International Business Machines

BCOM 314 Final Communication Plan

****This paper received an 80%****

Table of Contents

Executive Summary….…...………………………………………………………………….......2
Introduction…...……………………………….…………………………....……………………3
Company Narratives……………………………………………...……………………………...3
Internal……….……...…………………………...………………………………………………….3
External……………....……………………...…………………………………….………..3
Lack of Innovative Technology……...……………………………………………………….....3
Problem Identification...……………………….…………………………….…………....4
Shareholders..……………………………………..………………………………………4
Employees…..……………………………………..……………………………………....4
Customers…….…………………………………..…………………………………….....5
We Recommend...……………………....…...…….…………………………………………......5
Consumers…………………..……....…..……………………….………………………………....6
Shareholders……………….…...…………………………....…………………………………...6
Employees……...…...……….……………………………….…………………………………...7
Detailed Next Steps….....………....……………………….……………………………………..7
Timeline for Implementation…………………….....……………………………………...7
Budget for the Communication Plan …..………...………………………….……………8
Return on Investment…………………...……………….………………….……………..9
Conclusion…..…………………………………………………………………………………..10
Appendix..……………………………………………………………………………..………...11
Figure 1…………..……...………….…..…………..……………………….…………....11
Figure 2…………..…...………………………..………..………….……….……………11
References…..…………………………………………………………….……..………………12

1
Executive Summary

Introduction
This page will help you gain more insight into the final communication plan that our team has
chosen for IBM. We will analyze our company narratives, the lack of innovative technology, and
avenues we can take to overcome this setback.

Narratives
IBM’s internal and external narratives are in direct contrast to each other when it comes to
innovation and job satisfaction. Internally, IBM is pushing a narrative that they are in innovative
company and value their employees concerns. However, externally IBM faces issues due to the
general notion that investors and employees do not believe that the company is innovative
enough. IBM can overcome this difference in narrative by communicating to its stakeholders a
straightforward way to become innovative again.

Lack of Innovative Technology

It is crucial to understand that IBM’s lack of innovative technology is affecting all 3 of its most
significant stakeholders: shareholders, customer, employees. Being more innovative is in IBM’s
best interest because it will increase the share price, and create a more positive external narrative
for customers. IBM hopes to combat this issue by introducing Watson Home to consumers, since
it will reinforce the perception IBM is once again innovative.

Recommendations
It is our recommendation that IBM target its 3 most essential stakeholders (shareholders,
employees, and customers) and communicate its new innovation strategies through relevant
channels. With targeted communication to its stakeholders, IBM will be able to effectively
regain a positive public perception and reassure its stakeholders that it will stay competitive in
the years to come. Examples the targeted channels we plan to utilize to reach our stakeholders
include but are not limited to: social media, the Watson Home interface, and video conference
calls.

Detailed Next Steps

In order to effectively execute our communication plan to IBM’s stakeholders, it is critical to
stay as close as possible to our proposed timeline and budget. If we are able to use our 70 million
dollar budget to its potential, then we will be in advantageous spot to launch Watson Home into
the market, amongst our competitors products, like the Amazon Echo and Apple Homepod. We
hope to fully execute our communication plan to our stakeholders in a period of 3.5 months.

2
Introduction
In the interest of bridging IBM’s narrative divide we have developed a goal of bringing new
technology to the market. This proposal will outline current narratives IBM is faced with, who
our prioritized stakeholders are, communication recommendations for each stakeholder group,
and a response. We hope that this report will provide you with a clear vision of how we plan to
accomplish these goals.

Narratives
Internal Narrative
The values that IBM hold shapes everything we do and every choice we make. The company’s
values are that IBM is committed to every client’s success, provide innovation that matters to our
company and the world, and that trust and responsibility are paramount in every relationship we
are a part of. Throughout its 107 years of operation IBM has been an innovator in the technology
industry creating products such as: universal product barcodes, magnetic strips on credit cards,
and the artificial intelligence system Watson. Additionally, IBM prides itself on being a
responsible employer by providing high quality benefits and initiatives for its employees.
Regardless of our attempts to uphold our company values IBM has been unable able to conquer
negative external opinions. Our communication plan is intended to overcome this narrative
divide.

