supply and demand, often resulting in cost
savings between 15 and 35 percent. IBM ILOG Inventory and Product Flow Analyst enables the
optimal use of supply chains to promote profitability, efficiency and revenue growth.
IBM ILOG Inventory and Product Flow Analyst:

Provides service-level optimization throughout the supply chain.

Handles unique supplier sourcing costs and incorporates them into your business
model.

Uses a global, multi-echelon inventory optimization process for improved decision

making.

Calculates the optimal cost strategy for the whole network.

Offers expansive inventory strategies through integration with other IBM supply chain
products.

Transportation of IBM
Who does a global corporation, with a multi-billion dollar budget, ask when it wants to determine
the future direction of its Supply Chain? In the case of IBM, innovation starts at home, and the
company spent three days in May asking its Supply Chain professionals to Jam about the future.
An InnovationJam enables participants to join a virtual brainstorm and allows ideas to flow
along facilitated themes. Jammers post ideas and respond to existing threads, provoking

24
individuals to use their creativity to drive out imaginative and provocative solutions. When IBM
asked its global Supply Chain community to help to shape the 2015 Smarter Supply Chain vision,
leaders were calling on the sum of the talent in the organization to define the future.
In all, over 1,700 staff logged on to register their views on themes as diverse as Analytics and
Optimization, Talent Management, Visibility and Solutions Integration. Spending an average of
2.6 hours in the Jam between 11th and 14th May 2010, Jammers from 38 different countries
played their part in setting the strategy for a Smarter Supply Chain of the Future. Responding to
the success of the Jam, Tim Carroll, VP, Supply Chain Operations said, I am amazed at the
tremendous amount of input circulating throughout the forums - the great ideas keep flowing!.
In 2009, IBM published the results of interviews with nearly 400 Supply Chain Leaders in the
Chief Supply Chain Officer Survey. These leaders from all around the globe were clear that the
main challenges to Supply Chains lie in five areas: Visibility, Risk Management, Increasing
Customer Demand, Cost Containment and Visualization. These leaders understood success in
these areas will come from acting smarter. The Supply Chain of the Future will be Instrumented,
Interconnected and Intelligent. Data will flow from all points in the Supply Chain, enabling
companies to collaborate in real time with customers and suppliers. Powerful tools will enable
analysis at the speed of thought, driving optimization through rapid reaction to in a volatile
world.
As Supply Chains become ever more global, so the professionals who manage them are located
ever more remotely. Any organization is only as good as the people within it, and in the right
circumstances the capability of the organization can be greater than the sum of the component
parts. By drawing together its Supply Chain professionals from around the world in an Innovation
Jam, IBM is harnessing the diversity, talents and creativity of its workforce to shape the future.
Our travel and transportation solutions, technology and consulting can help
you: improve the customer's end-to-end experience; increase the agility of
customer sales and service systems; maximize the availability of assets and
infrastructure for revenue generation; improve operational efficiency; and
assure safety and security with less cost and impact on customers.
A bus, train or car to work. A bike to school. A plane for a business trip. And even if you don't
leave your home, your life is still influenced by the transportation industry: virtually every
tangible goodfood, clothing, medicine, vehicles, computershas been transported into your
world from somewhere else.
Transportationthe movement of people and goods from point A to point Bis the life force of
our economy. Cities could not exist if we didn't have transportation systems to move people and
goods in, out and around them. It has been a leading driver behind globalization: shrinking
distances, seeding the emergence of entire new economies and improving the quality of life for
millions of people.
Yet many of our transportation systems are inadequate to serve the needs of the 21st century. By
integrating technology and intelligence into the physical transportation infrastructure, we can
improve capacity, enhance the traveler experience and make our transportation systems more
efficient, safe, and secure.

