 | « Back to article | Print this article |
IBM is set to spend $1.6bn over the next three years as its hunt for growth takes it to smaller markets in the emerging world that have not previously been a focus of its efforts, according to an internal memo from its chief executive.
The attempt to tap a wider range of developing countries comes as IBM's earlier investment in the four biggest - Brazil, Russia, India and China - has started to pay off.
Though still only a small part of its total revenues, business in these countries accounted for a quarter of IBM's growth last year and plays an important part in the longer-term financial goals that Sam Palmisano has set.
In an e-mail to senior management, the IBM executive wrote of "a significant shift in our approach to the global marketplace" as the company sought to organise itself to deal with opportunities outside its normal scope.
"Too often in the past, because we've built our plans by starting with our traditional markets, we haven't focused sharply enough on the opportunities being generated elsewhere," Mr Palmisano wrote.
He outlined changes designed to help IBM reach newer, smaller markets with long-term potential.
One part of this would involve addressing the needs of these countries earlier in IBM's planning process.
"We will focus first on how to capture all the growth in the emerging markets, and then adjust our plans to serve the more traditional markets appropriately," Mr Palmisano said.
"This is quite a change in our mindset."
Another dimension of IBM's refocusing will involve creating a unit, underDough Elix, a senior vice-president and head of sales and distribution, to design new business approaches suited to smaller emerging markets.