Management of IBM - Dissertation Example

?Research Report for the Management of IBM By Mentor Letter of Transmittal IBM Management Address Dear Sir/Madam Re: IT Industry Customer Benchmark Survey Pursuant to your request, I have conducted an examination of the referenced survey and the data it intends to solicit. An analysis of the survey was conducted with a view to determine if and how it can be improved to meet IBM’s objectives. My findings and recommendations and contained in the report attached to this letter. Yours truly Contents Letter of Transmittal 2 Contents 3 Executive Summary 4 Introduction 5 Report Analysis 6 Surveys as a Method of Research 6 IBM’s Survey: An Analysis 7 Recommendations 10 Conclusion 11 Bibliography 12 Executive Summary IBM has established itself as a leader in the production and distribution of software and hardware products and is listed among Fortune 500 top companies (Malhotra 2010). Its major competitors are Hewlett Packard Co. and Microsoft Corp (AOL Daily Finance, 2011). In order for IBM to remain competitive and to remain at the top it has to ensure that not only its managers and the decision-makers, but also its customers are content with the products that IBM offers. In this regard, IBM generated an annual IT Industry Customer Benchmark Survey (Malhotra 2010, p. 826). The survey results are used to help IBM’s management and decision-makers gain an understanding of how its customers perceive IBM’s competitors. This report examines the survey for its intended purpose and determines the extent to which the survey can generate the intended data for optimal analysis. This research report will identify any weaknesses in the survey and will make recommendations for improvements so that any gaps between IBM and its competitors in terms of customer advantages can be closed in IBM’s favour. The research report provides a background, an analysis of the data, offers some recommendations and provides a conclusion. It is hoped that this report will aid IBM in its quest for tactical and strategic decision-making relative to keeping IBM at the top of the IT industry and for preventing a return to the problems of the 1990s. Ultimately, this report is generated so that IBM’s surveys produce data that informs IBM of where it stands relative to its competition and how it can improve its position or at the very least sustain its current position. Introduction During the 1990s IBM acquired a reputation as a “sinking ship” (Malhotra 2010, p. 825). However, leadership and management within the business has reversed this situation so that IBM is once again in top of the IT industry earning US$103.63 billion in 2008 and is now regarded as the world leader in computer hardware and software products and services. The fact is, IBM maintains leadership in virtually all of the markets that it competes in. (Malhotra 2010, p. 825). At this point, IBM has virtually all the products and services that it needs to effectively compete in and retain leadership in the IT industry. IBM has made significant changes since the 1990s in reorganizing its “hardware business, merging its desktop and laptop operations” and in 2004, IBM made plans to merge “technology (microchips) and systems (servers, storage) groups (Malhotra 2010, p. 825). In order to maintain the lead and to remain competitive IBM conducted a survey entitled the IT Industry Customer Benchmark Survey in 2008. The survey was directed at company officials who make purchasing decisions and respondents were able to choose IBM or one of its competitors as the subject of the survey. The purpose was to provide IBM’s management with the data necessary for making “strategic decisions to improve IBM’s standing in the eyes of its customers” (Malhotra 2010, p. 826). This report conducts an analysis of the survey itself and determines whether or not it can be improved upon to obtain the intended results. In other words, this report analyses the IT Industry Customer Benchmark Survey, the purposes for which it is intended to be used and identifies how the survey meets that purpose and/or can be improved to meet the intended purpose. The fact is, the IT industry is a fiercely competitive industry and consumers whether corporate or individual are constantly and quickly looking for upgrades and changing their preferences (Zairi and Leonard 1996, p. 235). It is necessary to consider whether or not the redistribution of a survey annually can effectively measure customer preferences and attitudes. It may be necessary to amend or alter the survey each year or to use an entirely different method for measuring customer preferences and attitudes toward a specific IT provider. Report Analysis Surveys as a Method of Research Marketing research is concerned with collecting information from or about consumers and as such the target is human conduct. Surveys, are one way of collecting that information. The information collected from a survey is regarded as primary data since the information is “based on communication with a representative sample if individuals” (Zikmund and Babin 2009, p. 146). Surveys divulge “a snapshot at a given point in time” (Zikmund and Babin 2009, p. 146). Survey results are based on the assumption that they represent the manner in which the actual targeted population would likewise answer the survey questions. The term survey itself is associated with quantitative data since it is typically descriptive in nature (Zikmund and Babin 2010, p. 146). Surveys are useful for obtaining demographic information that sets the baseline for the collection and analysis of other information in a