IBM Smarter Commerce - A Strategic Analysis

4,120 views

Published on

A strategic assessment of the IBM Smarter Commerce solution space. The presentation is created as an academic dissertation based on the study of Smarter Commerce Solutions industry by the author.

Published in: Business, Technology
1 Comment
2 Likes
Statistics
Notes
  • Hi Madhu, this is an excellent and insightful presentation. I am following IBM very closely from a market development perspective in Saudi Arabia. It there any light that you can shed on IBM go to market strategy around enterprise applications and more specifically IBM's commerce solutions in Saudi Arabia? I would love to connect over email (uzimujtaba@gmail.com)
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
4,120
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
170
Comments
1
Likes
2
Embeds 0
No embeds

No notes for slide

IBM Smarter Commerce - A Strategic Analysis

  1. 1. SMARTER COMMERCEIntegrated Value Chain Solutions in the Age of the Customer Madhuranath R
  2. 2. OVERVIEWCOMPANY PROFILE STRATEGIC ANALYSIS About IBM PEST Analysis 5-Forces Analysis V-M-V of IBM Strategic Maps Smarter Commerce Industry Success Factors Target Market Competency Matrix Value Proposition Triangle ModelFUTURE GROWTH STAR FRAMEWORK Potential Market Visual Representation Strategic Maps Framework Description Competency Matrix Framework Explained
  3. 3. COMPANYPROFILE
  4. 4. About IBM History Business RankingsFounded in 1911 as CTR Technology Solutions Forbes Global #31,revenueRenamed in 1924 as IBM Business Consulting Fortune #1, leadershipOperates in 170 countries IT Services & Others Fortune #5, most admired Leadership Brand Equity FinancialsVirginia Rometty – CEO Market Cap - $227 Billion $107 Billion – RevenueSam Palmisano - Chairman Global #2 Best Brand $16.3 Billion – Net Income14 Board of Directors Global #1 Green Company $18.5 Billion – Returns
  5. 5. VISION Solutions for a small planet MISSION At IBM, we strive to lead in the invention, development and manufacture of the industrys most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customersthrough our professional solutions, services & consulting businesses worldwide VALUES Dedication to every client’s success Innovation that matters – for our company and the world Trust and personal responsibility in all relationships
  6. 6. About SMARTER COMMERCE IBM’s Enterprise Marketing Management division leads Smarter Commerce Integrated lifecycle approach to Commerce for total customer-centricity Improves how firms connect with marketers, suppliers, partners, customers, web sites and even social networks Delivers value via Customer Insight & Customer-centric Value Chain Realignment throughout the lifecycle phases of Buy, Market, Sell, Service Brings together IBM’s core technologies & product portfolio TECHNOLOGIES PRODUCTS Integration – Supply Chain Planning & Execution WebSphere, Sterling Commerce Advanced Analytics Unica, Coremetrics Cloud Computing Cognos Social Networking IBM Collaboration Suite Cross-Channel Commerce Sterling Commerce, iLog
  7. 7. TARGET MARKET Smarter Commerce solutions are applicable to most industries like – Banking & Insurance Government Communications Healthcare Energy Oil & Gas Education Retail Food Transportation Systems But within a given industry Smarter Commerce targets specific businesses E.g. Primary Target Market of Smarter Commerce for Retail comprises – • B2B Retailers • B2C Retailers • Online Retailers
  8. 8. VALUE PROPOSITION
  9. 9. STRATEGIC ANALYSIS
