A PEST analysis is used to identify the external forces affecting an organization .This is a simple analysis of an organization's Political Economical Social and Technological environment. UCF Research Guides. Conversely, failure to keep up with the latest technological trends can lead to reduced sales and profits. This report is shared in order to give you an idea of what the complete Segmentation, Targeting and Positioning (STP) Analysis Report will cover after purchase. need to study data protection regulations to protect the customer data. Dissertation If IBM. Other regulations, such as antitrust laws, can limit IBMs ability to merge with other companies or acquire certain technologies.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[336,280],'howigotjob_com-large-mobile-banner-1','ezslot_13',199,'0','0'])};__ez_fad_position('div-gpt-ad-howigotjob_com-large-mobile-banner-1-0'); IBM is a global company with operations and customers in many different countries. Entering in countries with high taxation level will directly influence the profitability of IBM. Moreover IBM's high-priced lease strategy supported by excellent customer support enhances the company's fortunes. (2007). Additionally, IBM must be sensitive to cultural differences when marketing its products and services. The company has been struggling to keep up with the ever-changing technology landscape, and its stock price has stagnated. must consider the following social factors to conduct macro-environmental analysis: Changes in demographic patterns like aging population, migration trends and socio-economic variables have paramount importance for international business organizations like IBM. The first factor to consider is the rise of cloud computing. PESTEL analysis of the macro-environment. must study and predict the labor market conditions to understand how it can attract talented workers and leverage their skills to improve business performance. Keep it up! This is your chance to explore any of the technological factors affecting a business, including both technological constraints and advancements.This may refer to access to technology within a given region or the development of new technologies within an industry. IBM PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Loss of confidence expressed by major shareholder, 1. Another political factor that affects IBM is the trade agreements between countries. Posted by Zander Henry on IBM SWOT Analysis Strengths First mover in cloud computing solutions for enterprises. Additionally, the company is subject to the economic cycles of the markets where it operates, which may affect its sales and profits.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[580,400],'howigotjob_com-medrectangle-4','ezslot_4',193,'0','0'])};__ez_fad_position('div-gpt-ad-howigotjob_com-medrectangle-4-0'); Social: IBM is a global company and must be prepared to address the social needs of the markets in which it operates. Many technology companies coming up with internet boom have reduced the dominance of IBM 2. Second, IBM has been able to take advantage of the trend toward outsourcing by providing services to companies that are looking to reduce costs. Your email address will not be published. Proposal, Question Shifts in environmental regulations, climate change, and other environmental issues can have a direct impact on the companys operations and profitability. This report is shared in order to give you an idea of what the complete Covid-19 Impact Analysis Report will cover after purchase. This report is shared in order to give you an idea of what the complete Technology Landscape and Outlook Report will cover after purchase. This report is shared in order to give you an idea of what the complete Stakeholder Analysis Report will cover after purchase. Service, Dissertation The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. Help, Academic IBMs free digital education platform, Open P-Tech is designed to engage students and educators in times of remote learning. Below are the economic factors in the PESTLE Analysis of IBM: IBM must comprehend economic elements such as foreign exchange/interest rates, labor market conditions, inflation, and saving rates, among others, because they influence the country's overall economic climate. Increasing the adoption of cloud services provides a good opportunity for IBM. PESTEL analysis is a widely used strategic planning and management tool. can draw the negative response from media, environment protection groups, customers and the general public. Cuts down my effort to surf through heaps of redundant data.-Alexandra MookiMajor in Business Administration, Carnegie Mellon University, This website has an amazing support team. 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. GSTF International Journal on Computing, 1(1), 73-80. Paying careful attention to PESTLE factors can also enable businesses to improve their products and services to meet customers' needs. PlayStation SWOT Analysis: How Sony Beat Its Rivals at Their Own Game, OpenAI PESTLE Analysis: Studying ChatGPTs Big Innovator, Levis SWOT Analysis: Strong Brand Loyalty for the Blue Jeans Company, Hershey SWOT Analysis: A Bittersweet Future in the Face of Healthy Living, How Much Does It Cost To Open A Barbershop In 2023. These mainframes have become the industry's benchmark that competitors try to match. The company must tailor its products and services to meet the needs of the various markets it operates in. Revista ESPACIOS, 39(16). Finally, the exchange rate fluctuation can also influence the profitability and international trade. 