Essay - IBM and Lenovo Analysis the Goals of This Paper are...

IBM and Lenovo Analysis

The goals of this paper are to describe IBM's and Lenovo as two entities prior to the merger ***** trace the factors that led to their merging. In analyzing their merger, the ***** or components that were part of ***** planned effort and those unanticipated are also discussed. ***** addition, ***** analysis sheds light on problems and opportunities ***** the merged company faces. The entire paper's analysis is presented from the perspective of the market mix on one side and ***** directions of the markets Lenovo is entering globally on the other. With an acquisiti***** of this magnitude there ***** sure to be challenges ***** risks ***** integrating both comp*****ies *****gether.

To organize all components of this analysis, the paper concludes with a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis.

IBM and ***** Pre-Acquisition

In comparing the history ***** both companies, there are many parallels that emerge specifically from IBM's PC Division on the one h*****, and ***** rapidly expanding manufacturing and selling expertise of Lenovo t*****roughout China, India, ***** Russia according to Hamm, Roberts, and Lee (2005). ***** first and most obvious is the variation in business models ***** the PC Division had relative to the ***** other divisions of IBM, namely a focus on services revenues and margins being typically higher than product revenue (IBM Financial *****, 2001). Sec*****d, the pricing strategies inside IBM have favored a premium price for high performance in everything from minicomputers ***** mainframes and all the products in between. In addition, ***** h***** very successfully taught its customers to pay ***** prices for services ***** the maintenance of hardware and software *****. The disconnect in operat*****g philosophy between the PC Division, who was governed by Moore's Law (Intel, 2006) and ***** ac*****ing 8% to 15% reductions in pricing of PCs per year or more and ***** lack ***** services ***** within the core business model of selling PCs made the division continu*****y under review in terms of its pr*****itability. Third, ***** is the issue of manufactur*****g ***** ***** IBM that centers on building highly tailored, high-end mainframes, minicomputers, and increasing networking components to ***** specific requirements of cus*****mers, which is sometimes cal***** a built-to-order strategy, generates higher ***** and the potential ***** ***** add-on services. This manufacturing ex*****tise is based on the c*****cept of ***** highly specific and customized units in much smaller quantity and at much higher prices than the production ***** needed for excell*****g at the PC business. This third factor is a major reason for the significant losses that IBM continued to experience with its PC *****. *****re ***** a m*****jor disconnect between the production efficiencies and needs of ***** production relative to low-end, mid-range, and high-end servers to *****. Fourth, despite ***** having one of the world's largest R&D budgets, the ability to stay in front of Dell's competitive product strategies and differentiation was daunt*****g. The fourth issue is really ***** competitive dynamics ***** the market and ***** inability to pursue innovation ***** cost reduction