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Unisys’ Digistics service keeps pets and their owners in touch high up in the skies
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Unisys is ending the week on a high note as its full-year results met or exceeded guidance.
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Unisys is a company specializing in Information Technology Solutions for businesses in over 100 countries. The firm is located in the Technology Sector, Specifically Information Technology Services Industry with 22,900 Full Time Employees with a headquarters located in Blue Bell, PA.

Business Overview:

Unisys (NYSE: UIS) is a firm that operates as an Information Technology company around the world. The firm has two major segments; Services and Technology. Unisys provides solutions leading to higher productivity and improved competitive positioning for transportation, communication, financial, and public sector firms.[1]

The business focuses on delivering their expertise in delivering Consulting, System Integration, Outsourcing, Infrastructure, and Service Technology to the following market areas: Security, Data Center Transformation and Outsourcing, End User Outsourcing & Support Services, Application Modernization & Outsourcing. [2]

Business Segments:

Services Segment:

This segment provides outsourcing solutions including data centers, business processes, system integration and consultation services for security, IT infrastructure, and other business specific needs[3]

Technology Segment:

This segment provides development and implementation of data center services and server systems from the actual servers to the computing environment and other middleware systems. [4]

Marketing Mix:

Unisys gets 88 percent of its revenue from its services that it provides to other companies in the realm of Information Technologies. Therefore Unisys has developed their marketing mix differently from that of retail or good based companies.


Unisys has a promotion base of innovation, which it attributes to extraordinary minds, thought leaders, and its solve, improve, and change approach to helping a business achieve maximum efficiency. This greatly helps Unisys receive business from companies and corporations that want to focus on their core competencies and run efficiently in today’s fast paced business environment.


This leads to the product to which they provide, inherently in this line of business being a very valuable service. Information Technology can be very complicated without outsourcing to another company therefore giving Unisys an advantage to gain more business from those that believe in this form of marketing, information gathering, and securing data.


When inquiring about place within the marketing mix, this is where Unisys does not truly define a said place as opposed to its headquarters in Pennsylvania, mostly because it uses the internet frequently to make themselves available to all companies worldwide for a greater ease of communication and relative flexibility for its diverse types of customers. Unisys attributes this to its vast business with government, hybrid enterprises, technology and ease of outsourcing.


The price of the Unisys advantage can in many cases be irrelevant as long as the consumer is making more money with the information that Unisys ends up providing in its research areas, mostly because businesses with the Unisys advantage are tapping into unused resources and customer bases that were previously unused assets. As for a supply chain model Unisys does not have high costs due to its intangibility in the service it provides. There is no real shipping cost for internet services dealing with Information Technology, but does run a very efficient model using its self instituted practices of flexibility. [5]

Financial Operating Metrics & Cash Position

Technology companies succeed through their ability to discover, develop, and market products that use the innovative technologies they develop. When evaluating any technology company, several important financial metrics come to mind that reflect a company's ability to use resources to create value propositions. Research & Development Expense is an important component of any successful technology company’s expenses, allowing them to create innovative technologies that provide unique competitive advantages. R&D is an important driver of new products, higher margins, and market share. One useful metric used to compare the effectiveness and efficiency of R&D expenditures between companies is the R&D/Sales Ratio.

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Unisys has showed dramatic decreases in R&D in the past three years due to large changes in the company’s development model. Unisys has focused their investments on the more profitable service-based areas of the information technology marketplace, such as Cloud Computing, security, and outsourcing. This restructuring has reduced Unisys’ 2010 R&D to $78.9 million compared with $101.9 million in 2009 and $129 million in 2008[7]. This drastic decrease in research and development investments can be unsettling as it is the core component of a technology company’s ability to create the innovative technologies that differentiate their products and services from their competitors. Many technology firms are tempted to cut back on R&D expenses during hard times. These cuts usually make sense as demand and production decrease, but firms must be careful not to sacrifice future growth potential for today's benefit. During an economic downturn, Unisys’ strategy of trimming fat and focusing R&D investments on high value areas is not uncommon and can be successful if these investments are chosen carefully. Unisys' ability to create unique value propositions and refocus R&D expenditures on high value areas within the industry will be essential to reverse the shrinking profit margins and revenues seen in recent quarters.

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Although divestitures have caused quarterly revenues to decline, earnings numbers are only half of the picture. Management's recent cost cutting measures have improved Unisys' profit margins from a -13.83% low in Q2 2006 to 10% in Q4 2010.[9] These changes have helped improve Unisys' cash position as operating revenues have skyrocketed in recent quarters. Over the past year, Unisys has been able to convert 6.8% of its revenues into free cash flow which it used to retire over $200 million in debt. [10]

Unisys' decision to retire a large chuck of its debt could help improve its junk credit rating. An improved credit outlook would help Unisys reduce its borrowing costs which are about 12 times those of Affiliated Computer and 48 times those of IBM.[11] Decreased borrowing costs could free up additional cash to allow Unisys to increase R&D expenditures or retire additional debt. Effective management of cash and debt levels will be important for Unisys if sales continue to decline and credit markets remain tight.

