In this regard, Lin and Lin add that, "The Chinese personal computer manufacturer wanted to increase its share in Western markets. The acquisition hoisted the manufacturer from 9th place to 3rd place in terms of PCs sold. These acquisitions illustrate China's desire to spend low-cost money to acquire existing brands and distribution access, as well as securing additional outlets for other Chinese produced goods" (2008, p. 32).
Planning and control.
Although many observers suggest that Lenovo represents a true Horatio Alger success story having begun with a very modest start-up capital of just $24,000, Huang argues that the facts involved in the company's success are much more complex and relate to the company's ability to implement management functions in ways that established planning goals and its ability to control the company's resources to achieve these goals. For instance, Huang notes that, "Its subsequent rounds of financing, including an IPO in Hong Kong, were all quite substantial and they all came from Hong Kong. China's massive financial system had little to do with Lenovo's success. Nor could the informal finance have propelled Lenovo to its current prominence" (Huang 2006, p. 288). Vernon's product cycle theory conforms to the path taken by Lenovo following this name change and the steps the company took to grow its business at home and abroad. In fact, Liu (2007) suggests that it was not so much an issue as to whether the company could succeed in rescuing the struggling IBM personal computer division and turn in into a profitable enterprise, but rather a matter of just how profitable it would become. "In the final analysis," Liu advises, 'we concluded that it was not a question of whether we could turn the PCD around so that it become profitable, but rather a question of how profitable it could be" (2007, p. 575).
Moreover, based on his empirical observations with the company, Liu notes that, "We discovered that IBM PC's gross profit margin was around 24%. This was, in fact, much higher than that of Lenovo's, which was about 14%. However, the latter has a 5% net income whereas the former was not profitable. The reason was quite simple: costs and expenses were higher, some of which were unavoidable as long as the business was still part of IBM" (2007, p. 575). Consequently, the fundamentally different planning and control approach taken by Lenovo's was based on eliminating waste at every opportunity and adding value wherever possible, including the company's procurement practices. According to Liu, in some cases, these planning initiatives were merely common business sense: "Profits could also be greatly improved by merely controlling overall costs and expenses. For example, the assembly cost per unit in the U.S. was U.S.$24 compared with U.S.$4 in China" (2007, p. 575).
An interview with a Lenovo executive conducted by Sweeney is also illustrative of how the planning and control function has been used to help Lenovo grow its business. "We had to build the entire global organization," the executive noted, and adds that "we did it in geographic centers of excellence. So we've got an Americas team and an Asia-Pacific team and a European team" (quoted in Sweeney 2008, p. 36). The Lenovo executive also describes the company's ongoing plans for expanding its business model into new international markets thusly: "We started out with our system deploying into China. We went China, India, Canada. Now we have just finished a complete deployment in Asia-Pacific. Next, we'll be doing Mexico and Poland, our last two manufacturing countries. Then we've got to deploy to the rest of the world where we do business" (quoted in Sweeney 2008, p. 37).
To what extent is the organization's international operations management strategy likely to be appropriate over the next years?
It remains unclear whether Lenovo will be able to sustain its spectacular growth in the coming years following the same pattern of acquisition and internalization that has fueled its success to date. Nevertheless, the company's proven track record of developing innovations solutions and retailing will likely serve it well as it seeks to grow its market share in the Americas, Europe and Asia. Lenovo's business model of acquisition and diversification may end up causing it the same types of problems that have plagued other companies in the past (such as Dell) that have expanded beyond their core competencies and grown faster than their business models can accommodate. Despite these reservations, the company's track record is proof positive that it has been doing something right. For instance, by 2003, seven of Lenovo's Hong Kong subsidiaries were among China's 500 largest foreign operations (Huang, 2007). In May 2007, though, Lenovo also acquired a biochemical enterprise, SPG, for about $120 million, together with a commitment to provide the company with additional financial resources of about RMB5 billion (Liu 2007). According to Liu, "The acquisition by Lenovo will not interfere with the existing commitment by SPG with Unigene because...
Conclusions and Recommendations Lenovo Group Limited is a leader onto the Chinese market, but fails to become one onto the America market. The primary thing they have to consider is the adaptation to the unique requirements of the U.S. market and industry. Foremost, they need to take a more aggressive approach in order to gain and consolidate a leading position. References Leonard, a., 2008, the Story of Stuff, Story of Stuff, http://storyofstuff.ethicalbrand.org/last
Columbus (2003) states that Special Pricing Requests (SPR) processing can yield triple digit ROIs over time, as it saves significant time in responding to customers' unique pricing needs. Website Channel Utilities and Conflicts Hewlett-Packard HP has a world class Partner Relationship Management System complete with applications for lead management and escalation, channel training, special pricing request analysis and completion, and also mitigating channel conflict through the use of lead escalation strategies included in
Project Management Read case studies Project Management Institute, Inc. (2007) PMI® case study: project management improves Lenovo's strategy execution core competitiveness [Online] Project Management Institute, Inc. Available: http://www. Project management comparison: Lenovo vs. planning Canada Games 2005 Every large endeavor or organization contains challenges for the project manager. In the case of Lenovo, the Chinese computer firm was faced with increasing competition from its major competitors Dell and HP. Lenovo needed to fundamentally
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Company-specific, sales, quote and order processes, customer service, and warranty and returns KPIs all reflect financial performance, over time, for any company. By measuring these KPIs and engraining them into the company culture, Citrus can create a sustainable differentiator in exceptional performance as well. The bottom line is that Citrus must turn accountable and measurable performance into a lasting competitive advantage over the long-term. Analyzing Industry-Wide KPIs for PC Manufacturers Areas
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