Ibm Case Study

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Description Page No

1. Introduction 3

2. Economic Data 4

3. PESTLE Analysis 7

4. Ratio Analysis 8

5. SWOT Analysis 13

6. Appendix 14

7. References 16

International Business Machines is a multinational company which is involved in the development of Information Technology infrastructure along with providing solutions to IT issues. It also undertakes research for new technologies, both software and hardware and thus transforming them into new products. IBM was incorporated in the State of New York on June 16, 1911 as the Computing-Tabulating-Recording Co. (C-T-R). In 1924, C-T-R adopted the name International Business Machines Corporation. [ 2011]. In 2010, IBM was ranked the 20th biggest firm in the US by Fortune Magazine. It currently employs 400,000 people, working in different fields providing various IT services like outsourcing, Middleware, Server, Security, Storage and Data, Business continuity and Integrated Communications. It has also contributed to the Information Technology Industry by innovating business products like servers, systems, networks, internet security and the likes. IBM UK is a part of the parent company, employing 20,000 people who are involved in providing consulting and outsourcing services, along with developing business software’s and high-end microprocessors. The IBM motto “THINK” helps to understand the strategy of the company, and explains the amount of money that IBM invests into research and development.

Inflation generally means the rise in price measured against the purchasing power. We have considered CPI (Consumer Price Index) inflation, which measures the impact of price on the consumer and which will affect the industry as a whole.


Interest rate is the rate which banks charge for the use of money. Factors like inflation, greater demand for credit, tight money supply, or a banks requirement for reserves, affect the national interest rate. A rise in interest rates through any of the mentioned reasons, affects the functioning of businesses.


Consumer Confidence reflects how much the consumers are likely to spend. GDP (Gross Domestic Product) and unemployment affect the confidence of the consumers. The reason being, when the GDP is high and unemployment is low then the consumer confidence will also be high and vice-versa.





There is no political instability in the UK, which is very feasible for organisations to establish and function from here. There is a lot of scope for the IT industry, even with the heavy taxation.


There is no rise in the GDP rate, but the economic environment in the UK is lucrative, which could thus be a good market for the products and services of IBM. Rising inflation affected the UK economy which resulted in a higher unemployment rate.


I.T sector is falling down as the number of students studying computer courses are decreasing with time. According to the, Joint Council for Qualification at the Royal Society, a decrease of 57% has been seen among the students in computers ‘A’ level in the period of 2001 to 2009. Also, expensive workforce in the IT industry lead to an in increase in the rate of capital employed (ROCE).


Technological developments offer both an opportunity to acquire greater market share and to eliminate (to a certain extent) the threat of substitutes. Innovation can change the fate of a company.


The Govt. imposes levies on carbon produced by huge industries. Green IT is the next thing in advanced technological development, which is in a way mandatory for all IT companies. As...
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