1. 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. For example, recent economic downturns in Europe and China have negatively impacted IBMs financial results. As the cost of raw materials increases, so does the cost of producing IBMs products and services.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[728,90],'howigotjob_com-leader-2','ezslot_17',602,'0','0'])};__ez_fad_position('div-gpt-ad-howigotjob_com-leader-2-0'); Social factors include consumer preferences and tastes, government regulations, and global economic trends. Another economic factor that affects IBM is the cost of labor. Required fields are marked *. This can create compliance risks and costs for the company. Analyze the Ibm Sap external competitive environment to identify opportunities and threats. Moreover, the company has to follow the rules and regulations set by the government. IBM Five Forces Analysis (Porters) & Recommendations, Toyota PESTEL/PESTLE Analysis & Recommendations, Home Depot PESTEL/PESTLE Analysis & Recommendations, Wendys PESTEL/PESTLE Analysis & Recommendations, Harley-Davidson PESTEL/PESTLE Analysis & Recommendations, Burger King PESTEL/PESTLE Analysis & Recommendations, Sony Corporations PESTEL/PESTLE Analysis & Recommendations, Ford Motor Company PESTEL/PESTLE Analysis, Walmart PESTEL/PESTLE Analysis & Recommendations, Microsoft Corporations PESTEL/PESTLE Analysis & Recommendations, Starbucks Coffee PESTEL/PESTLE Analysis & Recommendations, PepsiCo PESTEL/PESTLE Analysis & Recommendations, Unilevers PESTEL/PESTLE Analysis & Recommendations, Verizon PESTEL/PESTLE Analysis & Recommendations, Whole Foods Market PESTEL/PESTLE Analysis & Recommendations, IBMs Generic Strategy for Competitive Advantage and Intensive Growth Strategies, IBMs corporate social responsibility strategy, International Business Machines Corporation 2016 IBM Annual Report, International Business Machines Corporation Form 10-K, U.S. Department of Commerce International Trade Administration Software and Information Technology Services Industry Spotlight, Information and Communications Technology Industry, International Business Machines Corporation (IBM), Governments move for digitization (opportunity), Political support for e-technologies (opportunity), Improving governmental efforts for data protection (opportunity), Stable economic growth in major markets (opportunity), Rapid growth of developing markets (opportunity), Rising demand for online products (opportunity), Rising purchasing capacities worldwide (opportunity), Rising use of customer service in evaluating product quality and business quality (opportunity), Increasing use of online services (opportunity), Technological integration in various industries and markets (threat & opportunity), Expanding global Internet accessibility (opportunity), Increasing availability of renewable energy (opportunity), Increasing availability of recycling programs (opportunity), Rising interest for business sustainability programs (opportunity), Improving overall intellectual property protections (opportunity), Weak legal protection for intellectual property in developing markets (threat & opportunity), Expanding e-waste regulation (threat & opportunity). For instance, extreme weather conditions can increase the cost of operations and compel the IBM. Let us know IBM PESTLE Analysis. There are several environmental factors that have played a role in IBMs success as a multinational technology company. It requires IBM. For example, higher sales revenues are expectable, as target customers are increasingly capable of purchasing information technology products from the company. 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. We do not share your information with anyone. Governments pushing for digitization in developing countries like India creates a good opportunity for IBM to grow their business and offer information technology services. Managers can use the results of this PESTEL/PESTLE analysis of IBM as basis for developing strategies and programs to strengthen the business. Corruption puts a negative impact on the business environment. Following economic factors need to be considered by IBM. The political climate influences how IBM does its business. can take it as an opportunity and adopt green business practices to win the trust of stakeholders. A well-developed infrastructure facilitates the business environment and increases the growth potential of the gold industry in the respective country. 27.3 PEST Analysis. needs to understand the online shopping behavior by considering the generational differences as younger consumers are more inclined to shop online than older customers. However, it faces stiff competition from other tech giants such as Google and Amazon in this area. By analyzing the environmental environment, IBM can identify changes that could affect their business and plan accordingly. IBM SWOT Analysis: Conclusion History of IBM The company started in 1911 as the Computing-Tabulating-Recording Company (CTR) and was later renamed to its current name, IBM. 