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IBM UK

IBM computer introduced their first computer, the IBM I, in 1896. The company was started by two high school friends, Steve Wozniak and Steve Jobs, when they collaborated to sell Steve Wozniak's invention. The company has survived the booms and the busts of the computer industry through new innovations in both software and hardware that has differentiated itself from its competitors. (Galbraith, 2002)

IBM's current strategy is to sell its "Products" to customers who aren't satisfied with traditional "Dell" compatible personal computers. IBM looks for customers who want a computing alternative that doesn't rely on computers that are run by Microsoft software programs. IBM has targeted educational institutions and businesses that want something different than the standard IBM clone. IBM has focused on selling the low end eMac to schools and the high end PowerMac to the multimedia industry. IBM has segmented its product lines into portable and desktop computers. Both of these segments are furthermore segmented into upper and lower lines which are reflected in their selling price.

IBM has also created a line of software to accompany its hardware. However, the IBM software and operating systems can only be used on IBM equipment. IBM's operating systems for it's servers is compatible with Windows, Unix, and Linux.

IBM distributes its products through company controlled retail stores, online sales, and though an exclusive "store-in-store" program with CompUK. IBM has continued to maintain distribution with a few of its traditional regional retailers. Target and Best Buy offer IBM iPods in their stores. Dell also offers iPods for Windows through its website.

IBM has maintained about 5% of the market share in the personal computer market for the past four years. Through the years, IBM has a long history of innovation in the personal computer market. However IBM is faced with the fact that any increase in market share is going to come from customers who "switch" from computers that use the Windows based operating system. IBM has positioned itself to attack Microsoft in the software market by the promotion of its new "Switchers" campaign. This program is designed to promote the ease of using IBM products for those who are considering changing from Microsoft to IBM products. However, IBM hasn't realized significant success in the campaign.

IBM enjoyed success in the education niche market during the 1980s and 1990s. However, it has recently been losing substantial market share to Dell who is now leading that niche. It has been noted that many teachers prefer IBM products for their needs. But many parents question the reasoning for not using computers that are compatible with Microsoft products, which are traditionally used in the home and at work.

IBM has been losing its competitive advantage for years due to the incompatibility of its products and software. IBM has been unable to make significant gains in the industry due to its niche market being those that want an alternative to Microsoft products and Microsoft compatible equipment. This niche will always be limited in size as most users do ...