Q1. Explain the success of Lenovo (and other companies from emerging markets) on global markets?
Lenovo first had its success in China, then it ventured into different other emerging markets such as India and Russia. The main factors of its success in China are as follows
Aggressive Pricing: Lenovo priced its products above local competitors but low in comparison to foreign competitors. It could do that due to its low costs. Lenovo provides high quality products at low price.
Distribution Strategy: One of the main reasons for Lenovo’s success in China is its distribution and sales channel during its early years while selling PC’s of other foreign companies such as HP, Dell, IBM it learnt the lessons and applied it while selling its own PC’s …show more content…
Absence of trade restrictions: Lenovo benefitted in its early years when Chinese govt did not impose any trade restrictions such as quotas, tariffs, Value added taxes on imports, restrictions on ownership and investment
Association with Govt: Lenovo also benefitted with its association with the Chinese Govt. For success in global markets Lenovo chose the path grow through Mergers and Acquisitions which was a risky process in line with this strategy it acquired IBM’s PC division this provided all the advantages of IBM to Lenovo. It also bought Medion in Europe which doubled its share of Germany’s PC market. In Japan, it entered acquired NEC which helped Lenovo become largest PC maker in Japan.
Q2. Why did Lenovo choose for the M&A route (by taking over IBM) of going …show more content…
In 2004 , IBM approached the company asking them to acquire there PC business, there were various risks involved in this , but the company chose this route to go global citing a few well thought out reasons
They already were the market leaders in china with almost no room to expand, so going global with a brand name of IBM which is already well established was the logical step to be taken.
They did not have the risk to loose customers as they were taking over the entire company as it is including the CEO, sales team and other work environment, which gave Lenovo the advantage of providing the customers with same level of quality and service after the acquisition.
The acquisition made Lenovo the 3rd largest PC manufacturer in the world.
Moreover, Lenovo could gain control over IBMs world class technology, managerial prowess and amazing R&D team in addition to their own experience and expertise which helped them become the global leaders they are now from being a local Chinese
Lenovo first had its success in China, then it ventured into different other emerging markets such as India and Russia. The main factors of its success in China are as follows
Aggressive Pricing: Lenovo priced its products above local competitors but low in comparison to foreign competitors. It could do that due to its low costs. Lenovo provides high quality products at low price.
Distribution Strategy: One of the main reasons for Lenovo’s success in China is its distribution and sales channel during its early years while selling PC’s of other foreign companies such as HP, Dell, IBM it learnt the lessons and applied it while selling its own PC’s …show more content…
Absence of trade restrictions: Lenovo benefitted in its early years when Chinese govt did not impose any trade restrictions such as quotas, tariffs, Value added taxes on imports, restrictions on ownership and investment
Association with Govt: Lenovo also benefitted with its association with the Chinese Govt. For success in global markets Lenovo chose the path grow through Mergers and Acquisitions which was a risky process in line with this strategy it acquired IBM’s PC division this provided all the advantages of IBM to Lenovo. It also bought Medion in Europe which doubled its share of Germany’s PC market. In Japan, it entered acquired NEC which helped Lenovo become largest PC maker in Japan.
Q2. Why did Lenovo choose for the M&A route (by taking over IBM) of going …show more content…
In 2004 , IBM approached the company asking them to acquire there PC business, there were various risks involved in this , but the company chose this route to go global citing a few well thought out reasons
They already were the market leaders in china with almost no room to expand, so going global with a brand name of IBM which is already well established was the logical step to be taken.
They did not have the risk to loose customers as they were taking over the entire company as it is including the CEO, sales team and other work environment, which gave Lenovo the advantage of providing the customers with same level of quality and service after the acquisition.
The acquisition made Lenovo the 3rd largest PC manufacturer in the world.
Moreover, Lenovo could gain control over IBMs world class technology, managerial prowess and amazing R&D team in addition to their own experience and expertise which helped them become the global leaders they are now from being a local Chinese