The challenges to Lenovo are not over, but the case analysis has indicated that the brand is faced with significant other challenges after the acquisition.
Companies are under the pressure to release the new products faster and faster. They include; Lenovo gained instant presence and coverage outside China. However, with the intense level of competition, Lenovo felt the need of going global, and as a part of its strategy, it has performed the acquisition of IBM.
Competency in mergers and acquisitions. This is mainly because such master branding allows companies in focusing all its resources on a single brand. This has been a major challenge to the company, and the challenge also gets complex because the core principle of innovation and efficiency are integrated across the business principles of both IBM and Lenovo.
Feel free to get in touch with our professionally trained writers at essayhomeworkhelp. During the time of the acquisition, Lenovo was a strong PC brand in China Case analysis of lenovo m a ibm two decades of experience in building and selling computers to the local market.
Tablet market is expected to grow in double digits for the next few years and the company has a great opportunity to release new tablet models and benefit from the market growth. However, the acquisition of IBM has necessitated Lenovo to make significant changes across its business models so that it can target its customers worldwide.
The case analysis has resulted into the identification that IBM has realised about the declining potential of PC industry and the level of competition has also been rising.
Now, with the greater brand exposure of Lenovo supported by increased global sales, the company can justify its acquisition decision. This meant that not only does IBM have operating cash it also has interest in Lenovo, which could become profitable as Lenovo grows and expands internationally.
As a result, the PC selling business looks quite unattractive and the focus of IBM has mostly been towards providing IT consulting services. This is mainly because it needs to maintain two different brands separately and have to position their uniqueness in order to promote both of them in the global market Fill, First, the company was able to gain capital to boost its consulting service.
This is mainly because Lenovo cannot afford to lose its master brand at the same of promoting or maintaining IBM brands of product and it needs to manage both these brands.
An analysis of the case study has indicated that Lenovo has faced with brand management challenges in its operations, and it is therefore essential that there should be appropriate strategies that must be considered by them.
IBM has been known as the most reputed seller of PCs but it has changed its focus from being the seller of PCs to providing IT consulting services to its customers. There are four important positions such as cash cows, dogs, star and question mark.
The acquisition of IBM has posed challenges to Lenovo in terms of its efficient brand management. The business could increase its market share by introducing better quality products. Want to learn how to write a sample essay on Lenovo acquisition of IBM case study? The business can keep costs low, keep up with the pace, control inventory and rely less on original equipment manufacturers OEM.
The acquisition or sale of the Think Pad PC line comprised a mutually beneficial move, which is rare in an industry with a tendency for cannibalization.
Introduction An analysis of the case study on Lenovo making a global brand has indicated different major findings. This strategy has the advantage in the sense that the positive image of the sub-brand assists efficiently in promoting master brand within its target customers.
In this relation, the main advantage of this particular strategy is that each separate brand of the company creates its own image and the resulting impact is that they are self dependent.
Using Master Brand Strategy- This branding strategy implies that it requires businesses to focus specifically only their master brand while performing its promotion. Right after the acquisition, enhancing Think Pad was a good move while at the same time building the series under the Lenovo brand The ability to innovate and offer something new has been the core feature that brought higher level of success and growth to Lenovo prior to acquisition.
These are the major advantages and disadvantages of different branding strategies that have been identified. Initially, there were concerns over the success of the acquisition especially because of low rate of success of mergers and acquisitions in the PC industry. In the long-term, the expected expansion of Lenovo means the growth in the market reach of IBM.
The company achieved this status by focusing on standard functioning PCs for small and medium businesses 4. Threats Profit margin decline on hardware products.
Application of BCG Matrix:This case Lenovo's Big Opportunity, IBM? focus on Lenovo Group Limited (Lenovo), China's leading PC (personal computer) maker, acquired the Personal Computing Division of IBM.
While Lenovo views this acquisition as an opportunity to take on the global PC market, IBM hopes to enhance its foothold in China. “Announced in Decemberthe $ billion acquisition of IBM’s personal computer division by year-old Lenovo, China’s largest PC maker, made headlines around the world.” (Case Study p.1) The two companies produce complementary products, to different regions of the world.
Particularly attractive to Lenovo and the private equity investors was the opportunity to sell Lenovo’s low cost consumer products in emerging markets through IBMs extensive distribution network In addition, TPG was optimistic that Lenovo would be able to take market share from Dell and HP in the U.S.
consumer market Finally, IBM PC /5(11).
Lenovo is a $30 billion electronics company and the world’s second-largest PC vendor. It employs 30, people, operates in more than 60 countries and serves customers in more than countries.
Lenovo Case Study Essay The purchase of the Think Pad PC line appears to have been a good strategic decision for both Lenovo and IBM. The acquisition happened in December of with an announcement of the finalization of the purchase agreement for $ billion (Quelch and Knoop 1).
According to the case study, the global PC industry is highly competitive with the leading performers being Dell, HP, Lenovo and its IBM acquisition, and Acer and Fujistu-Siemens among other corporations and vendors locked in .Download