IBM recent innovations
The ascent of IBM into the profitable business of information systems was relatively rapid but major product lines were developed in the last 10 years. IBM currently offers 70 product lines which can be characterized by a high level of innovation and consumer-orientation which gives them large competitive advantages. Some of the existing products and services offered by the company have evolved from previous lines while others are completely new and have been introduced due to the requirements of the modern era of technologies. The company currently offers the following range of products and services:
1. Personal computing: notebooks, desktops, projectors, monitors, handhelds; 2. Workstations; 3. Upgrades, accessories and parts; 4. IBM certified used equipment; 5. Point-of-sale and self-service; 6. Servers: Intel processor-based, UNIX, Midrange (iSeries), Mainframe, Blade, POWER processor-based, Linux, Clusters, AMD processor-based. 7. Thin clients; 8. Microelectronics; 9. Software; 10. Storage: disk systems, tape systems, storage area networks, hard-drives; 11. Printing systems (Products. [online]. Available from: http://www. ibm. com/products/us/).
The field of information technologies in which IBM functions is characterized by a high level of competition due to the large profits which can be obtained as the result of successful innovations. Currently, the largest strategic competitors in the market for IBM include Dell, Hewlett Packard, Gateway, and Apple. At the same time, there are some companies which provide a small range of computer services and can also be regarded as competitors for IBM (the map of competitors is represented in figure 1). Figure 1. Map of strategic competitors of IBM
The largest strategic competitors of IBM offer similar product lines and similar level of customer services, therefore the problem of maintaining a large share of market is a very important task for IBM. One of the most successful tools which have been applied by IBM throughout its history of functioning is introduction of innovative technologies which are able to attract the consumers and guarantee the top place in the market. The matrix of the competitive profile (table 1) shows that currently, IBM occupies a decent share in the market due to the competitive advantages which is possesses, particularly due to innovation:
Competitive advantages Criterion weight IBM Hewlett Packard Apple Dell mark point mark point mark point mark point 1. Market share 0,3 4 1,2 3 0,9 3 0,9 2 0,6 2. Price 0,1 3 0,3 3 0,3 3 0,3 3 0,3 3. Quality of services 0,2 5 1,0 4 0,8 5 1,0 4 0,8 4. Innovations 0,4 5 2,0 5 2,0 5 2,0 4 1,6 Total 4,5 4,0 4,2 3,3 Table 1. Matrix of competitive profile. Due to the large number of competitors in the market and large expectations of consumers regarding the development of the most up-to-date technologies, IMB is constantly forced to suggest new products to the market.
The rapid change which is a characteristic feature of the modern world requires new products at every new stage of development, and those companies which are able to come up with such products stay in the market while others are destined to lose their positions. IBM struggles to remain the top player in the market and thus introduces new products and services more often than its competitors. 2004 was a very successful year for IBM innovations vise, according to Vice President Karen Fukuma: “2004 was a good year – and we saw our commitment to innovation and on demand printing solutions pay off.
Our performance in the InfoTrends/CAP Ventures’ analysis reflects the emphasis we’ve placed on providing IBM customers with integrated end-to-end output solutions. ” (IBM Captures Number One Spot in Key High Speed Printer Segment. [Online]. Available from source: http://www. ibm. com). One of the recent innovations was new software for insurers which enables them to provide their activities much faster than with the help of older software and be able to service more customers.
As the result of this innovation, IBM’s number of customers among insurance firms has increased rapidly. “IBM’s new Fast Path capability can help insurers create more low-touch/no-touch claims to reduce cycle time, lower costs, and groom a more satisfied customer base through prompt fair-claim settlement. ” (IBM Adds 850 Insurance Partners in One Year. [Online]. Available from source: http://www. ibm. com). At the same time, IBM offered another revolutionary product for insurance companies- its Legacy Transformation Services.
“IBM is also announcing new legacy transformation offerings to help its insurance clients transform to a computing model that can reduce costs, spur innovation, help achieve regulatory compliance and improve customer focus. ” (IBM Adds 850 Insurance Partners in One Year. [Online]. Available from source: http://www. ibm. com). Owing to these two recent products, the targeted segment of insurance companies brought sufficient profits to the company. Some of the most successful innovations of IBM have been introduced on the basis of the new Gluecode software after IBM purchased a California-based Gluecode Software company.
All of the products developed on the basis of this software have been very successful in the market due to their large consumer-orientation: they offer larger flexibility to organization using them than similar products. IBM is planning to use Gluecode software in the future for the development of new efficient products: “IBM plans to contribute Gluecode-developed software features to Apache Geronimo as well. In addition, IBM today also announced it will contribute software to the open source community that allows developers to use Eclipse development tools.
” (IBM Acquires Gluecode Software. [Online]. Available from source: http://www. ibm. com). One of the revolutionary products introduced by IBM in 2005 was the new package of consultancy services which could offer the customers an opportunity to get immersed into the world of innovative products of IBM, designed for their maximum convenience and satisfaction. “With this new service, IBM design experts will consult directly with clients who want deep insight into how their consumers or business customers might interact with future products or services.
” (IBM Designers To Help Clients Create Breakthrough Products And New Business Opportunities. [Online]. Available from source: http://www. ibm. com). The company also introduced a large number of up-to-date medical devices which enable doctors to transmit all of the possible data concerning the health state of the patient. The most successful innovative products offered by IBM have been born as the result of considerable re-organization of the company’s labs and brining them closer to the customers in order to get a full grasp of their needs and desires.
“As part of its effort to attack the Business Performance Transformation Services marketplace, IBM has been pushing its researchers, engineers and other innovators to work directly with clients, turning the marketplace into a living lab and creating new breakthroughs. ” (IBM Designers To Help Clients Create Breakthrough Products And New Business Opportunities. [Online]. Available from source: http://www. ibm. com). The innovations which have been recently applied by IBM have let to the success of the company in the market.
Criteria for the successfulness of innovations are different for different industries. For the computer industry, this impact can be estimated in calculations because it results in the increase of sales or profits of the company. According to the financial results of the company, its sales increased rapidly due to the application of all the mentioned innovations. Even though competitors were also doing their best to introduce some new products to the market, IBM was able to maintain its top place in the industry.