The acquisition IBM PC division by Lenovo is a corporation that was essential for both to survive in the highly changing and competitive global PC market. Faced with the imminent china’s entry into the World Trade Organization (where thither will be equal playing field for Lenovo as well as the foreign PC players), Dell’s introduction of direct bargain model in mainland China (where Lenovo’s role as a foreign PC distribution will be eroded), rise of Chinese Manufacturing giants, much(prenominal) as Haier, into the PC markets and the new upstarts and grey markets providing cheap PCs, Lenovo was at a cross-road of sticking with localization or globalization. Lenovo was at that sequence China’s market leader (21% market share), who is cognize to make functional and affordable PC for the Chinese consumers, as well as distributor of foreign branded PC. found on its local competencies, Lenovo was unable to deploy its resources internationally to demote Lenovo into a global brand.
IBM, on the other hand, was able to in conclusion sell off the unprofitable PC business and concentre on its core business, which are on consulting services and middleware solutions.
Beside, the integration of the PC heavyweights (Compaq/HP and Gateway/eMachines) forced the rest to nub forces in order to be more cost efficient. establish on the Lenovo and IBM profiles, they are a good match in term of product type (Lenovo has 85% total sales event on desktop, and IBM has 60% total sale on laptop), leaf node base (Lenovo attributes 80% sales to small business and consumers, and IBM attributes 50% sales to large enterprise/mid-market) and coverage (Lenovo is mostly in China, and IBM is strong in the world, except China). The other complementary advantages entangle the fact that Lenovo can access to IBM’s 30,000-members enterprise sale team and ongoing support from partner and channel commission in 138 countries. IBM in return will gain profound operational cost benefits on its supply...If you want to get a full essay, order it on our website: Ordercustompaper.com
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