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. Browse analysis of more brands and companies similar to IBM PESTLE Analysis. IBMs consumer-focused products, such as its personal computers, must meet the needs and expectations of consumers to remain competitive. PESTLE analysis is a framework which is imperative for companies such as IBM, as it helps them to better understand market dynamics & improve their business continuously. These mainframes have become the industry's benchmark that competitors try to match. Reach thousands of academicians and corporates. The focus should also be kept on decreasing cybercrime. This element of the PESTEL/PESTLE analysis shows social trends and changes that affect how customers and employees interact with the information technology business and its products. Moreover, adopting efficient waste management practices in organizational units that are located in or near urban areas is highly crucial for IBM. IBM. Ignorance in this regard can cause undesired circumstances for IBM., such as- hurting competitive advantage as a result of intellectual property rights violation and harmed organizational image due to violation of consumer/employee/environment protection standards. Moreover, there are laws to set the maximum price, ensure a certain quality standard and protect consumers from fraudulent marketing claims. This PESTEL/PESTLE analysis of International Business Machines Corporation demonstrates a greater number of opportunities compared to threats in the remote or macro-environment of the information technology industry. As one of the most well-known global corporations, IBM faces the challenge of managing its operations in the face of a highly dynamic and competitive business environment. IBM has faced a lawsuit against them in 2021 on account of age discrimination, such lawsuits hamper the image of the company and also significantly increases costs and decreases profitability. Addressing the external factors increases IBMs rate of success in boosting the performance of its global business. must follow the employee/labor health and safety laws as some countries have strict regulations to ensure labor safety. For example, IBM has been subject to investigations by the US government over its business dealings in China and Russia. The growing environmental pollution coupled with technological advancement has compelled business organizations to adopt innovative recycling and waste management practices. By assessing the legal environment, IBM can identify potential risks and opportunities and develop plans to address them. And it can be divided into 4 pieces as follows: 1) Reallocating resources to enhance their server product business and reduce operation costs and optimize the efficiency. Similarly, high trade restrictions can make the business environment more complex by affecting the exports and harming relationships with foreign trade partners. The company operates in over 170 countries and is affected by economic conditions in each of these markets. estimate the growth trajectory of industry and organization. Research and development activities are highly important in an environment characterized by creative disruption. The high interest rate will encourage the attitude towards investment and increase growth opportunities for IBM. The growing environmental consciousness and changing climatic conditions have made environmental analysis an important part of the PESTEL analysis. The application of PESTEL analysis can help IBM. Operating in such a market can lower the production cost of IBM. cannot enter a new market without studying in detail the legal environment and regulatory structure of the new consumer market. The organizational culture or corporate culture defines the philosophies, principles and values that influence the behaviors of employees. 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. Do you want us to design a market survey or write a market research report as per your specific requirements? Technologies and related changes determine the business tools and equipment available in the information technology industry. In such an environment, IBM. Issa, T., Chang, V., & Issa, T. (2010). The business organization is an international organization based in Armonk. Technological trends are evaluated in this element of the PESTEL/PESTLE analysis of IBM and the remote or macro-environment of the business. IBM can determine the growth trajectory of industry and organization by having a thorough understanding of the economic environment. The marketing department of IBM. Develop and implement a diversification strategy to exploit the technological integration in various industries and markets. The organization, with its long history going back to the nineteenth century, is one of the few Information Techniques. Nonetheless, cybercrime is also marked as an opportunity in this external analysis. Increase in adoption of e-commerce by consumers, 1. IBM. The main purpose of PESTLE analysis is to identifying issues that fit with two key criteria: * They are outside the control of your company. Segmentation, Targeting and Positioning (STP) Analysis Report. IBM top brass accused again of using mainframes to prop up Watson, cloud sales - https://www.theregister.com/2023/01/18/ibm_sued_securities_fraud/ This article has been researched & authored by the Content & Research Team. Grow your business. Hence, IBM. 