SWAT analysis

1. Lenovo
Lenovo is a company that has big dreams and in the past several of they have been taking
strides to come closer to that dream, becoming a global market leader in the production of PC’s.
The company first started out as a subsidiary of Legend Holdings Ltd. The company was based
in China and made PC’s for the Chinese people to bring the advantage of technology to them. In
2001 the company changed their name from Legends to Lenovo to help establish a global
presence.When looking at the Lenovo company and their expansion you also have to look at
IBM, who was acquired by Lenovo in 2005.
Before the acquisition of IBM Lenovo was not well known in the global market and was
surviving based off sale there were only being generated in China. To survive as a company
Lenovo had to move away from being just a domestic company and move globally and this also
at the time was what China wanted to do in the national market, showing they could compete
outside of the borders with more than just the help of the Chinese people.
The acquisition did not get into motion until year and a half after IBM came to Lenovo to
sell IBM’s PC division which at the time showed a $400mil loss the year before. This was
Lenovo chance to move into the global market as they were looking to do and negotiations
started. On May 1, 2005 the acquisition was complete. The Acquisition gave Lenovo the PC
division and the experience of management that they need for their expansion. The Deal put
Lenovo the third-largest PC maker in the world, but the name Lenovo was still unknown to the
world.
They had a handful of obstacles that they would have to overcome to become a world
leader in PC’s. The target customer was the first problem, before now they were targeting the
low-end market, small to medium sized business and home users only in China. After the

2. acquisition they had changed to also targeting the high-end market and selling computers to big
corporations and education sectors, and providing premium feature such as e-business.
The main obstacle that the company would face is the culture difference that the two
companies had before the acquisition. Being for the US IBM management had a different style
of running a business compared to the strict “militaristic” type setting. This was something that
was going to have to change and each culture of people in the company would have to
compromise to work successfully with each other.
To succeed in the new global market Lenovo was going to have to change its position as
just a China culture based company. It started by spreading its executives to different parts of
the world. The top management of the company consisted of 10 different nationalities along
with a multinational board of directors. Instead of imposing the Chinese management style on
IBM the Chinese adapted into the IBM style. The company moved its operations from Beijing to
the US. One place that did not go as smoothly is the communication between people the Chinese
did not talk openly among each other, the company had to send their employees to “executive
expression” courses.
In august of 2006 the company reported its first quarterly profits since the acquisition,
analysis claim that this was due to change in CEO’s by bringing Dell’s previous CEO in William
Amelio. Amelio brought some change to the company. He launched a $100million to overhaul
the IBM unit. This included laying off 1,000 employees, 5% of the workforce, and consolidating
the offices due to the downsizing. This plan posted a $60 million profit in the first quarter of
2007. In February of 2007, Lenovo relocated 1.400 positions, 5% of its employees worldwide to
become more profitable and cost efficient. The reconstruction was to help grow the company
faster.

3. Lenovo had to change its sale strategy from small businesses and consumers in China to
include large institutions. They went about it with two business models to cater to the individual
consumer all the way to the large business. To improve US sales the company had to explore
new ways to appeal to the US consumer by changing their look. They moved their products into
stores like Circuit City and Best Buys.
The next thing that the company had to work on was marketing. Because they were a
new company they did not have brand recognition throughout the world and they made strides to
change that by sponsoring celebrities, athletes, teams, and events to help boost their name.
The whole acquisition of IBM for Lenovo was an experiment and opportunity to see if a
company for China could become a company that could service consumers from around the
world instead of just the people in their own borders. The company had made great strides to
change the way they did business and it started to pay off by 2007 when they showed a 625%
increase in profits from the year before, and in 2008 showed profits stemming from the U.S. for
5 consecutive quarters.
In China Lenovo was still the leading company in PC market, but was losing ground as
companies like Dell and Acer were gaining ground. It had a new market now and it did not have
to base itself just off the China market anymore it had to move forward and look at the global
market that it was competing on. Lenovo had the leading PC sales in China due to the help of
the Chinese government which they still had but could do little help in the new global
environment that they now were in.
I think this was the right choice for the company they expanded their company globally.
It is something they wanted to do and was something they wanted to prove to the world they
were able to move into the global market. The company by now should have all the kinks out.

4. Not even three years after the acquisition they were pulling in profits. The company like any
other has to adapt, and they already had to do a major adaption with the cultures coming
together. From here on out there should only be small things the company should have to adapt
to now, and I see them doing that with ease.