Lenovo’s Acquisition of Ibm’s Pc Division –Presentation of the Case Study

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Lenovo’s acquisition of IBM’s PC division –presentation of the case study The Chinese company Lenovo has on its agenda the acquisition of the western company IBM. Even though Lenovo is the first Chinese brand that outsell any foreign one, it has a much shorter history compared to the giant IBM. While Lenovo was born in 1990, IBM lasts since 1895 when it started as a Tabulating Machine Company and focused on the production of punched card data processing equipment. Later on, it merged with two other companies creating International Business Machine and started to dedicate completely into the business of computers. Lenovo’s share in the market is of only 2,2% being on the 9th place. Through the acquisition of the IBM which is situated on the 3th place in the hierarchy, Lenovo would gain more market share and be between the top 3 companies from the market. Lenovo’s plan was to expand global considering the fact that it was the market leader for chinese computers. It has an attempt to achieve its aim through diversifying its portfolio by including non-PC areas. However as the plan did not work, Lenovo tried the second time to get global this time within the PC industry. This thing could be possible either through building foreign subsidiaries or through acquiring an existing global player. Even though it exist many advantages for Lenovo regarding the acquistion of IBM, there are a few things that should be taken into consideration. One of these include the multiple examples of chinese companies which tried to acquire the western ones, but the cultural differences and lack of proper experience, led the acquisition into a failure. Lenovo’s directors considered that the acquisition of the global brand IBM would make Lenovo an international company and would bring only positive effects for the chinese company. However, the potential rivals think differently.

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