survey. The other relevant information in the survey relates to opinions, perceptions, preferences and attitudes as well as spending habits (Kurtz, MacKenzie and Snow 2010, p. 240). IBM’s Survey: An Analysis While some surveys may request information that is qualitative in nature, IBM’s 2008 survey is entirely quantitative because it seeks to quantify at least three different areas of inquiry and is focused on industrial purchasers rather than the ultimate consumer. IBM’s survey requires that participants meet a specific requirement in terms of a management role in the IT company and that the employee numbers meet a specific benchmark. Secondly requests participants to select only one from a number of IT providers including IBM. The idea is to ensure that participants in the survey have sufficient knowledge of the current use of and future IT needs of the organizations in which they have a management position. The participant is also required to be in a position to have had contact with an IT provider and be in a position to influence the use of specific IT providers. In other words the, information collected is therefore sufficiently robust for quantification. Based on the criteria for participating in the survey and the categories in the survey, the survey has multiple objectives. First the survey canvases the participants’ view of the services and products of the IT provider selected in the survey. A number of areas are used to quantify this view. The areas include customer satisfaction, perspective on service and product quality, the company’s position in the market, its ethics, innovation, financial standing, its trustworthiness, its leaders, its treatment of employees, community involvement and its advertising. Secondly, the survey seeks to measure the participants’ plans to purchase or continue purchasing from the IT provider selected. Thirdly, the survey seeks to determine the participants’ view of the sales and service support in a variety of ways. The areas of inquiry are quality of the account representatives, products and services, non-technical customer service, technical support and training. The final part of the survey seeks to measure future trends in the participants’ organization. The benchmark period is the next 3-6 months. The areas of inquiry attempt to determine the IT needs and desires of the organization. The survey questions are closed-ended. In this regard, the questions provide for categorically scaled responses where the participant is merely asked to rate his or her response on a scale from 1-5 representing the level of satisfaction or the level of approval or likelihood of future purchase and so on. The number 9 is inserted in each question’s response, leaving the participant with an opt out as 9 represents “don’t know”. Closed-ended questions are described as questions multiple choice questions leaving the participant with a range of choices (Burrow 2009, p. 144). There are no open-ended questions in the survey which may be a mistake. An open-ended question permits the participant to compose his or her own response. An example of an open-ended question is “what are the most important features of this product” (Burrow 2009, p. 144)? Open-ended questions permit the participant to be more honest and original and are thus more reliable than coded or categorically scaled close-ended questions (Wright and Marsden 2010, p. 425). However, open-ended survey questions are difficult to code and quantify as the responses are likely to vary from participant to participant and thus may not be comparable. Moreover, if a large sample population is the target, quantification is virtually impossible (Fowler 1995, p. 179). Coded closed-ended questions are therefore the best method for quantifying responses from a large population and for conducting follow-up surveys as IBM intends. However, the “don’t know” option is not a good idea as it provides the respondent with an out and increases the chances of not obtaining a response to questions should the respondent for some reason not want to answer a question (Lavrakas 2008, p. 96). Another difficulty with the survey is the long list of organizations from which the participant may select from. There is no indication of why the participant may choose one company over another or why the information collected in the survey will help IBM to understand how it stands in relation to a competitor. A respondent may select Microsoft and may indicate that it has a good opinion of Microsoft, its products and services and yet has no plans to purchase from Microsoft. In such a case, it is unclear how IBM intends to use that kind of information to inform where it stands in relation to competition with Microsoft. Moreover, a company may select Microsoft and express a negative opinion of the organization yet indicate that it intends to purchase from that organization and continue to do so. Again, this kind of information does not really inform IBM of where it stands in relation to its competition with Microsoft. The long list of organizations from which the respondents may choose makes it easy for the respondent to simply choose from among the top or the bottom with no real consideration for why it chooses that company. The motive may just be in the interests of time. The use of such a long choice of subjects would therefore render a chi square statistic which is used for evaluating whether or not a link is significant from a statistical perspective, unreliable. Moreover, with respondents able to select from such a long list of subject organizations, performing a phi correlation coefficient is