Knowledge & Information Systems
Bus 650
Spring 2013
Chervon McElroy International Business Machine better known as IBM is an American computer manufacturer that was established in 1911. IBM was formed from the merge of several companies. These companies were known as the Tabulating Machine Company which was used to count the population for the US Census, the International Time Recording Company who produced clocks and other time recorders, and The Computing Scale Company which produced commercial computing scales that provided the weight and price of a retailers products. This product was popular with butcher and dairy retailers. For a few years after the merge the company was known as Computing-Tabulating-Recording or CTR until 1924 when the company changed its name to IBM. IBM has been in many markets throughout its years. Other than taking over the vast businesses and products when the company merged back in 1911, the company has taken advantage and used the technology in earlier products to create new ones. In the 1930’s IBM started producing calculators using the technology from their tabbing machines. In the 1940’s IBM partnered with Harvard University to finance the invention of the first machine to compute long calculations automatically.[i] Although IBM did not create the first computer, by 1953 the company was producing their own line of computers. In the 1970’s IBM introduced the floppy disk which allowed customers to store and save data. IBM created the first scanner that was used in supermarkets that was able to read the price of the items. This was the premise of retail technology that is still use today. Also in the 1970’s IBM created the earlier databases for banks ATM machines. In the 1980’s IBM began to focus more on the research side of the business and produced four Noble Prize winners for physics. This set IBM apart from their competitors as IBM became known as the breeding grounds for excellence and innovation. The 1990’s was a difficult time for IBM as the company’s leadership decided to move the company in a different direction from what the trend in computers shifted and ultimately catered to what the consumers wanted. This caused the company to claim a net loss of over 8 billion in 1993. In the 2000’s IBM was able to come back from the dismal outlook that they had in the 1990’s and have continued to grow. In 2011 IBM celebrated its 100th year anniversary. According to Forbes, this is a rarity among businesses with the average lifespan of a corporation today is 15 years. This milestone proves that IBM has been constantly reinventing itself throughout the years and has been in line with Porter’s Competitive Model to help combat competitive forces. IBM has three major traditional competitors. They are Accenture (ACN) who provides wireless services, internet, energy, local and long distance telephone service. Hewlett Packard (HPQ) who provides computer products, technologies, software, and business solutions. The third and most significant out of the three major traditional competitors is Microsoft. Microsoft have dominated the market since the 1980’s with its personal computer and then with Microsoft Windows operating systems. IBM has been able to compete with these competitors by constantly creating different ideas. According to http://www-03.ibm.com/systems/openinvitation/index.html IMB filed for and obtained more than 6,000 patents for new products in 2011. Since IBM has been in the market for over 100 years it is only natural that they will receive competition from new businesses over the years. Not only have IBM been able to stay one step ahead of these new businesses but to create partnerships and gain new talent IBM began coaching these companies to help mentor them. Annually IBM holds the New York City IBM Global Entrepreneur SmartCamp Competition. This competition looks for companies, who are innovative with analytics, cloud computing, mobile computing that will result in economic growth and industry innovation. Winners of these competitions receive mentoring services from IBM, capital ventures with IBM, access to industry experts, and a stronger, deeper partnership with IBM. Substitute products and services are constant threats to IBM. The company has recognized that they will have to constantly reinvent themselves and create products that are not only cheaper, but efficient. The company has realized that they are not only an IT company but instead an IT service company and must cover all bases. IBM produces software, software product lines, personal computers, storage, networking, printing products, treat migration assistance, semi-conductors, workstations, computer accessories, and other product resources. Also, as mentioned earlier, in 1993 IBM was on the brink of bankruptcy reporting an unprecedented 8 billion dollar loss due to substitute products and services. IBM was granted a second chance from that error and the presidents of this company has made sure that IBM has a product or service in all areas of IT. IBM has such a record of longevity that throughout the years the company has formed strong ties to their customers. In some cases the ties that were formed with IBM has passed down throughout generations of families and the bond was automatically formed. IBM still has to make sure that they are not only keeping their longtime customers happy but also retain them and bring in and keep new customers as well. IBM has done this by listening to their customer needs carefully and acting on them but also on how the company is run. The company participates in a management process that is often called radical management. This works with pleasing the customers to be the ultimate goal with management organizing teams and working with staff instead of just giving orders, having communications with the public and the staff and them implementing on how to the process can be implemented with keeping the cost low. Many other companies who have participated in this type of management style have also enjoyed company longevity. Other ways that IBM has been able to keep their customers happy is that they have online customer support tools to help the customer. Customers also have the option of receiving a free weekly customized email that are sent to them to provide them with the latest news and with services and options that are best suited with the products that they have. Podcasts are also available to walk customers through common issues and blogs are also accessible to allow the company to monitor how customers really feel about the products and how the company can improve their services and products. As pointed out in by Kenneth Laudon, the more suppliers that a company has, the more control that the company have over their own products as in term of completion, price, and quality. IBM has recognized this and has a plethora amount of suppliers. The company has also incentive programs for diversity of suppliers such as from businesses that are owned by women, minorities, (lesbian, gay, bi-sexual, and transgender) LGBT. Their procurement department is in constant talks with suppliers about price, quality, and delivery. This gives IBM an advantage over companies that limit the amount of suppliers because of the diversity of