Case Lenovo Essay

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LITERATURE REVIEW ON LENOVO’S GLOBAL STRATIGIES Introduction In December 2004, the China-based Lenovo Group (Lenovo) announced that it had acquired the personal computer (PC) division of the US-based IT major IBM. Industry analysts termed this as a major milestone for Lenovo in its efforts to globalize its operations. It was also perceived as an important step towards achieving the company’s goal of becoming a Fortune 500 company by 2010. According to Liu Chuanzhi (Chuanzhi), the Chairman of the Group, “The purchase will make Lenovo Group the third largest C maker worldwide with annual revenue exceeding 10 billion US dollars.” Lenovo, formerly known as Legend, is Asia's leading and world's ninth largest PC manufacturer .By the end of 2003, Lenovo had captured a 27 percent market share of the PC market in China. Lenovo started its business as a distributor of computer products for foreign companies including IBM, AST3 and HP. In 1990, Lenovo manufactured its first PC and within a decade it grew to become the leading PC manufacturer in China. After its significant success in the Chinese market, Lenovo made plans to go global. In March 2004, Lenovo joined The Olympic Partner (TOP) to sponsor Olympics games to be held in 2008 at Beijing. According to analysts, this move would help Lenovo gain brand recognition globally. Then Lenovo acquired IBM's PC unit in December 2004. This deal improves its chances, but the business is only going to get tougher over the next few years since the worldwide growth in PC sales will slow to about 2 percent a year from 2006 to 2008, less than half the projected revenue gains of 4.7 percent a year from 2003 to 2005. The Reasons for Success By 2000, Lenovo had emerged as the market leader in the personal computers (PCs) industry in the Asia Pacific Region except Japan (APEJ), with a market share of 11.3% (Refer Exhibit III for

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