24
IBM Intelligent Transportation provides citywide traffic management, traffic prediction and
transportation operation capabilities. It offers a scalable platform with predictive analytics, data
aggregation and operations and planning tools for improved traffic management. IBM Intelligent
Transportation provides near real-time, citywide visibility into traffic conditions and transit
operations for a 360-degree overview of your transportation network.
IBM Intelligent Transportation enables organizations to:

Use one integrated transportation system to increase situational awareness of current

traffic and transit conditions and provide predictive analytics.
Work with the Intelligent Operations for Transportation component to improve
traffic operations and citizen driving experience.

Utilize the Intelligent Transit Analytics component to improve public transit operations
and commuter experience.

Use collaborative tools for more efficient traffic management, traffic prediction and
transportation operations.

Take advantage of flexible deployment options by offering multiple deployment

models.

IBM ILOG Transportation Analyst provides vehicle routing and shipment planning to
optimize utilization of your transportation assets. It creates optimal transportation plans for
multisite, multitier distribution networks. IBM ILOG Transportation Analyst uses routes,
shipment consolidation and backhauls to optimize the use of available capacity.
IBM ILOG Transportation Analyst provides:

Detailed transportation analysis of various network designs to determine network impact

on fleet size and multistep routes.
A cost-and-benefit analysis of business rules based on what-if scenarios.
Expansive impact analysis of new network designs through integration with other
systems.

Information systems of IBM

International Business Machines Corporation provides information technology (IT) products and
services worldwide. The company operates in five segments: Global Technology Services, Global

24
Business Services, Software, Systems and Technology, and Global Financing. The Global
Technology Services segment provides IT infrastructure and business process services,
including outsourcing, process, integrated technology, and technology support. The Global
Business Services segment offers consulting solutions for strategy and transformation,
application innovation, enterprise applications, and smarter analytics; and application
management, maintenance, and support services. The Software segment offers middleware and
operating systems software, such as Web Sphere software to integrate and manage business
processes; information management software for database and enterprise content management,
information integration, data warehousing, performance management business analytics and
intelligence, and data analytics; Tivoli software for cloud and datacenter management, enterprise
endpoint and mobile device management, asset and facilities management, storage management,
and security systems; Lotus Software to connect people and processes for communication;
rational software to support software development in IT and embedded systems; and operating
systems software. The Systems and Technology segment provides computing power and storage
solutions; and semiconductor technology, products, and packaging solutions. The Global
Financing segment provides lease and loan financing to end users; commercial financing to
dealers and remarketers of IT products; and remanufacturing and remarketing services for
equipment. The company has a strategic alliance with Kutxabank. The company was formerly
known as Computing-Tabulating-Recording Co. and changed its name to International Business
Machines Corporation in 1924. The company was founded in 1910 and is headquartered in
Armonk, New York.
Details
Index Membership:
Sector:
Industry:
Full Time Employees:

Dow Jones Composite

Dow Industrials
Technology
Information Technology Services
434,246

IBM, the IBM logo and ibm.com are trademarks of International Business Machines Corporation,
registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the
Web at Copyright and trademark information.
Other company, product or service names may be trademarks, or service marks of others.
References in this publication to IBM products, programs or services do not imply that IBM
intends to make these available in all countries in which IBM operates. Any reference to an IBM
product, program or service is not intended to imply that only IBMs product, program or service
may be used. Any functionally equivalent product, program or service may be used instead.
The information contained in this publication is provided for informational purposes only. While
efforts were made to verify the completeness and accuracy of the information contained in this

24
publication, it is provided AS IS without warranty of any kind, express or implied. In addition,
this information is based on IBMs current product plans and strategy, which are subject to
change by IBM without notice. IBM shall not be responsible for any damages arising out of the
use of, or otherwise related to, this publication or any other materials. Nothing contained in this
publication is intended to, nor shall have the effect of, creating any warranties or representations
from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable
license agreement governing the use of IBM software.
All customer examples cited represent how some customers have used IBM products and the
results they may have achieved. Actual environmental costs and performance characteristics will
vary depending on individual customer configurations and conditions.