where IBM can receive their products from. IBM has shown that they understand the effect of competitive forces and how they affect their business performance. IBM has become a leader in information technology and has used this with their business and has continued to help many other businesses improve their business with the use of information technology. Chevron Corporation is another firm that has been around for over 100 years. The company originated as the Pacific Coast Oil Co. in 1879 and was one of the many corporations that participated in the oil rush in the late 1800’s. By 1880 the company had built the country’s largest refinery in San Francisco Bay, California. The Pacific Coast Oil Company was eventually acquired by Standard Oil Company in 1900 due to Standard’s ability to become the industry’s largest kerosene provider, and over the years have gained a substantial part of the market share. In spite of being acquired, Pacific Coast Oil was able to still operate under its original name and not under their new parent name. Throughout the years the oil company continued to flourish spreading their refineries throughout the country and eventually expanding overseas and creating partnerships with countries such as Saudi Arabia, Canada, and Venezuela. In 1977 the company made the decision to change their logo to what we know today as Chevron. In 1979 Chevron celebrated its 100th year anniversary and pledged to continue the vigor and creativity to keep the company progressing in the future. During the 1980-1990’s the company had steady growth as they acquired large amounts of land off the coast of Mexico and introduced such products as Chevron Supreme Gasoline with Techroline. The company’s CEO was aggressive and advised the company that even though the company is currently enjoying success, as a company they still must be innovative as within the next decade the market will have ample competition. In 1985 Chevron merged with Gulf Oil corp. and became a leader in the oil industry. Along with the merger, the company officially changed their name to their logo Chevron. In the 1990’s as oil exploration began to decrease Chevron began to shift their priorities to growing alliances and focusing on other business ventures. Such ventures included products such as Othro Lawn garden consumer products, the Escravos natural gas project in Nigeria, the Hibernia Field offshore Newfoundland, and the Koko Field in Angola. This proved to move the company in the right direction as in 1996 the company reported earnings of an all time high of 2.6 billion.[ii] In 2000 Chevron merged with Texaco and became the second largest U.S. based energy company. After the merger of these two companies and throughout the years until present Chevron continued to focus on becoming the most innovative energy company and is constantly looking for ways to keep reinventing the company. Between 2002 and 2007 the company earned close to $72 billion dollars and between those same years spent the same amount of money investing on energy innovations. Chevron strives on operational excellence based on their five objectives which are: • Achieve an incident- and injury-free workplace. • Promote a healthy workforce and mitigate significant workplace health risks. • Identify and mitigate environmental and process safety risks. • Operate with industry-leading asset integrity and reliability. • Use natural resources and assets efficiently. The company prides itself to promote excellence from within and believes that when their employees are happy and healthy that this is when the company will be at their best performing level. Chevron business has transformed tremendously by creating new products, services and business models. As previously stated, within a five year period the company spent over $72 billion to invest in new products and energy innovation. Some of those products and energy innovation includes advances in liquefied petroleum gas which has been recognized by the World Shale Gas Conference for its potential in economic and environmental performance. Chevron comes off as a social responsible company and with that they boost customer and supplier intimacy which develops relationships with customers to make them feel like they are in a partnership with the supplier than rather a strictly business relationship. The company is able to create this intimacy by giving back to the underprivileged countries that they have refineries in. It is giving back to the land instead of coming off as a company that is simply in the business to make a profit. Some programs provided to the customers and suppliers are floating clinics, blood banks, low interest loans, and schools. Their motto is that “our country is indeed the world and our aim should be not only to do good for business but to do good because it is the right thing to do”. The company over the years has improved on their decision making. As in the 1980’s chairman George Keller expressed that the company must often change their views on the company as competition will be fierce. He also stressed that the company has to be flexible and have the ability to adapt to changes because this is a mandatory factor in the company surviving. Chevron focuses on their competitive advantage. The company strives to obtain and keep the best customers, suppliers, employees, and investors. This is what they feel gives them the competitive advantage over their competition. If you are able to keep the best team loyal to a company to listen to and support, then you have already won as fads come and go but, the bonds created will last a lifetime. Chevron has already proven to be able to have survival. Chevron is one of the oldest companies to still be in existence and continue to be one of the leaders in energy production. The Board of Directors does not want the consumer to think of oil when they think of Chevron but think of human energy which is a company trademark. Companies these days have to continuality think about what is the next step as if they do not a competitor can push them out of the market which is what happened to the original company Pacific Coast Oil when they failed to continually think about the next invention, need, want, product, and service. Chevron has been successful in using information systems in order to achieve all of the strategic objectives. They have continued to expand and be forward thinkers and would not have been able to do this without using information system to keep track of all of their accomplishments, shortcomings, goals, and future endeavors.

References http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-digital-transformation.html http://inventors.about.com/od/computersandinternet/a/Ibm-History.htm http://en.wikipedia.org/wiki/Tabulating_machine http://www-03.ibm.com/ibm/history/history/decade_1990.html http://www-03.ibm.com/systems/openinvitation/index.html http://www-03.ibm.com/press/us/en/pressrelease/34881.wss http://www.chevron.com/about/operationalexcellence/ http://www.chevron.com/about/history/ http://www.chevron.com/about/ourbusiness/otherbusinesses/technology/ -----------------------
[i] http://inventors.about.com/od/computersandinternet/a/Ibm-History.htm
[ii] http://www.chevron.com/about/history/1980/