  10. 10. PEST ANALYSIS POLITICAL ECONOMIC• China is the manufacturing hub • Global Recession is driving for half of all products in world down margins across industries• Global political sentiment • Global Retail Supply Chain against China is a potential risk inefficiencies waste $15 Trillion SOCIAL TECHNOLOGICAL• Increased consumers’ access to • Tech provides more ways for information empowers them consumers to connect to retailer• Current generation of consumer • Social networks have empowered shares experiences and info consumers with an increased quickly and with more people transparency & power of WOM
  11. 11. 5-FORCES ANALYSIS Threat of New 5-Forces Analysis Entrant • New entrants cannot create MEDIUM Smarter Commerce solutions • Suppliers of solutions are companies acquired by IBM • Substitutes are only partial solutions as of nowBargaining Bargaining Power of Competitive Power of • Customers need novelCustomer Rivalry Suppliers solutions to maintain their LOW competitiveness LOW LOW • Rivalry is non-existent as Smarter Commerce is a new segment introduced by IBM Threat of Conclusion Substitute Smarter Commerce MEDIUM Industry is ATTRACTIVE
  12. 12. STRATEGIC MAPSOLUTION CAPABILITY 4 HIGHCONSUTING CAPABILITIES IBM 2 SAP Oracle Accenture LOW 0 0 LOW RANGE OF1.5 SOLUTIONS HIGH 3 Conclusion: Offering a broader range of solutions is as important as providing Smarter Commerce Consulting. BUT only offering both gives maximum market share.
  13. 13. STRATEGIC MAPSOLUTION COMPATIBILITY 4 HIGH IBMPROPRIETARY SOLUTIONS SAP Oracle 2 Accenture LOW 0 0 LOW INTEGRATED SOLUTIONS 1.5 HIGH 3 Conclusion: Ability to integrate proprietary with other solutions provides business value as perceived by customer. Proprietary + Integrated Solutions is the name of game.
  14. 14. STRATEGIC MAPBUSINESS MODEL 4 HIGH IBMI N N O VAT I O N Oracle 2 SAP Accenture LOW 0 0 LOW P A R T N 1.5 S H I P S ER HIGH 3 Conclusion: Building partnerships to serve more customers is as important as constant innovation. These two factors contribute to strengthening of the business model
  15. 15. STRATEGIC MAPBRAND EQUITY 4 HIGH IBMCUSTOMER SERVICE SAP Oracle 2 Accenture LOW 0 0 LOW 1.5 MARKETING HIGH 3 Conclusion: A strong customer service and excellent marketing are essential business drivers in this segment . Having BOTH gives a greater market share.
  16. 16. INDUSTRY SUCCESS FACTORS Smarter Commerce Consulting Solution Capability Integrated & Proprietary SolnsCRITICAL Partnerships & OutsourcingSUCCESS Business Model Continuous InnovationFACTORS Marketing & Advertising Brand Equity Customer Service Excellence Application Development IT Services Maintenance ServicesTHRESHOLD Scalability Performance FACTORS Delivered Quality Cost of Solution Deployment Price Cost of Consulting
  17. 17. COMPETENCY MATRIX KEY SUCCESS FACTORS Weight IBM Oracle SAP Accenture OthersSolution Capabilities 50% 9.7 6.2 5.6 4.3 Smarter Commerce Consulting 20% 10 5 5 4 Proprietary Solutions 15% 10 7 8 2 Integration Capabilities 15% 9 7 4 7Business Model 25% 9.6 7.0 4.2 2.0 Partnerships & Outsourcing 10% 9 7 3 2 Continuous Innovation 15% 10 7 5 2Brand Equity 25% 10.0 6.0 4.4 4.0 Marketing & Advertising 15% 10 6 4 4 Customer Service Excellence 10% 10 6 5 4 Total Weight 100% 9.8 6.4 5.0 3.7 Market Share 100% 37% 20% 15% 10% 18%Conclusion: Comprehensive Solution Capabilities, Innovative Business Model andBrand Equity are the Key Success Factors to compete in Smarter Commerce Industry.
  18. 18. KSF MATRIX INTERPRETATION• Smarter Commerce Consulting capability is the single most important KSF in Smarter Commerce Solutions Industry• Solution Capabilities + Marketing = 65% weightage These two factors contribute to IBM’s market leadership• Smarter Commerce brings together several technologies/ solutions and thus straddles several strategic groups• Competitors of IBM Smarter Commerce offer partial solutions & thus have low market shares corresponding to their segments