Sourcing of IBM
Seven steps to strategic sourcing
Combine a volatile global economic environment and an increasingly interconnected,
interdependent supply chain, and the result is a series of significant challenges for procurement
and sourcing organizations.
But along with challenge comes opportunity. By reducing cost, decreasing or eliminating
expense, generating cash, managing risk and improving profitability, these organizations can
create a new roadmap for the supply chains of the future.
The IBM Institute for Business Value recommends a seven-step process for developing a strategic
sourcing approach:
1. Conduct spends analysis: Collect and analyze category baseline spend data and then
identify potential opportunities and re-evaluate project scope.
2. Determine business requirements: Assess current and future business needs, and challenge
internal customer requirements to identify opportunities to reduce costs while enhancing
quality and service.
3. Conduct market analysis: Understand the supply market in order to form category strategies
that match business requirements with supply market capabilities.
4. Develop category strategy: Select the most appropriate market sourcing strategy for the
category by identifying the potential strategic alternatives and analyzing each option.
5. Select suppliers and negotiate: Provide a fair, consistent and structured approach to the
identification, evaluation and qualification of suppliers, as well as the subsequent selection of
suppliers that support business objectives.

24
6. Develop implementation plan: Provide a structured approach to developing supply
transition plans.
7. Manage supplier performance: Maintain the performance of internal users and the supply
base, the meeting of business requirements and contractual terms, the capture of savings and
benefits, and the improvement of supply relationships.
By adopting a strategic sourcing approach that includes these initiatives, sourcing and
procurement can help drive efficiency, productivity and ultimately business results.

Sourcing and supplier management is the

heartbeat of effective risk management
Supply chain risk management has taken center stage and sourcing and
supplier management are in the center. According to our 2009 supply chain
study, IBM Global Chief Supply Chain Officer Study: The Smarter Supply
Chain of the Future, risk management is the number two concern of supply
chain executives worldwide and multi-industry. Thirty-eight percent of the
company executives interviewed planned to evaluate and/or implement
supply chain risk management technology in the next 12 to 24 months. While
46 percent of the companies surveyed identified supplier failure and
continuity of supply as their top risk concerns, companies also identified
nontraditional risks brand and reputation issues, regulatory compliance,
product safety and catastrophe exposure as potential threats. Also, lack of
standardized processes and data were concerns, with the most difficult
inhibitor to effective risk management being the organization itself!
Over the last several years, many companies have reduced their business
costs and expanded their product lines through an aggressive sourcing
strategy, which brings both benefits and risks. Low-cost country sourcing,
multitier supplier networks and business process outsourcing are among the
supply chain initiatives that companies large and small have employed.
The benefits of these initiatives are apparent companies are able to reduce
the cost of goods, develop new markets and free up resources to focus on
core value-adding.

Pricing strategy of IBM

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As new regulations and higher liquidity requirements challenge future profits, banks are under
pressure to build new operations centred on the client. IBM's new survey of the Top 200 global
banks finds that less than 10% believe that maintaining the status quo is a sustainable business
strategy.
The new report: From Complexity to Client Centricity finds that operational complexity is
costing the ecosystem $200 billion annually and constraining pre-tax profit by an average of
20%.
While banks seem to understand the need for change to drive growth initiatives, to actually do
this, they need to build a holistic view of the client to better understand client needs, improve the
client experience and more effectively manage risk. The upside is that if banks are able to
successfully tailor products and services to customers, IBM's research has found that clients are
willing to pay up to a 10% premium for their services. More than 60% of bankers believe that
pricing innovation will help build client loyalty and improve profit in the new environment.
For banks to better understand their clients' needs and further improve their experiences, IBM
recommends:
* Enhancing pricing models to meet client needs in different segments.
* Modernizing client segmentation techniques.
* Maximizing client experience and client satisfaction in the different channels of interaction.
Banks worldwide need to invest in sophisticated insight to help them specialize operations and
deliver superior products and services that best meet their clients' needs, says Ronny Smolders,
financial services sector executive at IBM South Africa.
Data is at the core of IBM's heritage - from the invention of the first commercial electronic
calculator to magnetic stripe technology to securing online transactions. These are just a few
examples of how IBM has driven innovation through the better use of technology during its 100year history.
It's all about pricing
Banks that effectively price products and services can use pricing as a competitive tool.
According to IBM's survey, approximately a quarter of all banks currently employ standardised
pricing, regardless of the client relationship. But this trend also appears to be waning. In
forecasting pricing strategies for the future, only 12%-13% of banks said they would use
standardized, across the board strategies; a majority of the bankers favouring innovative and
flexible models instead.
To achieve more granular pricing, banks will have to be more granular in their client
segmentation to accommodate various risk models and differing abilities to pay. IBM's research
finds that 60% of banks are prepared to offer self-service pricing bundles as an option to
empower clients to choose price, channel, and level of service.

