The Computer Industry and Business Involvement
Computer or information technology industry is the growing industry and there are ranges of businesses involved in the designing hardware and networking infrastructures. It includes the development of the computer software, providing information technology (IT) and manufacturing computer components (Schwalbe, 2015). There are many companies involved in the computer industry these are Dell, HP, Apple, and IBM. The companies selected for this assignment are HP and IBM.
The aim of the report is to provide the critical comparison of the e-business strategies; the comparison takes place in the same industry. The selected companies are competing with each other. The comparison between is done on the basis of the dimensions of the e-business strategies. The dimensions of the e-business strategies consist of business model, revenue model, social media strategies and online marketing strategies.
Hewlett-Packard was founded by William Redington Hewlett in the year 1939. The company provides the wide range of hardware and software components. The vision of the company is to create technology that enhances the working of the organization (HP, 2017).
International Business Machines Corporation is an American multinational technology that came into the existence in the year 1911. The company was established in Armonk, New York, U.S. IBM manufactures and markets computer hardware, software, middleware and also offers the consulting and hosting services (IBM, 2017).
This section of the report includes the comparison of the e-business strategies among the two companies. The comparison is based on the dimension of the of the e-business strategies.
A business model describes the rationale of how an organization creates, delivers, capture value in economic, social, cultural and other contexts (Afuah, 2014). Basically, the business model canvas is strategic management and lean start-up template that is used by the company for developing the new or existing business models. It is a visual chart that defines the value proposition, key activities, customer relationship, key partners, customer segments, key resources and channels (Dudin, et, al., 2015).
The image shows the comparison between the business model of HP and IBM. This business model includes the major components of the business model such as value proposition, distribution channel, customer segment, revenue streams.
HP value proposition get attracts towards the customer technology which includes printers (cartridges), handheld PDA’s, and home computers. The focus of the company is mainly in the customer market segment (Kelleher, 2012). The revenue streams of the company depend on the selling the consumer tech products to the consumers that are characterized by thin margins and the high volume in the emerging markets. The value configuration of the company is the core activities which are required to be in sequence following porter’s value chain of the production company.
Background of HP and IBM
On the other hand, IBM's Value proposition attract towards the large extent of professional services which include the business IT consulting and services. The company strongly focus on the business market segment which includes large companies. The revenue streams of the company show that the company is able to generate high margins from the consulting services. The value configuration of IBM’s core activities follows the analysis-design –evaluation which is a cyclical problem-solving approach (Ovans, 2015).
Considering the business models of HP and IBM, both the companies are competing in the competitive environment. HP Company is more focused on the consumer tech operates because the company faces many competitors and barriers which distract the working of the company. Innovation is crucial for the companies dealing with the consumer tech services rather than the professional services. The company IBM is leading company in terms of the patent registration which might seem counterintuitive considering the business model of the company. Comparing HP with IBM, the IBM is dealing the business activities in the more stable market with the competitors like Accenture the consulting company. The barriers to entering in the market of the insurgents are higher than the consumer tech.
HP provides the products to the retailers so that these retailers can make the product available to the customers directly. In this model, the company will make less profit because they make the product available at low prices to the retailers. The company making the product available to the retailers which help the retailers to make the profit and company will not be able to generate the profit. This will impact the company because without fund the company will not be able to spend the amount on other activities which can be a weakness of the company. On the other hand, the company provides the product to the customers at the affordable price (Lambert, and Davidson, 2013).
On the other hand, the IBM is providing the business services to the sales team and the sales team offers the product in the business markets. This is the reason company is able to make a high profit. The IBM’s business model is helping the company to provide high profit which is a strength of this dimension. Though, on the other hand, the customers or businesses have to pay a high amount for the services they are getting. The prices of the service might affect the business who can’t afford the expensive services.
Comparison of E-Business Strategies
Social media is one of the popular tools to communicate with the customers. Each and every company make use of different social media strategies that help the company in generating the awareness about the product in the market. Social media is one of the best and appropriate point of contact for the customers (Fuchs, 2017). The tech giant, HP also makes use of the social media to attract the customers. HP develops an innovative strategy that helps the company to set the standard for the customer engagement through social media. The company tried to understand the needs of the customers; basically, the strategy is to know the needs of the customer by providing them a platform to communicate. To communicate the company entered into the space of social media and took 2 years to listen to the customers and identify their expectation with the company. The company got good responses, some of the responses are stated below: -
- The company immediately showed a rise in their social media community from its original 350+ member to more than 66,000 followers on Facebook (HP, 2017).
- Referrals through the social networking sites have doubled.
- The thousands of customers get attracted towards the online “Expert Day” chat events.
The presence of the HP Company is continuously increasing on social media with the help of strategies (Felix, Rauschnabel, and Hinsch, 2017). Below are some of the social media strategies that are followed by the HP company:-
- Provide customers a place for product feedback
- Encourage community engagement
- Create channel integration
- Designate community ambassadors
- Train social staff and set policies
On the other hand, the presence of the IBM on the social networking sites is lacking behind the other companies. IBM is one of the companies who is known as an early adopter of social networking sites. IBM became popular in 2007 and this is the reason company launched Lotus connections, a product that rolled approximately 5 social networking applications into a single integrated package. The app allowed the employees to communicate with each other through blogs, profile, community areas (Huff, 2015).
