Reach thousands of academicians and corporates across the globe. A framework for PEST analysis based on fuzzy decision maps. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. as they determine the overall economic environment of the country. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. Integrity. Second, IBM has been able to take advantage of the trend toward outsourcing by providing services to companies that are looking to reduce costs. International Journal of Business and Management, 7(24), 52. IBM has customers, partners, and suppliers in many different countries, and the companys operations can be affected by changes in foreign relations. The PESTEL/PESTLE analysis is a strategic management instrument that identifies the most significant political, economic, sociocultural, technological, ecological and legal (PESTEL/PESTLE) external factors relevant to the company. Academic writing has no room for errors and mistakes. 2. IBM SWOT Analysis Weaknesses Like, it may pressure the IBM to give an unfair wage raise, or may halt the production process by giving a strike call. As such, it must comply with a variety of international trade agreements that govern how it conducts business with foreign countries. This element of the PESTEL/PESTLE analysis shows that IBM has growth opportunities based on market penetration, customer service, and online services. PESTEL analysis of the macro-environment. If IBM. T. hirdly, interest rates are another key economic factor impacting IBM. IBMs business strategy is designed to support two major goals - helping clients to move to the digital era by bringing together innovative technology and industry expertise, and providing long-term value to shareholders. IBM PESTEL/PESTLE Analysis & Recommendations International Business Machines Corporation (IBM) employs organizational capabilities to continue growing the business, despite challenges based on the opportunities and threats in the information technology industry's remote or macro-environment, such as the ones outlined in this PESTEL/PESTLE analysis of the firm. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for IBM. Hou, J., Lu, Q., & Han, Y. * By clicking on "Buy Now" you agree to accept our ", On purchase the IBM SWOT & PESTLE Analysis PDF report will reach you. Aside from these external factors, the remote or macro-environment presents the opportunity to grow the companys revenues in providing cloud platform services. . The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. For instance, IBM has the opportunity to enhance its protective measures against cyber attacks. For instance, the proliferation of mobile devices and cloud computing has led to a decline in demand for IBMs traditional mainframe and server products. Posted by Zander Henry on As the cost of labor increases, so does the cost of producing IBMs products and services. This condition in the remote or macro-environment is a challenge against IBMs strategies of generating higher revenues in developing markets. A holistic approach to the threats and opportunities shown in this PESTEL/PESTLE analysis can empower IBM in its growth and expansion efforts in the information technology industry. Sitemap. to develop new products quickly, increase product range diversity, integrate flexibility into the value chain and develop healthy business relationships with value chain partners. Whereas, operating in rigid labor markets may cause labor wage and other issues raised by powerful labor unions. For instance, IBM can cooperate with the governments of developing countries to address intellectual property concerns while boosting the companys brand recognition and popularity in these markets. This external analysis also points to governmental action that improves data protection. Loss of confidence expressed by major shareholder: IBM showed stagnant growth over the last few years registering more than 20 straight quarters without revenue growth as of 2017. This includes understanding the environmental regulations in the markets in which it operates and ensuring that its operations comply with these regulations. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. Which tech firms will lose out the most in the China-US trade war? The following is a PESTEL analysis of IBM: Political Factors Based on these external factors in the remote or macro-environment, the results of this PESTEL/PESTLE analysis point to the following recommendations for IBM: Copyright by Panmore Institute - All rights reserved. must study the specific environmental regulations of the country under consideration to understand which resources (like water, electricity etc.) 24-27). In such an environment, IBM. The demand and supply of labor determine the wage rates and supply of skilled workforce. For example, IBM has been subject to investigations by the US government over its business dealings in China and Russia. IBM has a dedicated trust center that focuses on protecting their customers and business with privacy and security. IBM's corporate social responsibility culture is built on environmental leadership. It pressurizes the IBM. These laws can dictate things like minimum wage, hours of work, and health and safety standards. is present in different countries, each having own political tensions. For example, despite significant economic opportunities in Southeast Asia, countries in the region suffer from weak implementation and loopholes in intellectual property protection. Quantum computing appears to be one of the most promising of the company's current activities, since several businesses seek to use it to solve a variety of problems that are more complicated than classical computers can handle. In addition, global economic trends can affect the demand for IBMs products and services, as well as the prices it can charge. IBM SWOT & PESTLE Analysis - SWOT & PESTLE.com. Twenty years of work and family at International Business Machines Corporation. can increase the market share by focusing on emerging technological innovations. The first factor to consider is the rise of cloud computing. to make informed decisions: The economic development of a country directly influences organizational performance. European Journal of Innovation Management, 16(3), 285-300. Political factors can range from government regulations and policies to international trade agreements and foreign relations. Following technological factors can influence the business performance of IBM. ~ 0.0 Page). IBM, also known as Big Blue, succeeds by developing competencies to exploit the opportunities and overcome the threats based on these external factors. Changes in technology can create both opportunities and risks for the company. As a result, this element of the PESTEL/PESTLE analysis of IBM points to opportunities to address the ecological concerns in the remote or macro-environment of the information technology industry. Charles Ranlett Flint was the founder of IBM, and he laid the foundation of the company on June 16, 1911. 3. A. D., & Martinengo, G. (2006). These laws are designed to ensure that companies do not abuse their market power or engage in corrupt activities. The business practices of the IBM. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. For example, higher sales revenues are expectable, as target customers are increasingly capable of purchasing information technology products from the company. Grnig, R., & Morschett, D. (2017). Research and development activities are highly important in an environment characterized by creative disruption. The names and other brand information used in the PESTLE Analysis section are properties of their respective companies. This can be done through a PESTEL analysis. Moreover, a well-developed governance system with a democratic political environment makes the business environment more comfortable for international business organizations like IBM. If you continue to use this site we will assume that you are happy with it. A strong US dollar makes IBMs products more expensive in foreign markets and can reduce demand for its products. IBM's building in So Paulo, Brazil in 2009. Customized Solutions Develop and implement a diversification strategy to exploit the technological integration in various industries and markets. can draw the negative response from media, environment protection groups, customers and the general public. Andr Cavalcante, S. (2013). High taxation affects international trade and prevents exports. Moreover, the increasing use of online services is marked as an opportunity in this external analysis. A careful review of legal risks is necessary to avoid getting into significant legal trouble. What are some of the strengths that IBM has? IBM SWOT and PESTLE analysis evaluates the most influential and innovative company that provides hardware, software and services to businesses and governments globally. Currently, IBM. Moreover, considering the development and maturity level of technology in the respective market is also important. However, despite such trend of improving protections, the company still faces issues in developing markets. This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s. 1. Over the years . Overhauling of H1B work visa program by Trump administration, 1. Consequently, the external factors in this PESTEL/PESTLE analysis of IBM demonstrate major growth and expansion opportunities in the remote or macro-environment. It is important for IBM. to make the value chain more flexible. should carefully analyze the protests by pressure groups, social/environment activists and worker unions as such protests play an important role in the policy making process. Ranging from political factors to environmental factors, each factor comprises various variables that influence the strategic decision making process of business organizations like IBM. Finally, the company has been able to capitalize on the growth of the internet and e-commerce by providing solutions that help businesses operate more efficiently. The technological factors in the PESTLE Analysis of IBM are mentioned below: Being an IT company, it becomes crucial for IBM to be at the forefront in technological advancements and improvements. Secondly, currency exchange rates are also a major consideration for the company. Please refer to the Terms and Conditions and Disclaimer for usage guidelines. By scrutinizing the external environment, IBM can gain insights into how external forces may shape the future of the corporation and its operations. can use the information retrieved from social, environmental analysis to target the consumer groups and increase the appeal of offered products to potential buyers. Low interest rates can encourage businesses to invest in technology, which is good for IBM, but high interest rates can lead to decreased demand for its products as businesses cut back on spending. However, considerable threats are also determined in this external analysis of IBMs information technology business. needs to consider the investments made by competitors on a micro and macro level to understand how new technologies influence the firms value chain and prevailing cost structure. Hence, IBM. Political factors like Trumps trade war with China can have adverse effects on tech giants. Many technology companies coming up with internet boom have reduced the dominance of IBM 2. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. Copyright 2023. 5. For example, the cybercrime threat imposes significant pressure on the company and its clientele. Their move to the cloud has allowed them to offer their customers more efficient and cost-effective solutions for their data storage and computing needs. Check your email Holistic Analysis Grow your business. When labor markets are flexible, IBM. PESTLE analysis is also referred to as PESTEL analysis. To conclude, the PESTEL model is an important business tool that involves a detailed analysis of macro-environmental factors that shape the business environment. Berkshire reduced stake in the company in 2017 with concerns regarding increasing competition faced by IBM in cloud segment and declining global server market size. A careful evaluation of legal aspects is required to avoid getting into some serious trouble. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. by adamkasi | Apr 9, 2023 | Companies | 0 comments. The remaining section under "Weakness" is available only in the 'Complete Report' on purchase. This report is shared in order to give you an idea of what the complete Key Performance Indicators (KPI's) Report will cover after purchase. Similarly, it is important to understand the industry lifecycle stage. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. With the growing presence of the world on social media and the internet as whole governments also want to push for data security and privacy concerns of consumers which creates more opportunities for IBM to look at. 1. Proposal, Assignment Writing Wall, S., Minocha, S., & Rees, B. For example, the company can benefit from growth opportunities in the remote or macro-environment through the use of high economies of scale, which is one of the business strengths identified in the SWOT Analysis of IBM. PESTLE Analysis. Operating in such a market can lower the production cost of IBM. IBM PESTEL Analysis IBM PESTEL Analysis Posted by Zander Henry on Aug-22-2018 PESTEL analysis is a widely used strategic planning and management tool. In the IBM PESTLE Analysis, the environmental elements affecting its business are as below: Environmental norms, laws, and regulations fluctuate depending on the market. IBM SWOT and PESTLE analysis has been conducted and reviewed by senior analysts from Barakaat Consulting. The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. The company operates in over 170 countries and is affected by economic conditions in each of these markets. This report is shared in order to give you an idea of what the complete Competitor Analysis Report will cover after purchase. The company is also seeking to capitalize on the growing trend for artificial intelligence (AI) with its Watson platform. Strategy planning process often requires five steps -. Pestle analysis is conducted in IBM to identify and analyze external forces that may have an impact on their business. 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