IBM places big bet on business potential in developing areas
By 2010, IBM will have invested $1.6 billion on new marketing and sales programs in Southeast Asia, Latin America, Eastern Europe, Africa and the Middle East as part of a just-announced new business initiative for developing markets. The program will expand the marketing focus that has yielded double digit growth rates in the so-called BRIC countries of Brazil, Russia, India and China. The company has reported a 22 percent compound annual growth rate for the past 3 years in those growing markets.
Doug Elix will lead the new sales and marketing program, which will seek out new growth opportunities in areas where GDP growth and IT growth rates are running ahead of more established markets.
IBM CEO Sam Palmisano called the emerging markets initiative "a significant shift in our strategic approach to the global marketplace" and that "action, speed, agility and flexibility will be the hallmarks of the new business model for these countries."
He also said lessons learned in these new markets would be applied where appropriate to more established markets in the future.
The announcement was made in a chairman's memo to IBM executives and reported in the Wall Street Journal's Thursday, December 13, edition ("IBM Sets Its Sights On Smaller Markets" by William M. Bulkeley, Page B4).
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