Lenovo’s Acquisition of Ibm’s Pc Division

Case study Lenovos Acquisition of IBMs PC instalment: A Short-cut to be a World Player or a Lemon that Leads Nowhere? 1. General presentation 2. Identification of problem, causes and shun effects Strategic problem definition: Acquisition of IBM PC category as part of the expansion strategy. Causes: Lenovo was number 9 on PC marketplace and had 2.2% market contribution worldwide and therefrom it wanted to increase its market share position. Lenovo became a market leader in China with 27% market share and wanted to expand. They first tried to diversify into non-PC areas but they failed and whence they decided to concentrate only on PC-products. The PC-products expansion was easier by acquisition because opening subsidiaries would have been costlier. The need to expand was similarly motivated by the competitive pressure pushing for a lowering of the production cost. Negative effects Losing opportunity of economies of scale. Inability to lease cost competitiveness. Other expansion strategies might be to a fault difficult to apply and it would take a lot of snip to get the same access to international markets in opposite ways. 3. Alternative solutions 3.1. Acquisition of IBMs PC division.

Advantages: Increase in market position. Guaranteed presence outside of China. Capitalizing on the IBM brand. Managerial know-how spill-over. miserliness $200 million per year. Benefits from the reputation of IBM products (ThinkPad, ThinkCentre). Assertion of leverage on global market. The combined entitys global infrastructure would suffice drive cost savings by marrying an efficient bring chain with a low cost manufacturing base.... If you want to get a full essay, order it on our website: Orderessay

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