  19. 19. TRIANGLE FRAMEWORK KSF Competencies Smarter Commerce  Analytics solutions like Consulting Coremetrics & Unica Proprietary Solutions  WebSphere middleware is an integration platform Integration Capabilities  Value Chain Integration Continuous Innovation Solutions with iLog & Sterling Commerce IBM Smarter Commerce provides analytics powered integrated solutions for improving efficiencies and margins by delivering business outcomes throughout the lifecycle phases of the commerce Value Chain Smarter Commerce Consulting leverages analytics to help derive customer insight to identify new revenue streams for customers Value Proposition
  20. 20. FUTURE GROWTHSMARTER COMMERCE – 2020
  21. 21. MARKET PROJECTIONS• Smarter Commerce Solutions market will be worth $70 billion as per the projections of IBM Enterprise Marketing Management• IBM will be the leader with more than 50% market share• Smarter Commerce spans business consulting, technology solutions and IT services to give IBM 360° earnings potential• IBM leverages partnerships with ISV or IBM Service Vendors to service customers in the SME segment as well which increases the brand equity and dominance of IBM in Smarter Commerce
  22. 22. STRATEGIC MAPFIRST-MOVER ADVANTAGE 4 HIGH IBMCUSTOMIZED SOLUTIONS 2 Oracle SAP Accenture LOW 0 0 LOW 1.5 IMPLEMENTATION EXPERIENCE HIGH 3 Conclusion: As a first-mover IBM gains unmatched implementation experience and builds customized solutions which raises the entry barrier for potential competition.
  23. 23. STRATEGIC MAPBUSINESS MODEL 4 HIGH IBMI N N O VAT I O N 2 Oracle SAP Accenture LOW 0 0 LOW P A R T N 1.5 S H I P S ER HIGH 3 Conclusion: Building partnerships to serve more customers is as important as constant innovation. These two factors contribute to strengthening of the business model
  24. 24. STRATEGIC MAPBRAND EQUITY 4 HIGH IBMCUSTOMER SERVICE SAP Oracle 2 Accenture LOW 0 0 LOW 1.5 MARKETING HIGH 3 Conclusion: A strong customer service is critical to succeed in this market along with sound marketing. Having BOTH gives a greater market dominance.
  25. 25. INDUSTRY SUCCESS FACTORS Implementation Implementation Experience Experience Customized SolutionsCRITICAL Partnerships & Outsourcing Business ModelSUCCESS Continuous InnovationFACTORS Brand Equity Marketing & Advertising Customer Service Excellence IT Services Application Development Maintenance ServicesTHRESHOLD Performance Scalability FACTORS Delivered Quality Price Cost of Solution Deployment Cost of Consulting
  26. 26. COMPETENCY MATRIX KEY SUCCESS FACTORS Weight IBM Oracle SAP Accenture OthersSolution Capabilities 45% 9.7 2.9 2.6 2.3 Implementation Experience 25% 10 2 2 2 Customized Solutions 10% 10 4 3 2 Integration Capabilities 10% 9 3 3 3Business Model 25% 9.6 4.0 3.6 2.0 Partnerships & Outsourcing 10% 9 4 3 2 Continuous Innovation 15% 10 4 4 2Brand Equity 30% 10.0 5.6 4.4 4.0 Marketing & Advertising 20% 10 6 4 4 Customer Service Excellence 10% 10 5 5 4 Total Weight 100% 9.8 3.9 3.3 2.7 Market Share 100% 59% 15% 11% 7% 8%Conclusion: Comprehensive Solution Capabilities, Implementation Experienceand Brand are the Key Success Factors to compete in Smarter Commerce Industry.
  27. 27. KSF MATRIX INTERPRETATION• Proven Implementation Experience will be the most important KSF in Smarter Commerce Solutions Industry by year 2020• Solution Capabilities + Marketing = 75% weightage These two factors contribute to IBM’s continued dominance• Smarter Commerce will become an independent industry and solution in its own right and new competitors will try to copy it• Competitors from current partial solution segments will no longer be relevant and will be left out of the market game
  28. 28. THANK Y U

×