External Narrative
Our research regarding external narratives revealed that most stakeholders believe that IBM is no
longer a company that develops the most innovative technology. Employees fret that IBM has
been surpassed by other technology giants in the industry like Apple, Microsoft, and Google.
The constant worry that IBM is a thing of the past has decreased job satisfaction across the
company (Maroney, 2017). Additionally, shareholders have been increasingly anxious that
profits are down as a result of the company becoming a technology dinosaur.

Lack of Innovative Technology

Watson Home will be the technology to skyrocket IBM back to its top position in cognitive
computing. By implementing Watson into the current technological advancement of smart
homes, IBM will have an advantage over its competitors such as Amazon, Honeywell, Savant,
and Apple. Since 2011, the market for smart homes has had $2.3 billion dollars invested to
further the comfortability of residence living yet the market is still largely untapped (Woerpel).
Many companies have a home synchronized device like Amazon Echo or Apple Homepod so
that easy tasks can be completed such as remotely playing music or asking a random question to
quench the consumer’s curiosity. 6 million Amazon Echo devices have been sold already since
the price is only $100 and creates a futuristic element that attracts consumers. More advanced
systems including Honeywell and Savant have artificial intelligence installed in homes to change

3
the thermostat, turn off the lights, lock the house remotely, and even heat up the hot tub on the
way home from work.

This market is rapidly advancing but is still largely untapped and when there is an untapped
market full of buyers, there lies opportunities for entry. With Watson technologies implemented
into the preexisting smart homes, IBM will be able to install similar artificial intelligence along
with all the cognitive computing systems already tied to Watson. This technology can process
information, generate hypothesis evaluations, and learn dynamically. Watson Home will be able
to observe its user’s habits and tendencies at home, create hypotheses based on its observations,
and learn to further improve the comfortability at home.

Shareholders
Shareholders might be our most important stakeholders. Shareholders are directly correlated with
our other groups of stakeholders. If we see positive responses from our push towards new
innovation from the other stakeholders listed, we will also see a positive response from
shareholders. Bringing new innovative technology is relevant to shareholders because they care
about the profits when the company profit earnings per share increases, giving more dividends
back to them.

Employees
Employees always play an important role in a company. As a multinational company, IBM has
employees from all over the world. According to Business Statistics, the data shows that IBM
has 380,000 employees over 170 countries. Three
countries with the largest number of employees in
IBM are: India (130,000), America (92,000), and
China (16,000). Working in a company, employees
are always concerned about job security. Based on
Business Insider, it indicates that over 70,000 IBM
employees were laid off at the end of 2015. Too
much pressure and anxiety will cause survivor
syndrome among employees, resulting in a
defensive, protective attitude where their main
concern is to not get fired. Survivor syndrome in
employees result in lower productivity and
progression, especially with innovative companies
like IBM.

Employee’s are the foundation for IBM without employees we cannot have innovation let alone
anything since we will have no one to power what is IBM. In recent years running theme of
employee reviews of the company are that employees feel as though they are not innovating new

4
technology. Many of the same employees are worried about future job security, because of a lack
of new technology being brought to the market. By bringing new innovation technologies to the
market we hope to reach similar revenues to current market competitors. By reaching these
similar revenues through increased innovation we hope to reach employees through improved
job security. Improved job security is directly correlated with new innovation since new
innovation will lead to increased revenue which helps to keep our current employee projects
funded and funding for new projects

Consumers
Feeding IBM’s Watson Home to the public consumers will amass a huge profit unseen since this
company lost its standing in the market back in mid 2012, but it will also be the biggest
challenge. Our objective to create more innovative products is solved. Now, the company needs
to communicate our Watson Home to the everyday consumers. General pricing for Smart Home
AI ranges from $3,000 to $15,000 with a monthly service fee of $35 to $70 and of course, Cloud
Automation, which will range from $200 to $300 (HomeAdvisor). With the middle class
average household income of $50,000 to $200,000 annually, we’re looking to market our Watson
Home to upper-middle class and upper class households. These families already have many
devices, including computers and TV’s, in their homes so that we can more easily market IBM’s
product. The opportunity to have a smart home is an alluring element of success to many
consumers. The American Dream to become rich and have nice things is a prominent and
powerful tool to be used in marketing. With Watson Home, we aim to address price availability
earning $115,000 or more annually. By offering a consumer based product at a reduced price, we
aim to reach new consumers that care about keeping up to date with the technology of tomorrow.
This new, innovative technology has shown great potential among our competitors. Customers
can look forward to IBM’s return to the market and depend on the company to satisfy their ever-
evolving technological desires.