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. IBM, also known as Big Blue, succeeds by developing competencies to exploit the opportunities and overcome the threats based on these external factors. Technological: IBM operates in a highly technology-driven industry, and must remain at the forefront of technological advances. Similarly, it is important to understand the industry lifecycle stage. The company is also seeking to capitalize on the growing trend for artificial intelligence (AI) with its Watson platform. Hill, E. J., Jackson, A. (2018). This is reflected in their commitment to achieving net-zero emissions of harmful gases by 2030 and to cut carbon emissions by enacting a carbon tax. This external analysis also points to governmental action that improves data protection. Factors such as inflation, exchange rates, and economic growth can have a major impact on IBMs operations. In case you want this report emailed straight into your email inbox, kindly share your details below. IBM has been a leader in the development and implementation of blockchain technology, which has allowed them to create secure and reliable platforms for data sharing and transactions. On the other hand, the rapid growth of developing markets is an external factor that corresponds to growth opportunities for information technology firms, especially through the market penetration strategy (Read: IBMs Generic Strategy for Competitive Advantage and Intensive Growth Strategies). 1. Charles Ranlett Flint was the founder of IBM, and he laid the foundation of the company on June 16, 1911. Leyva, M., Hechavarria, J., Batista, N., Alarcon, J. require the organization to consider these differences to avoid undesired circumstances carefully. By scrutinizing the external environment, IBM can gain insights into how external forces may shape the future of the corporation and its operations. Today, new products are developed quickly, and supply chain partners have also gained more power. All Rights Reserved by Barakaat Consulting. IBM. The rapid technological advancement and technological diffusion across the globe have increased the importance of understanding technological factors during the strategic decision making process. IBM announced its third consecutive goal for the use of renewable electricity in February 2021, as well as its fifth consecutive goal to reduce greenhouse gas emissions and a new goal to reach net-zero greenhouse gas emissions. IBM Research is the research and development center of IBM and according to data, IBM spent 6.33 billion USD on research, development and engineering. Changes in technology can create both opportunities and risks for the company. The corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. IBM is facing serious competition from other major players in the market such as Amazon, Microsoft and Google and that has led to investors doubting its capability to protect its market. Similarly, conflicts or disputes between two countries can limit IBMs ability to operate in both countries, as well as its ability to access certain technologies or services.if(typeof ez_ad_units!='undefined'){ez_ad_units.push([[336,280],'howigotjob_com-large-mobile-banner-2','ezslot_16',601,'0','0'])};__ez_fad_position('div-gpt-ad-howigotjob_com-large-mobile-banner-2-0'); One of the primary economic factors that affect IBM is the global economy. This investment will also increase stakeholder satisfaction and expand the customer base due to enhanced brand image. (2009). For example, the company has opportunities to develop products to satisfy demand for digitization in governments and related organizations, and to satisfy market demand for online services. Bureaucracy and corruption negatively influence the business environment. In some countries, recycling has almost become a business norm. Frequent changes in government policies harm business performance by increasing environmental uncertainty. A close eye should be kept on analyzing the 5G and determining its potential to deliver positive business outcomes through enhanced user experience, increased speed and expanded access. A., & Gomez, o. Intellectual property regulations are designed to protect the companies' patents and valuable ideas. High GDP also signals the consumers ability to spend more on offered products. The adoption of new technologies has shortened the lifecycle of new product development. Secondly, currency exchange rates are also a major consideration for the company. For instance, the company can develop new products for smart homes, as a way to diversify the business while utilizing the organizations technological capabilities. . PESTEL Analysis is a strategic management tool that IBM leadership can use to make better decisions. The social factors that have an impact on IBM include demographics, culture, values, and attitudes. Consumer Preferences and Tastes: IBM is heavily dependent on consumer preferences and tastes, as consumer demand and tastes drive the companys product development and innovation efforts. The US government over its business dealings in China and Russia the IBM supply chain partners have also gained power..., Targeting and Positioning ibm pestle analysis STP ) analysis report will cover after purchase factor! By consumers, 1 consciousness and changing climatic conditions have made environmental analysis an important part of the new market... Business environment more complex by affecting the exports and harming relationships with foreign trade.... Making process agreements between countries companies ' patents and valuable ideas P-Tech is designed protect. Follow the employee/labor health and safety laws as some countries have strict regulations to protect companies! 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