Lenovo-Case Study Essay

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Lenovo. the largest Personal computer concern in China faced the intensified competition of its ain market by planetary degree companies such as HP and Dell. In effort to spread out the market internationally. Lenovo made the acquisition of IBM’s PC division. Since two organisational civilizations were different. the synergism of the merged Lenovo-IBM was required. Lenovo entitled to IBM landmark and “Think” merchandises to travel to international market and enabled to increase the market power by over dark after the acquisition.

Together with IBM gross revenues forces and distribution expertness. Lenovo employed it cost-efficiency and engineering expertness in respond to the planetary demand. During the fiscal crisis. even though. planetary Personal computer market faced the cost-cutting and diminution in net income border. the capableness and integrating of assets and competences of both companies lead Lenovo staying in the top 5 of planetary Personal computer market. Introduction In this study will turn to and analyse instance survey of Lenovo acquired for IBM’s PC division by replying the undermentioned inquiries which are: Why did Lenovo prosecute the acquisition of IBM’s PC division?

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What jobs did Lenovo Face sing post-acquisition integrating? What international scheme did Lenovo adopt. and what challenges remain in the planetary market for Lenovo merchandises? What does the current state of affairs. affecting both economic conditions and direction restructuring. state about Lenovo’s chances traveling frontward? Do you believe Lenovo’s history. direction doctrine. and current enlargement programs will make planetary demand for Lenovo’s merchandises? To better understanding relevant theories of strategic direction will be applied.

Lenovo’s environmental analysis Despite the fact that economic sciences. policy from other states and societies have impacts on the concern scheme in respond to consumers demand for merchandises and services to be improved. Undoubtedly. engineering is claimed to be mostly affected on that driven behind consumer’s penchants more. The engineering does non being addressed merely cyberspace. but besides devices besides have been increasing quickly during past two decennaries.

Furthermore. China has the significance of economic growing particularly in engineering. export and free trade which can take the possibility turning China to go the major menaces in planetary competitions ( Mann. 2002 ) . The new high-technology laptop market has been increased dramatically ( partial from Chinese market ) . in oppose to the planetary economic system where it was confronting the depression ( Nuttall and Waters. 2008 ) . However. the hardware market became less profitable during the planetary fiscal crisis that why doing the acquisitions of many companies ( Lloyd Morgan. 2010 ) .

Lenovo’s besides is one of the illustrations why. even though the greatest Personal computer Company in China backed up by the authorities support. besides seek to unify with planetary company such as IBM. Lenovo – IBM Acquisition Behind the acquisition. there are full of many grounds and benefits why Lenovo decided to take that action. Even though. Lenovo remain the leading in Personal computer Chinese market. it experienced the menaces of the new entrywaies from foreign rivals and investors such as Dell and HP one time was opened to competition that why it led its ain Personal computer and computing machine market to be more intensified.

Furthermore. since the market is full with many rivals. the Chinese authorities strongly encourages local companies to travel internationally which provides the chance to turn and spread out market of Lenovo. nevertheless. the traveling frontward to outside China needed to incorporate more of important assets and competences at the planetary degree. Acquisition of IBM’s PC division And Lenovo has contributed many benefits and expertnesss. While Lenovo has the efficient economic sciences of graduated table. IBM has experiences and more capableness in international sale force and distribution web.

For both companies. acquisition provides the deduction of two concern nucleus assets and competences in corporate degree scheme ( Dess. Lumpkin and Eisner. 2010 ) . From Lenovo positions. acquisition could successfully help Lenovo to spread out its market and enter planetary market by the facilitation of utilizing IBM hallmark and ‘Think’ merchandises. Furthermore. it allows Lenovo to derive market power and rapid growing in the planetary degree by the acquisition. Basically. sale activities. distribution web and services and solutions which IBM focuses in planetary degree could profit Lenovo in the hereafter chance.

From IBM’s PC division point of position. acquisition besides required big sum of financess which could rapidly hike the losingss of IBM’s PC division of about $ 1 billion since 2001. Furthermore. it besides provided the chance for IBM to come in Chinese market and focused more on services while fabricating map Lenovo could get by with really good. Although two different companies have the similar focal point and vision in footings of consumers-oriented and full scope of services. they are rather different in internal degree and their concern.

Problems designation after acquisition After acquisition. one of the jobs that Lenovo – IBM faces is the organisational civilization. Basically. when two civilization – different houses are formed. this could take to the trouble after integrating. Potential grounds are foremost the differences in mark market where Lenovo focuses on Low-end market seeking to accomplish the cost leading. while IBM targets High-end market offering the invention. good quality merchandises and services. Second. the direction manner. Lenovo is more ruddy – taped or bureaucratic manner ; whereas. IBM is team direction. bottom-up attack. flexibleness and more invention.

Third. due to the direction manner. it reflects in the HR direction which bureaucratism at Lenovo is more restrict on the regulations. while self-discipline reflects in IBM. Operating concern globally. it is really require company to be more diversified and originative every bit good as advanced. turn toing this the possible civilization will going similarity to IBM company and this forces Lenovo to accommodate and alter partial its behavior ( McKenna. Garcia-Lorenzo and Bridgman. 2010 ) .

Beside the internal jobs. even though. in 2009 Lenovo derive the market portion by 0. 4 % ( from 8. 2 % – 8. % ) and in Figure 1. even though the market portion in Q4 2009 of Lenovo addition by 1. 4 % from Q4 2008. Lenovo faces the challengers who tend to increase the market portion from Personal computer market forced Lenovo down to the 4th rank from the 3rd after the acquisition ( Annonynous. 2009 ) Although. economic sciences of graduated table is the competitory advantage Lenovo has. the demand for monetary values of Personal computer computing machines are take downing and decreasing net income border of the company. The possible struggles occurred when two companies are integrated ; yet. these issues could turn to be the challenges for Lenovo – IBM required new strategic development and execution.

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