Recommendations
Consumers
In order to communicate to our customers that IBM is creating more innovative technology and
tailoring it to these ultimate consumers, there are specific channels that will help us reach them.
Communicating Watson Home is easy through celebrity endorsements, social media, and online
ads. Marketing Research by Academic Mintel discover that the two most successful marketing
approaches in ads for Gen X are “Funny” and “Entertains without feeling like an ad” at each
respective average of 60% and 46.5% between the two genders (Mintel). Using a loved, well-
known celebrity in a funny ad that doesn’t feel like an ad would best grab the attention of our
consumers. Another approach is placing ads on social media. According to PEW Research,
65% of Baby Boomers use Facebook and other social media sites to rekindle past relationships.
Clicking on one of these ads would direct the viewer to Watson Home’s page where s/he can
direct themself around an IBM smart home, similar to a game. There, we will ask the customer

5
to contact an employee and start the conversation. Watson Home is the opportunity IBM needs
to trump this negative viewpoint that the company is less innovative. The figure to the left shows
the exact percentages of marketing preferences by Generation X and Millennials by both
genders.

Shareholders
The delivery to our shareholders why IBM is investing Watson into this market at this time, and
not at a previous date, is essential. They are definitive stakeholders like our customers.
Shareholders have noticed the decline in stock price and revenue every quarter of every year for
the past five and a half years. What needs to be
communicated to them is the challenges IBM
faces in bringing Watson Home into the public
consumer market and how we’re going to do it
because the shareholders’ main concern is
keeping the company as profitable as possible.
There are a few approaches to shareholders to
persuade them in IBM’s efforts of Watson Home.
The first approach to communication will be our
Letter to Shareholders. In this letter, we will
notify them of our intentions toward Watson
Home and personally inviting them to a
presentation at IBM headquarters. The next
approach will be an article in the Wall Street
Journal which will allow IBM to show its efforts
to reach out to a larger network of investors who
can choose to buy IBM stocks. Just last year in
2017, the Wall Street Journal received 40 Pulitzer Prizes for its work and effectively grabbing
more attention to its newspaper. The Wall Street Journal will grab the attention of our
shareholders since so much attention this past year has been focused on the WSJ.

Employees
In order to communicate to IBM employees that the company is bringing back innovation and
job security, our priority should be communicating through the right channels. One channel will
be in person meetings in every IBM office, both face-to-face and over video meetings. These
meetings will tell the employees that they are bringing this new technology to the market.
According to Inc, their study shows that employees have meetings twice a week on average, and
companies spend 15% of their time on meetings. This illustrates that meeting is necessary and
efficient because employees can get to know the recent situation about the company. Another
potential channel will be through emails. Additionally, IBM should send reports via email about
job growth to employees after Watson Home hits the market. Based on Dailynews, the survey

6
from Pew Research Center reports that 61% of employees believe that emails is primarily the
most important tool for workplace communication.

DETAILED NEXT STEPS

Timeline for Implementation
The launch of Watson Home should be completed in a timely manner, because IBM is facing
decreased market share and revenues almost every quarter. Since 2010 IBM has been developing
Watson with the hope that this product will be able to increase growth, but has not been
successful. Watson Home may offer
IBM the opportunity to increase its
consumer base by millions with a
consumer version of Watson. We
recommend that IBM release Watson
Home during the fourth quarter in
2018 to get maximum sales from
holiday gift givers.

In figure 2, Watson Home will be

announced to employees and
shareholders at the beginning of
October. Additionally, the timeline
shows that consumers will be told of a big upcoming announcement via social media
advertisements on October 3rd, but will be vague as to build excitement around the
announcement. On October 15th IBM will hold a press conference to reveal Watson Home to
consumers and other technology companies. At the same time an internal memo will go out to
explain to employees what the new technology means, and how it will secure their jobs for years
to come. Starting after the press conference advertisements should begin on TV, social media,
and on search engines.