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Engaging in new client segmentation techniques
IBM's research indicates that not enough banks are accessing the right customer data to determine
effective pricing strategies. For example, 70% of bankers identified that they need more data on
client risks.
Instead of looking at demographics, IBM's research suggests that banks should look at attitude
and behaviour segmentation, to better align with customers' interests and needs. By investing in
the right technologies, banks can overcome some of the traditional barriers to gain deeper client
insight and offer more tailored services. Interestingly, banks in mature markets, more so than
those in emerging markets, are focusing on client service to regain trust (43% vs 31%).
Maximising client satisfaction
Naturally, the bank's focus of coming up with the right pricing strategies and delivering tailored
services is all ultimately geared towards increasing client satisfaction in the channel.
To increase client satisfaction rates in the channel, banks need to understand three things:
1) How people bank
2) How often they bank
3) What products and services they seek when banking
Banks that can optimize satisfaction in the channel by determining which customers prefer
using electronic channels vs traditional branch channels and then ensure the right delivery
models are accessible to those who prefer them will be best positioned for success.
Building future models for profitability
The new economic environment presents banks with some complicated issues, as well as some
interesting opportunities. Despite facing differing market conditions, banks on both sides of the
world can benefit from applying technology to gain more visibility and transparency to their
business challenges. Banks in mature markets need to eliminate complexity and reduce costs to
drive profit, while banks in growth markets need to diversify their income sources and maintain
their costs.
There are huge opportunities for growth market banks to deliver services into burgeoning
segments such as private banking and wealth management, as well into untapped communities
such as the unbanked. By using more sophisticated insight, banks can increase their focus on
becoming more client-centric, while optimizing risks and returns.

Product and Service

Industries & solutions

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Analytics
Application lifecycle management

Asset management

Application infrastructure

Big data

Business process management

Cloud computing

Commerce

Complex and embedded systems

Connectivity and integration

Data management

Data warehousing

Energy and environment

Enterprise content management

Enterprise marketing management

Enterprise modernization

Enterprise resource planning

Expert integrated systems

Procurement

Product lifecycle management

Security

Service oriented architecture (SOA)

Smarter computing

Social collaboration

Unified communications

Virtualization

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Web experience

More capabilities

Related links

A smarter planet
Midsize business solutions

Small business solutions

Case studies

Financing of solutions

All solutions

Business services

Application innovation
Business analytics

Business strategy

Commerce consulting

Midmarket expertise

All business services

IT services

Business continuity and resiliency

Cloud

Data center

Integrated communications

Mobility services

IT services menu list 2

Security
Software

Strategy and design

24

Systems lab

Technical support

Workplace services

Outsourcing services

Application management
Global process services

IT infrastructure services

IT outsourcing

Training

Offerings
Certification

Conferences & events

Additional services

Consulting alliances
IT services financing

Project financing

Working capital

All services

Products
Software

Product finder
Downloads

Business analytics (Cognos, SPSS)

Enterprise content management

Information management (DB2, Informix, InfoSphere)

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Software menu list 2

Lotus (collaboration)
Rational (software and systems delivery)

Tivoli (service management)

WebSphere (integration and optimization)

System z software

Systems

PureSystems
Power Systems (AIX, IBM i, Linux)

System z (Mainframe)

System x (xSeries)