The Threat of the Entry of New Competitors

When there is a profitable market that has a high growth rate and profit return there will be a result of new entrants that yield high returns will attract new firms. When there are new entrants in the market sector, it will decrease the company’s profit unless they fully understand how to hedge against new competitors. One way of doing this is the existence of barriers to entry such as getting certain products patented and owning rights. Additionally, establishing brand equity is another way to hedge against competitors such as IBM, EMC, Oracle and Microsoft. Unisys offers a service that helps clients secure their operations and maximize the utilization of data centers, getting their clients to lock into a contract would be ideal for them so that customers would have to pay a high unattractive high price to switch to a competitor.

By Unisys having a strong access to their distribution center, this provides the company to easily communicate with their distributors and can provide new innovative products efficiently. “Unisys Corp. said late Wednesday its New Zealand subsidiary has received an extension to its contract to provide the country’s biggest grocery distributor with information-technology services” [12]. Customer loyalty to established brands is a very important part of Unisys business; this is because this will raise the potential of gaining new customers. “We are delighted to continue our 14-year relationship with Foodstuffs -- an iconic brand and organization in the New Zealand market” [13].

This chart explains the target audience for Unisys. Given the overall high level of extreme security concern in the younger audience, this demographic is key to focus on. With Unisys technology this division of the population can trust their information online, ultimately creating more business for Unisys's customers.
This chart explains the target audience for Unisys. Given the overall high level of extreme security concern in the younger audience, this demographic is key to focus on. With Unisys technology this division of the population can trust their information online, ultimately creating more business for Unisys's customers.

The Threat of Substitute Products or Services

The presence of products outside of the common product boundaries increases the vulnerability of customers to switch to competitors product. One of the main reasons that a customer would switch to an alternative product would be the relative price of the substitute product. If a customer can get the same product for a cheaper price, this usually will lead to a substitute. A way to hedge against this is the high expense of buyer switching cost; this will force the customer to realize that switching to a competitor like IBM or Microsoft isn’t cost effective. Gaining customers perceived level of product differentiation and a high customer satisfaction is something that Unisys puts a heavy focus on. “Frost & Sullivan, a global growth consulting company, has awarded Unisys Corporation with its "2004 Customer Service Award." [14]. Looking at the number of substitutes for Unisys in the industry is substantial, this is another reason that it is extremely important for Unisys to provide every customer with the best value and quality of service possible. “Frost & Sullivan wrote that in drawing up its plans for the next-generation platform, Unisys worked to include its customers' requirements as part of the final product feature list” [15].

The Bargaining Power of Customers (Buyers)

The bargaining power of customers is affected by the customer's sensitivity to price changes. Unisys’ clients vary from large corporations to the different fields in the government. Since the business of information technology is growing at such a huge rate this gives clients the ability to switch to many competitors since the availability of substitute products is so high. Unisys tries to take advantage of the uniqueness of their services and focusing on the services side of the company rather than selling equipment. This is lead to an 88% revenue increase as oppose to the 65% increase the prior year.

The Bargaining Power of Suppliers

The bargaining power of suppliers is heavily depended on the price of supplies of raw materials, the labor, and services of the product. “Unisys purchases components and supplies from a number of suppliers around the world. For certain technology products, the Company relies on a single or limited number of suppliers, although the Company makes every effort to assure that alternative sources are available if the need arises. The failure of the Company’s suppliers to deliver components and supplies in sufficient quantities and in a timely manner could adversely affect the Company’s business.” [16]. A lot of a companies offer the same services that Unisys does, charging a fair price is also going to attract more customers. The supplier bargaining power in the sector of information technology has high substitutes for a product.

The Intensity of Competitive Rivalry

The competitive rivalry for Unisys is extremely high due to the amount of substitutes available in the industry. Unisys strides to be innovative, this will help them hedge against their competitors such as IBM, Oracle and Microsoft. Unisys does this by having effective data center transformation and outsourcing. This will lead to an efficiency of a company’s data centers. Additionally, modernizing a company’s critical business applications, and helping their clients secure their operations. By Unisys working with top companies such as Dell, TSA, and the IRS gives the company an amazing reputation compared to their rivals. This can have a significant effect new companies choosing Unisys over a competitor because they see their high reputation with powerful companies and the government.

SWOT Analysis


Unisys Corporation has many strengths. One of their main strengths is providing security for companies. They help their clients secure all facets of their operations including their employees, assets and data which creates more dependability and less risk for the company. They are also great at outsourcing. In outsourcing, Unisys manages a customer's data centers and also specific business processes, such as check processing, insurance claims processing and others which allow that company to focus on its own core competencies. For their consulting area they develop and design new solutions for certain industries. [17]


Unisys doesn’t have many weaknesses but rather they have been involved in quite a few of controversies. In October of 2005, it was reported that the company had supposedly overbilled on their Transportation Security Administration contract for almost 171,000 hours of labor . [18] In 2006, there was an investigation involving Unisys that accused them of cyber security slip-ups under the company's contract with the United States Department of Homeland Security. Supposedly a number of slip ups occurred during the contract and even included an incident where data was transferred to Chinese servers. In 2009 Unisys bragged about firing American workers. Richard Marcello, president of technology and consulting at the time, said "We were able to eliminate a whole bunch of actually U.S.-based jobs and kind of replace them with two folks out of India”.[19]