On November 1st Watson Home will be available to purchase by the general public. Within the
first month of sales IBM should begin to buy print ads in the Wall Street Journal to inform
shareholders of how successful the product has been so far. By the middle of the January in 2019
IBM will hold a shareholder convention to inform investors of overall growth and profits for the
fourth quarter and fiscal year. The proposed timeline was created with the understanding that
Watson Home will be available for sale starting November 1st, and any delays in the
manufacturing process will ultimately delay the timeline leading to an overrun budget.

Projected Budget
We project that the overall budget for the communication plan will cost $139,204,090. The
budget was inflated somewhat to allow for some cost overruns in staffing and communication

7
fees. The budget should be within the means of IBM as the organization brought in revenues of
just under $80 billion last year (IBM,2018).

As seen in Figure 1, we have budgeted $633,090 for staff related experiences to communicate
with our stakeholders. Although, IBM has staff that handle advertisements and communications
with stakeholders, we budgeted additional staff that will solely be working on this specific
project. The budgeted amount will add seven new employees to IBM: 4 advertisement and
marketing positions to work on advertisements for consumers, 1 H.R specialist position to
communicate with employees, 1 shareholder relations position, and a website designer to update
IBM’s own web content. Each member of the team will be working to accomplish the
communication goals in their respective areas.

The remainder of the budget, $138,571,000, will be allocated to communicate with the
prioritized stakeholders. Advertisements, although effective, do require a large amount of capital
to reach their intended capital. After researching the typical costs for national television and print
advertisements we determined that each 30 second television ad will cost $342,000, and each
print ad in the Wall St Journal will cost $277,200. Additionally, to perform a meaningful search
optimization campaign IBM should expect to spend $10,000 up front and an additional $11,500
per month to keep the campaign operating. To successfully communicate with shareholders IBM
should be willing to spend $8,500 on paper and $212,500 on postage for a shareholder letter.
Finally, IBM will need to offer a shareholder conference which is estimated to cost $300,000,
which includes costs for the physical meeting space, food/drink, and accommodations for top
executives.
Following this set budget will keep IBM within a practical limit to accomplish our
communication objectives. Even though the budget is large IBM should expect to see a large
return on its investment concerning the interests of its employees, shareholders, and consumers.

Return on Investment
According to Statista by 2025 yearly global revenues of consumer artificial intelligence products
is estimated to top $58 billion (Statista, 2018). Apple, Google, and Amazon are biggest three
companies in this industry, with Amazon currently holding over 70% of the market share. If IBM
were able to capture just 15% of the market in this sub-industry its revenue could increase by
$8.85 billion yearly. The additional profit earned by IBM could be used for research and
development, additional benefits for employees, increasing dividends to our shareholders, or to
cover deficits the company runs.

8
After Watson Home launches IBM should expect to see employee happiness go up at the
company because of an increase in job security. In the past three years IBM has laid off close to
100,000 workers worldwide, seriously impacting the morale at the company (Business Insider,
2016). When employees are happier in their jobs they are more productive and tend to switch
jobs less often. The uptick in employee happiness would likely lead to an increase in service
revenues and a decrease in training and hiring costs at IBM.

Many of IBM’s shareholders have been uneasy with the direction of the company in the past few
years, because of decreased profits and market share of the technology industry. In the past year
one particular shareholder, Berkshire Hathaway, has sold 78 million of its 80 million shares of
IBM (intext). Warren Buffet stated that he was pulling his investment out of IBM, because he
became worried the company was underperforming compared to other competitors in the market.
Watson Home may be able to assuage other shareholder’s fears by showing IBM is keeping up
with other big technology companies. This could encourage new investors to purchase stock in
IBM, and increase the market value of their stock over time

Conclusion
By increasing productivity and innovation with the new and improved, Watson Home, IBM is
able to increase revenues, attract new customers, and maintain profitability for shareholders.
With the increase in production, IBM can now provide secure jobs for quality expertise. IBM’s
competitors and loyal consumers will see the increase in innovation with Watson Home. The
approval for production and advertisement for Watson Home will allow us to connect both sides
of our competing narrative and it will exhibit our increase in innovation. Compared to Siri and
Alexa, our customers will see our Artificial Intelligence as a more sophisticated and advanced
product due to its cognitive computing abilities. Thus, our shareholders will have a more positive
outlook towards the future of IBM and our employees will be satisfied with job security. If there
are any remaining questions, comments, or concerns, please contact us at
yossisarshar@email.arizona.edu

9
 Appendix

Figure 1- This is a detailed budget of our communication plan.