unreliable as it measures the significance of links. It is difficult to follow a link when the respondents are free to choose from among many different organizations. If the respondents each choose a different organization or if they heavily favour one organization, it will be difficult to measure the level of strength of association. Another issue is the fact that IBM may not be chosen at all and even if it is chosen, it may only be selected by a very small number of participants. Therefore IBM may not receive sufficient data to make meaningful management decisions. In addition, participants may not choose IBM’s main competitors with sufficient frequency to inform IBM of where it stands in relation to its competitors. Therefore, while the coded closed-ended questions can provide researchers with quantifiable data, there is a risk that the survey will not produce sufficient responses to enable a reliable or robust data comparison. The survey is long in that it contains 28 questions. Ideally a survey should be concise and should not be too time consuming as this increases the risk of bias. The bias arises out of the time involved which compromises the opportunity for sustained interest and attention. Scaled questions should also only provide 3 scales (Wild and Diggines 2010, p. 116). As noted IBM’s survey includes 5 scales with an additional number 9 which is essentially and opt out of the question choice. Recommendations Based on the foregoing discussion it is recommended that IBM keep the closed-ended question approach to the survey. As previously noted, closed-ended questions provide responses that can be calculated and coded and therefore provides data that can be used. The fact is marketing research results must be understood in terms of how marketing research is defined. In this regard, marketing research is defined as: A clearly defined search for answers to some questions, which if answered would lead our company to make critical marketing decisions on a strategic or tactical level (Nargundkar 2003, p. 5). The answers sought by IBM are obvious and those answers are intended to inform of the strategic or tactical marketing decision that IBM will make. While the close-ended questions will provide the data, it is not altogether clear how the data from unknown and difficult to predict company selections will be useful. It is therefore recommended that the survey reduce the number of choices and IBM should be removed from the selection process. However, if IBM wants to determine how many participants select IBM, then it should be left in the company selection list. Even so, a separate survey should be generated and this survey should specifically be all about IBM and no other company. It is also suggested that the survey questions be narrowed down so that there are only twenty or so questions in the survey. This will reduce the opportunity for boredom and lack of sustained interests thereby reducing the risk of bias. It is also suggested that the scales be narrowed down from 5 to three as further precaution against lack of interest. Moreover, the Number 9 (“don’t know”) option should be removed since it essentially provides respondents with an option to refuse participating in a meaningful way in the survey. While open-ended questions are difficult to quantify and can be time consuming, one or two questions should have been included in the survey. The open-ended question may engage the respondent and also gives the respondent an opportunity to have some measure of control over the survey. It would also personalize the survey and solicit an honest response capable of giving the marketing researcher keener insight into the respondents’ own feelings. Conclusion Having examined IBM’s IT Industry Customer Benchmark Survey and the purpose of the survey it is obvious that IBM’s sole research purpose is to determine what decisions it can make to ensure that IBM remains at the top of the IT industry. This report identified the weaknesses inherent in the Survey and suggest ways in which the Survey can be improved in for future use. In the final analysis, IBM wants information that it can use productively. Presumably, a survey is used so that a large sample population can be canvassed. However, the survey must be structured and contextualized so that the data collected is meaningful. It is hoped that the recommendations made in this report will accomplish this. Bibliography AOL Daily Finance, (28 July 2011) “International Business Machs.” http://www.dailyfinance.com/company/international-business-machines-corporation/ibm/nys/top-competitors (Retrieved 27 July 2011). Burrow, J. L. (2009). Marketing. Mason, OH: South-Western. Fowler, F. (1995). Improving Survey Questions: Design and Evaluation. Thousand Oaks, California. Kurtz, D.; MacKenzie, H. and Snow, K. (2010). Contemporary Marketing. US: Nelson Education Ltd. Lavrakas, P. (2008). Encyclopedia of Survey Methods, Volume 1. Thousand Oaks, California: SAGE Publications, Inc. Malhotra, N. (2010). Marketing Research: An Applied Orientation. London, UK: Prentice Hall. Nargundkar, R. (2007). Marketing Research –Text and Cases 2 E. New Delhi, India: Tata Mcgraw-Hill. Wild, J. and Diggines, C. (2010). Marketing Research. Cape Town, South Africa: Juta and Company Ltd. Wright, J. and Marsden, P. (2010). Handbook of Survey Research. Bingley, UK: Emerald Group Publishing Limited. Zairi, M. and Leonard, P. (1996). Practical Benchmarking: The Complete Guide. New York NY: Chapman and Hall. Zikmund, W. G. and Babin, B. (2010). Essentials of Marketing Research. Mason, OH: South-Western Cengage Learning. Read More