Lenovo Acquisition Analysis
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 five years so they wanted to leverage that asset. The media perception of Lenovo’s association with the Chinese government was also concerning to Lenovo’s executives since firms with this type association tend to get low marks for trustworthiness. In response they did face to face surveys to determine customer concerns. After choosing to focus on innovation and quality the company eventually settled on a strategy with two elements: build up the Lenovo brand as master brand and continue to strengthen the ThinkPad brand which rated high among corporate buyers. Pricing decisions:
Lenovo’s pricing decisions was a case of how to position itself in the minds of consumers. They had already become very efficient with the cost of manufacturing since most of the components were already being made inside of China. But they had to choose what its brand essence would be and over how many categories its brand would be stretched. As they saw it there were two groups with which to compete. One group included the discounted pricing model like Dell, HP, Acer and such. Another group included Apple and IBM which distinguished their products on innovation and quality. So to remain competitive, Lenovo planned to launch their new PC Series 3000. This was an attempt to keep the master brand and the ThinkPad as luxury products at a premium price and to create another product that was priced lower and could compete in the market on another level. They chose not...
Please join StudyMode to read the full document