PESTEL Analysis for IBM

IBM PESTEL AnalysisInternational Business Machines (IBM) is the world’s largest computer company. It was established in 1911 as a punch card tabulating machine producer and has come to dominate the computer world as we know it today. Below is a PESTEL analysis for IBM.

Political factors

  • Since it is a multinational company, it faces challenges with taxation. Higher taxation makes IBM products expensive in places like the UK and therefore it is a weak company in relation to rates. IBM therefore must be aware of the different tax rates to operate within normal parameters of international trade.

Economical factors

  • Inflation rates and Gross Domestic Product play a major role in the buying power of clients. When a country experiences recession, it affects the purchasing power of potential customers. If a country has a strong GDP then it can provide healthy market for IBM.

Socio-economic factors

  • IBM benefits from a large number of internet users. This is especially so in a world where everyone is beginning to lean towards a technological lifestyle. The company however, has to be able to change its approach to suit a particular group’s lifestyle.

Technological factors

  • Technology is the main focus of IBM. The company must be able to strike a fine balance between the pros and cons of technology because in as much as it is beneficial, technology can also be highly destructive. The company can develop new innovative products that give it an edge over competitors.


Also see IBM SWOT Analysis

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