In the year 2010, more than 200,000 IBM employees were having LinkedIn accounts and out of these few workers of the IBM are available on Twitter. The support of IBM to the social media site turned into the partnership, the partnership of Twitter and IBM came into existence that provided help to many customers to engage their followers. Not only on Twitter but the company is maintaining its presence on Facebook as well. IBM is having a presence on Facebook; the main pages of IBM contain the general news and the information while other secondary pages consist of social business and career development. The company is also having a presence on Instagram, the marketing team of the company often post the images related to the IBM offices across the world, the visitors sometimes get encouraged and leave their comments and in addition, the company post stunning images of their product and corporate culture which keep the customer engaged.
Business Model Comparison of HP and IBM
The presence of the IBM on the social media sites is the strength of the company and this is also a fact that the company has to invest the huge amount on these strategies. HP strategies are generating the presence but comparing it with the presence of IBM it is lacking behind. The weakness of this dimension is that the company need to identify the proper site for promoting the products and services.
Media strategy is the plan of action that helps the company to reach their target audience through this the company will be able to improve the conversion rate. In the competitive world, the companies are shifting to the online medium to promote their products. The companies involved in the IT sector are also making an investment in the online media strategies. HP is making an investment and through this, the company is able to engage more and more customers and the company will be able to provide the technical support (Eckerle, 2017). Different companies make use of different online strategies, some of the strategies followed by the HP are given below: -
Strategy for the efficient Content: - The Company provides the content on their website which can fetch by the users easily. The customized content provided by the company engages the customers and improve the user experience. The team member of the company planned out the topics in advance on which they are going to provide the snap story.
(Source: Patel, 2016)
- The online strategies followed by the company helps the company in diverting the traffic to the right content. Providing effective and customized content help the HP to retain their customers with them.
- The customer engagement can be captured by the company through customized and attractive content; this customer engagement enhances the loyalty and repeats purchase which helps the company in generating the revenue for the company (Cole-Ingait, 2017).
Commerce: - Commerce helps the company in generating the profit through online transactions. Basically, the company made the products available online which helps the users to buy the products easily.
- Cross-sell and up-sell help the company to enhance the basket size and to improve margins.
- While trading with the customer, the company can increase the conversion through this the company can easily identify the needs of the customers. After understanding the needs the company can easily offer the appropriate products to the customers at the attractive prices (Roy, et.al, 2011).
IBM also makes use of online marketing strategies; the company makes use of different strategies through which company can increase the number of visitor towards the company. The company provides an online network for marketing and these highly relevant display advertisement attracts the visitors (IBM, 2017). This helps the company in reacquisition of the customers. The company also make use of e-mail marketing, in this, the company links online profile of customers with the certified ESP partners. The company makes use of technology with the help of which the company can collect the data of the visitors. IBM provides the product through an online store which is a convenient way for the customers to buy the product (IBM, 2017).
The education is increasing and most of the customers are becoming aware of the necessary steps before making the purchase. This is the reason the effective content will help the consumer in making the right choice for the products.
HP's Business Model Analysis
The strategy followed by the HP Company is far better than the IBM, as the HP Company promote the education ways through which they are making the customers aware of their products and services. Promoting education and generating awareness is a strength of this dimension. The weakness of the dimension is that the customers have to visit the online and then they will be able to find all the details.
The comparison of the e-business strategies of both the companies is discussed above. Both the companies are following the different dimensions and considering the comparison of the dimension below are some of the recommendations to the company.
- HP business model is not able to generate the profit for the company; the company should open their own retail markets which help the company to earn more of the revenue. The profit margins help the company in generating the awareness about the products and services that the company is offering to their customers. On the other hand, the business model of IBM is able to provide the fat margins to the company.
- Social media strategies followed by the HP is lacking behind comparing it with the strategies of the IBM. HP needs to be more proactive and the company should know form proper strategies to generate the revenue (Coupey, 2016). The IBM is having a partnership and tie-ups with the social networking site, on the other hand, the HP is making use of social media strategies need to be innovative so that company will be able to grab the attention of the customers.
- Online marketing strategies of HP and IBM is totally different, HP is having unique and innovative online marketing strategies as compared to the IBM. The IBM should work on the online marketing strategies as it is recommended to the company to bring the innovation in the strategies used by the company (Ryan, 2016). The company can divert the mind of people through online contest related to the products with small gifts. The active participation in the contest by the customer will generate the awareness about the products and engage the customers.
The report throws light on the e-business strategies of two companies, the companies selected for the comparison belongs to the same industry. The selected companies are HP and IBM which belong to the same industry but having different processes. The report shows the three dimensions on the basis of which the comparison is done. These dimensions are a business model, social media, and online marketing strategies. HP and IBM give the strong competition to each other but on the same time, each company has to bring the changes in their activities so that they will be able to make profits, success, and growth in the market. Considering the same, some of the recommendations are shared in the report.
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