Unisys is working on a plan to package together existing and a few new consulting and management services in order to help enterprises better manage various cloud implementations. The company already offers Cloud Advisory Services and Cloud Management Services. It is adding new planning, design and implementation services and packaging the existing and new programs into what it is calling CloudBuild Services. Unisys believes that the other cloud services vendors out there just focus on the processes layer and management tools. Unisys wants to take other important factors of the cloud service into consideration such as network performance, storage model, and how the vendor handles separation of applications. [20]

Human Resources

Human resources involves workers who are in charge of the organization and responsible for implementing strategies and policies that relate to the management of individuals. It is a very important part of a company’s success and ultimately decides how much the company can grow and achieve. Human resource managers seek to achieve this success by arranging the supply of skilled and qualified individuals and the capabilities of the current workforce, with the organizations’ ongoing and future business plans and requirements to maximize return on investment and secure future survival and success.

Patricia A. Bradford is a senior vice president of the Unisys and has served as vice president of Worldwide Human Resources since January 1, 2005. Patricia’s main task is to work with the Unisys management team to continue to improve the efficiency of Unisys employees and improve organizational success by applying leading-edge ideas in the areas of training, recruitment, retention, and evaluation. Before Patricia was vice president she had a three year assignment in Europe that led the Unisys team to develop many of their key human resource procedures and solutions in the areas of skills assessment, flexible work solutions, performance management, and career management systems. As a whole, Unisys’ main goals are achieving operational efficiencies, managing the talent supply, improving the delivery of HR services, and developing leadership but all while trying to considerably reduce general and administrative expenses. [20] Unisys also offers a wide array of employee benefits. Some of the things offered are medical and dental benefits, short and long-term disability, life insurance, and an employee assistance program. They also offer a 401(k) retirement plan along with paid time off for vacation and holidays.[21]

Product Portfolio:[22]

  • Health and Human Services: Offers efficient and very secure solutions for private and for government agencies to protect and maintain assistance programs.
  • Integrated Court Management: Offers a highly customizable solution to improve flow of information between court systems, reducing costs to the tax payers.
  • Enterprise Payments: Offers outsourcing capabilities for enterprise transactions around the world.
  • Insurance Solutions: Offers highly modularized life, pension, property and casualty solutions.
  • Retail Delivery: Offers cost-saving productivity and ability to meet rapidly changing expectations and increased customer satisfaction.
  • Mortgage Solutions: Offers low risk and maximized productivity to implementing solutions to increasingly complicating mortgage regulations including: Mortgage Origination and Mortgage Servicing.
  • Airline Passenger Services: Technological Solutions for airliners, servicing over 20% of the world’s air passengers with their services to date (2011 data).
  • Airport Operations: Improvement of management, passenger services and security within airline clients around the globe.
  • Enterprise Content Management: Offers highly complex solutions to business structures and helps businesses cope with explosive growth.

Unisys has a long standing history of nearly 140 years bringing many new things to the world: [22]

Historic Events for Unisys
First Commercially Viable Typewriter (1873)
First Portable Adding Machine (1925)
Involvement in ENIAC (First General Purpose Computer) (1946)
First Commercial Use of Random Access Memory RAM (1953)
Master Systems Integrator for Beijing Airport during 2008 Olympics (2008)
First Adding-Subtracting Machine (1911)
First Electronic Typewriter (1925)
First Business Computer (1949)
First Dual-Processor and Virtual Memory Computer (1961)
Private Cloud Solutions (2010)


  1. UIS Profile Retrieved From Yahoo Finance April 20th 2011
  2. Unisys Company Profile
  3. Company Profile Focused on What Matters
  4. Company Profile Focused on What Matters
  5. Unisys Corporate Website
  6. Unisys Corporation R&D %: 5.84% Chart
  7. Unisys Annual Report 2010 - Consolidated Statements
  8. Unisys Cash Flows
  9. Unisys Profit Margin until April 2011
  10. Is Unisys Making You Any Cash?
  11. Bloomberg: Unisys Debt Outlook
  12. Unisys keeps New Zealand grocery distributor contract
  13. Unisys to Support Mission-Critical In-Store Systems for Foodstuffs, New Zealand's Leading Grocery Distributor
  14. Customer Service Award April 21st 2011
  15. Customers' Requirements April 21st 2011
  16. Unisys Theme Retrieved from Unisys-Website April 22nd
  17. UNI Company Profile Retrieved From Unisys Website April 22nd
  18. TSA History Retrieved From TSA Website April 24th 2011
  19. Cloud Computing Retrieved April 24th 2011
  20. 20.0 20.1 UIS Cloud Computing April 17th 2011
  21. UIS Career Retrieved April 19th 2011
  22. 22.0 22.1 UIS Industry Applications Retrieved April 24th 2011
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