The Study of Fdi Strategy for Lenovo Group

Topics: Personal computer, International trade, International economics Pages: 10 (2829 words) Published: June 18, 2013
Business School

The study of FDI strategy for Lenovo Group

Module Title: International finance and investment
Module NO: 56357
Level: 7
Module Leader: Dr. Peijie Wang
Student ID: 200900219
Text Word count: 2600
Submission Date: 05/04/2011

Introduction

The Lenovo Group
Lenovo Group is committed for superior personal computer creating, the company based on the business model which is oriented for innovation, high efficiency and the customer satisfaction, besides the company is also actively entering the new market. The Group is formed by Lenovo Group and the former business division of IBM Personal Computer that to undertake the creation, manufacturing as well as to sale reliable, high quality, safe-to-use technology products and it also provides professional services around the world. These are some details which are related to the development of Lenovo Group: ● Lenovo operates its business more than 60 countries and provides personal computers for more than 160 countries in the world. ● Lenovo Group has a unique business structure which is divided into the emerging market and mature market for coping with its market characteristics in response to rapid and effective implementation for appropriate strategies. ● Lenovo is the fourth largest PC manufacturers in the world, and it is also the top five PC supplier in which grows the fastest. Since 1997, Lenovo has been kept the first place in Chinese domestic markets, and now the company is accounting for over thirty percent into the share of personal computer market. ● In January of 2011, Lenovo Group announced that it established a joint venture with NEC Corporation so that they jointly established Japan's largest personal computer group. Lenovo will be leading the way in the world's top three personal computer market. ● Topping world-class R & D team stationed in the Yamato Research Institute in Japan, Chinese Beijing, Shanghai, Shenzhen and the Raleigh in North Carolina of United States.

The FDI strategy of Lenovo Group

For enterprises, the real internationalization is to make its products, technologies and organizational system to be set up in the global platform and finally form a global brand which can be approved by global customers. But for the unevenly developed countries especially the economically backward countries in which the enterprises may get a considerable challenge. However, the international factor of production need to be recombined and industrial transfer accelerates under the new situation which means try to apply to global strategic vision, and make full use of international and domestic markets and resources that have been an inevitable choice for countries and enterprises. As a multinational corporation that Lenovo Group has been considering how to enter the international market and exploit the overseas resources, those factors must be considered in the following:

Location choosing strategy- Generally, there are top twenty elements (Wang.p, 2009) should be taken into consideration which are showed by the figure 1. Figure 1. Factors influencing FDI location choice

Top 10 factors

The next 10 factors
Source: MIGA/World Bank
The figure which is showed in below means that the top 10 factors are prior considered by most multinational companies, and the next 10 factors should also be paid attention by some companies particularly the company, which establishes an overseas branch on its first time; the weighting of each factor in the chart which depends on the requirement of different multinational companies that might be changed. However, Lenovo group also took into consideration all factors where there have been listed in above, but the most important elements which could be valued by the top manager of Lenovo are stable social and political environment, infrastructure conditions, geographic conditions, policy and institutional environment, level of modern service and human resource conditions; those elements are...
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