The Leading Pc Manufacturer in China

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Abstract:
The case describes in detail the various steps taken by Lenovo, the leading PC manufacturer in China, in its effort to go global.

The steps include changing its corporate name from Legend to Lenovo, sponsoring the 2008 Olympic Games and most importantly, acquiring IBM's PC unit.

The case examines the need for Lenovo to globalize and critically analyzes the efficacy of the above steps in the company's globalization plans. It also highlights the challenges faced by Lenovo in its path towards globalization.

Issues:

» How innovation, differentiation and customization can be used as strategic and competitive advantages by a company, to maintain its leadership in the domestic market, and emerge as a global player

» The need for globalization and the factors that must be taken into account when a company wants to go global

» The measures by which a company can create a global brand

» The challenges facing Lenovo in its efforts to go global
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 PC maker worldwide with an annual revenue exceeding 10 billion US dollars."2

Lenovo, formerly known as Legend, is Asia's leading and world's ninth largest PC manufacturer (Refer Exhibit I for top ten PC companies in the world). By the end of 2003, Lenovo had captured a 27 percent market share of the PC market in China. In the fiscal 2003, Lenovo manufactured around 4.5 million PCs including laptops and desktops. Lenovo has also diversified into other business areas including handheld devices...
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