IBM - étude de cas - (en anglais)

IBM CASE

Presentation of the case :

Currently Lenovo’s companie is a leader of the market on chinese computer. Due to the low-cost production the companie undle completly the chinese market. However new international competitors are arriving on the market and the chinesse companie need to go abroad with a nice globalization to survive and increase it brand awareness.

The chinesse company thinks avec the right issue with a potential acquisitions of IBM’s PC division in order to

-Devellope the portofolio

-Making economy of scale

Identification of the problem, causes and negative effect :

• Identification of the problem : How a company already leader inside it domestic market could reach the world wide market through an horizontal integration strategy ?

Under problems : To be able to develop the portofolio, the managering process and the brand awareness.

• Causes : -Domestic market already handle, need to earn market share abroad, set up an efficient economy of scale.

• Negatives effects : In case of failure or fixed situation the company could lost market share year after year its own market and decrease thus its sales by the same way.

Identified of alternative solutions for each identified problem :

To solve the problem you have two mains issues :

• The first one is horizontal integration :

-Benefits : Economy of scale, economy of scope, reduce the competition, more power of negociation.

-Weakness : Problem of anti-trust, problème of adaptation of the new market, some problems of management in case of two differents culture

• The second one is vertical integretion :

-Benefits : Diminution of costs, guarantee of supply, control of the brand awareness

-Weakness : expensive investments, loss of opportunity

Selection of the optimal solution :

• The optimal solution seems to be the first one because it may reduce the competition abroad. Moreover you can acquire the knowledge and the skill from the firm that you have absorbed. Yan can develop the brand awarness through the corporate image from the firm.

You will be sure to be adapt to the current market thanks to the experience of the firm that you have taken.

Finnaly this kind of integration could be and advantage because you can diversificate your range and upgrade your original output.

Implementation of the optimal solution :

• If you want to realize this kind of issue you need to acquire a kind of firm witch have a strong brand awarness in a right market with all skills and knowledges that you need. Thereby you must be in a right condition to develop your turnover abroad and increase your portofolio of customers.

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