done anything better? Key Branding issue and Lenovo’s efforts to address the same: After having established itself as an innovative PC brand in China, Lenovo wanted to position itself as a global corporate brand while leveraging the IBMs Brand equity. The key branding issue for Lenovo was creating a positive global image in consumer’s mind as being a Chinese computer brand it was considered an inexpensive brand offering inferior quality products. Acquisition of ThinkPad brand was one of the first steps
Lenovo: Building a Global Brand 1. Why did IBM want to sell its PC business? Why did IBM sell to Lenovo? The reasons that IBM wanted to sell its PC business to Lenovo are: • • • To shed an unprofitable operation as the company saw the limitation and more competitors in the market. Selling its PC business to Lenovo would help them increase market share, especially in Asia. IBM shifted their business from producing PCs to concentrating on consulting service. Therefore, merging with another
low-cost innovation. Innovation summary is provided: Table 5: Summary of Lenovo’s product features innovation (Xie & White, 2004, p. 412) b) Rarity Rarity can be in the form of a tangible or intangible resource. It is likely to be short-lived if attributes are not maintained (Johnson et al, 2008, p. 102). Lenovo achieved rarity through its brand name and intellectual property from IBM-PC division (Callahan, 2005). Such made Lenovo-IBM co-branding a powerful combination. c) Inimitable The inimitable strategic
Lenovo Acquisition Analysis Product/Brand decisions: Some of the issues Lenovo had to deal with in the acquisition of IBM was how to capitalize on the marriage of brands and how to win corporate respect with the Lenovo brand. The acquisition allowed Lenovo to move quickly into the international marketplace. Given that IBM had one of the most trusted brands around the world, this allowed Lenovo to build on past IBM’s reputation. But Lenovo only had the right to use the IBM logo for
authentic value proposition for the newly combined resources of their firm. With this, we would recommend a Synergy branding strategy in the short term and a Master Brand approach in the long term. We feel this co-branding approach will further align Lenovo’s brand to their mission of “putting more innovation in the hands of more people so they can do more amazing things” by creating broader consumer appeal and greater brand equity. Using a hybrid of the master company in conjunction with sub-brands
and goals to standards need to apply in managing and coordinating information technology resources. Lenovo has developed several R&D centers to raise barriers for new entrants and restrained rivalry by patenting new products or processes. The acquisition of IBM lowered the learning and development time with ready expertise and market share to be exploited. With strong commitment from senior management to innovation critical, Lenovo needs to cultivate a creative climate that fosters innovation. Support
The SWOT Analysis of Lenovo-IBM Acquisition Case study: The acquisition case of American IBM Personal Computer by the Chinese computer company Lenovo. This article uses SWOT matrix to analysis the post-merger situation of Lenovo’s PC business and try to demonstrate a possible roadmap for future business. On December 8th of 2004, Lenovo announced its merging of IBM’s world personal computer (PC) business which included the ThinkPad line of PCs. This deal costing Lenovo $1.25 billion, including $650
Investment Alternatives and Analysis for Fair Value Case Analysis of Lenovo Merging and Acquiring IBM PC Department Contents Introduction ………………………………………………… 1~4 Body 1. The critical successful factors that are the focus of the successful M&A activities …………………………… 4~6 2. The summary of lessons learned which made the factors successful……………………………………………… 6~8 3. What is the company should do next to improve its post-M&A initiatives…........
Case study Lenovo’s Acquisition of IBM’s PC Division: A Short-cut to be a World Player or a Lemon that Leads Nowhere? 1. General presentation 2. Identification of problem, causes and negative effects Strategic problem definition: • Acquisition of IBM – PC division as part of the expansion strategy. Causes: • Lenovo was number 9 on PC market and had 2.2% market share worldwide and therefore it wanted to increase its market share position.
internationalization is through Lenovo’s acquisition of IBM’s PC division. Before getting to the middle of the problem, let us learn about both Lenovo’s and IBM’s background. Figure 2: Lenovo’s Acquisition of IBM’s PC Division: A Short-cut to be a World Player or a Lemon that Leads Nowhere? Background Lenovo was the first Chinese brand to outsell any foreign brand in China, in 1996. The company based in Beijing started its life as a reseller/distributor for AST computers (HP and IBM later on); beginning