IBM Flex System and BladeCenter

UNIX servers

Systems software

System Networking

Storage

Disk systems
Flash systems

Tape systems

Storage area networks

Network attached storage

Additional products

Certified used servers and storage

Certified used personal computers

Point of sale

Security

Semiconductors

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Upgrades, accessories and parts

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Part- 4

Findings

Analysis of the Findings:

The findings of the study are as follows.
During 20010 to 2011 IBM Company paid on an average 63.09% of their net
income as dividend where in 2009 & 2008 those were 113.25% and 106%

24
respectively. That is more than their net income. In that year fi rm
fi nance this extra dividend amount from their retained earnings. According
to our theory we can assume that for reducing dividend payout ratio
the stock price

of IBM Company may fall. But the management team was

able to convince the stockholder

that

they

cut

their

payout

for

increasing growth and running recession. For this reason their stock price
goes up. Clientele effect means the tendency of a firm to attract a set of
investors who like its dividend policy .If the large number of investors
of the particular company prefer high dividend then company must pay
more dividends to the investors. On the other hand, if large number of
investors of the particular company do not prefer high amount of
dividend then company must retain most of their earnings inside the
organization. I n

case of

IBM

Company

most

of

the

investors

p re f e r m o re d i v i d e n d s because the company has small number of

wealthy investors. The company believes that the investors are irrational and
they like bird-in the-hand theory but after a certain payout it started to follow
dividend irrelevance theory.
In last five years they did not pay any stock dividend. The analysis shows that
dividend was not stable over time. In the year 2008 and 2009 the firm used
the residual dividend model to set payout ratio at a level that will permit the
firm to meet its Financing requirements with retained earnings. It is not
following any particular dividend policy. As it is paying varying amount of
increasing dividend rate.

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Part- 5
Conclusion

CONCLUSION:

24
From the analysis of IMB Company and the industry we have identifi ed
that the industry is growing and identifi ed their main weakness is
insuffi cient lack of development with the rapid changing market
needs, insufficient promotional activities, and downward trend of quality. On
the other hand, distribution system and vertical integration are the strengths
of IBM From strategic marketing viewpoint; we see that IBM is taking
corrective stepson almost all the way. In very few sides IBM has lacking.
Based upon these facts recommended strategies would assist in more
growth of IBM company. in among the upcoming fierce competition in the
global industry.

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Part- 6
Recommendation

Recommendations:

24

Company should focus on Product Development, Market Development

and Market penetration Strategies
Should exit from the lower end segment and focus more on the middle
and upper middlec l a s s o f t h e s o c i e t y , b e c a u s e o f t h e g ro w t h
i n n u m b e r s o f p e o p l e b e l o n g i n g t o t h e s e segments and also
because of the rising incomes of its target customers.
Renewed brand image will enable IBM to earn premium at the
upper middle end of the market will aid the achievement of the
financial goals.
The service standards should be strictly monitored and hence an
experience fi t will be provided to the customers and these
customers for this will be willing to pay a bit of premium because
of IBMs brand and hence the competition undercutting IBM on price
would no longer be that big a threat.
I t w i l l n e e d t o f o c u s o n m a r ke t i n g i t s e l f a s a n o u t l e t
m e e t i n g a l l b a s i c n e e d s o f t h e families in its target market
segment
Should provide consistent quality service to its customers so that
customers can associate the same experience with whichever outlet
they visit of Bata.
IBM debt to equity ratio is 3.51, which means almost 75% are debts.
Management should reduce its debts to reduce the financial charges.
Reduce Selling and Administration expenses to get more Net income.

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Part- 7
References

Prospectors:

24

IBM (2010), Annual report 2006-2010.

IBM (2011), Monthly Report 2011.
IBM Institute for Business Value executive brief. Scoring High on the Supply Chain
Maturity Model. November, 2012.

http://www.ibm.com/security/outlook.html.

https://www.ibm.com/communities/service/html/communityview?
communityUuid=0629bb73-a904-45b1-86d1-20374d1f1c3e.

Websites:

www.ibm.com

www.ibm.org.com.

ibm.com/services

Ibm.com/support.

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