Essay on Lenevo Case

Submitted By jhaas2
Words: 393
Pages: 2

Strategic Management

Lenovo Case

Lenovo began as a Chinese government backed company, which catered to the needs of companies and personal pc buyers. With the backing of the Chinese government, Lenovo quickly became the largest PC manufacturer in China and dominated the market share. Lenovo began looking at ways to expand internationally when the CFO of IBM, John Joyce approached Mary Ma, the CFO of Lenovo in May of 2002. Eighteen months later Lenovo announced its intent to purchase the PC division of IBM. Lenovo realized that it needed to establish a global brand name, cutting edge technology, and highly efficient operations in hopes of expanding into the global market. The 1.25 billion dollar acquisition was finally completed in May of 2005. This merger was beneficial to both sides because it gave Lenovo an instant worldwide footprint as well as IBM to now focus on its core business of providing service, software, and server computers to its corporate clients. While Lenovo now was on its way of achieving its goal of becoming a thriving international company, it faced some difficulties after the merger, namely integration. Suddenly culture clashes were common between the westernized English speaking IBM executives and the traditional Chinese cultures of the Lenovo executives. Traditionally IBM did not strictly monitor its employees. Instead IBM believed in the self-discipline of its workers and their empowerment. This is in stark contract to the Lenovo culture where employees were expected to obey orders and follow detailed behavior codes. A former employee even described this