Sources: Glassdoor, Wall St. Journal, Compackage, SmallBusiness, Entrepreneur Network,

Costowl

Figure 2- This is a timeline for our proposed communication plan.

References

10
Bort, Julie. “IBM's Restructuring Continues, with Reduced Severance for Laid off
Employees.”Business Insider, Business Insider, 2 Mar. 2016,
www.businessinsider.com/ibm-layoffs-1-month-severance-2016-3.

CNNMoney, Cable News Network, from, Money.cnn.com/2018/02/14/news/companies/warren

-buffett-teva-ibm-apple/index.html.

“Email, Internet Remain Top Workplace Tools: Study.” NY Daily News, 31 Dec. 2014,

“General Advertising Rate Card.” Wall Street Journal, no. 83, 14 July 2017.

“His company Berkshire Hathaway (BRKA) recently took a $358 million stake in Teva
Pharmaceutical (TEVA). “Warren Buffett Invests in Drugmaker, Dumps IBM.”

IBMReviews.”Glassdoor,www.glassdoor.com/Reviews/IBM-Reviews-E354.htm?sort.sort
Type=RD&sort.ascending=false&filter.employmentStatus=UNKNOWN.

“IBM International Student Hiring.” IBM International Student Hiring - United States, 27
Feb. 2017, www-03.ibm.com/employment/internationalstudents/index.html.

“IBM Receives Record Number of Patents in 2017.” IPWatchdog.com | Patents & Patent
Law, 8 Jan. 2018,
www.ipwatchdog.com/2018/01/09/ibm-tops-u-s-patent-list/id=92016/.

International Business Machines. 1 Mar. 2018, from,

www.nasdaq.com/symbol/ibm/ownership-summary.

Kim, Larry. “How Much Are Meetings Really Costing Your Company?” INC, 19 Jan.
2016.
Kim, Eugene. “Amazon's Echo and Alexa Could Add $11 Billion in Revenue by 2020.”
Business Insider, Business Insider, 23 Sept. 2016,
Lardinois, Frederic. “IBM's Year-over-Year Revenue Didn't Decline in the Last
Quarter.”TechCrunch, TechCrunch, 18 Jan. 2018,

Lister, M. (2017, December 18). Generational Marketing: How to Target Millennials, Gen X, &
Boomers. Retrieved March 01, 2018, from
https://www.wordstream.com/blog/ws/2016/09/28/generational-marketing-tactics

11
Marketing to Generation X.” Mintel Academic, June 2016,
academic.mintel.com.ezproxy1.library.arizona.edu/display/774590/?highlight#hit1.

Mayer, K. (2017). IBM beefs up family benefits, doubles paid parental leave.
Ebn.Benefitsnews.Com, 1.

Revenues from the Artificial Intelligence (AI) Market Worldwide, from 2016 to 2025
(in Million U.S. Dollars). Sept. 2017, from

“Smarthome - Home Automation Systems, Products, Kits, Hubs & Ideas.” Smarthome -
Home Automation Systems, Products, Kits, Hubs & Ideas,
www.smarthome.com/.

Smith, Craig. “25 Amazing IBM Statistics and Facts.” DMR, 30 Nov. 2017,
expandedramblings.com/index.php/ibm-statistics-facts/.
Solutions, Zap. “How Much Should Employers Spend on Benefits?”
Compackage,
www.compackage.com/employee-benefit-resources/employee-benefits-cost.asp.

Staff, F. C. (2017, March 08). Why IBM Is One Of The Most Innovative Companies Of
2017. Retrieved February 22, 2018, from Fast Company,

WOERPEL, H. (2017). Smart Homes and the HVAC Contractor: Honeywell's 'Smart
Tech, Smarter Experts' event serves as a smart home think tank. Air
Conditioning, Heating & Refrigeration News, 261(11), 19-20.

12