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The case analysis indicates that Lenovo has acquired IBM in order to go global and establish itself as a global brand. With the intense level of competition, Lenovo felt the need of going global, and as a part of its strategy, it has performed the acquisition of IBM. here are different important facts related to such acquisition deal by Lenovo has been presented in the given case, and it has also been studied that there has been the presentation of different strategies as applied by Lenovo in becoming a reputed global brand.
The case analysis indicated about the history of Lenovo whereby it has been assessed that Lenovo initially was known as Legend and it has established itself as a major seller of PC products across Chinese markets. Lenovo has organized itself as the most prominent brand in China with its core emphasis on innovation, quality and efficiency in its products and services offerings. The ability to innovate and offer something new has been the core feature that brought higher level of success and growth to Lenovo prior to acquisition. This has been identified from the case analysis whereby it has been evaluated that Lenovo has been the first company that has introduced Chinese-character card and it has contributed significantly towards the growth of the organization. The card as introduced by the company is aimed at translating the English language into Chinese and this has been a significant contributor to the growth and recognition of Lenovo in the Chinese markets.
Before the acquisition of IBM, Lenovo has been operating a very small level, as the company has performed its operations only in the Chinese markets. However, the acquisition of IBM has necessitated Lenovo to make significant changes across its business models so that it can target its customers worldwide. It has been evaluated from the analysis that the main challenge immediately after the acquisition of IBM by Lenovo is that the company has to perform the marketing and management of its business at the global level. It needs to devise strategies that are aimed at targeting its customers in the world market. The second major challenge that has been evident in respect to Lenovo after the acquisition is that the company has to make adequate level of differences between the IBM products and Lenovo products. This is mainly because it needs to maintain two different brands separately and have to position their uniqueness in order to promote both of them in the global market.
These are the major challenges that have been directly evident in respect to the performance of Lenovo after the acquisition of IBM has been taken place. The managerial challenges in the form of cultural differences across the two businesses and the need for maintaining separate business profile for both Lenovo and IBM has been the utmost difficult challenge to the Lenovo’s management after the acquisition.
An analysis of the advantages as well as disadvantages of these strategies as considered are indicated as follows: Master Brand Strategy- This branding strategy implies that it requires businesses to focus specifically only their master brand while performing its promotion. The master branding strategy has the advantage in terms of better promotion of the master brand of the company. Contrary to this, the disadvantage associated with this master brand strategy is that it leaves with lesser overall resources to the firm in paying attention towards enhancing its other sub-brands that are operational.
House of Brand Strategy: This branding strategy which involves the usage of large number of brands by the company in promoting its performance. It requires contribution of resources towards each sub-brand by the firm. The advantage of this branding strategy is that it allows for sufficient level of contribution or attention of the management towards different sub-brands of the company, and none of them get missed. Apart from this, the disadvantage is that it detracts the attention of the management from focusing only their major brands and ultimately, their performance might suffer.
The synergy approach to branding indicates a branding strategy whereby a master brand is being promoted in conjunction with a “hero” i.e. sub-brand. As in the given case of Lenovo, the master brand is the Lenovo itself and the sub-brand is IBM. This strategy has the advantage in the sense that the positive image of the sub-brand assists efficiently in promoting master brand within its target customers.
Lexus/Toyota Strategy: This has been the fourth major strategy that has been indicated in the given case. This strategy indicates that different brands of the company would represent separate luxury and mass market offerings. This implies that different product would create their own brand image and they would be marketed separately. In this relation, the main advantage of this particular strategy is that each separate brand of the company creates its own image and the resulting impact is that they are self-dependent. However, the disadvantage is that in this branding strategy, the management require significant level of efforts in building up its different brands and leading them to higher level of success.
It has been identified that a simple strategy of one two punch is being considered by Lenovo whereby the company focused on building up its Lenovo brand and continue to strengthen its ThinkPad product brand. This brand strategy as considered by Lenovo has been extremely effective from the point of view of catering to the needs and expectations of the brand. This is mainly because IBM has its own distinctive image and at the same time, Lenovo has also built up its own unique identity in the Chinese market and is building up its image in the global market. This simple strategy of building both these brands individually has therefore been highly efficient to the company.
On the basis of analysis of the case study, it is assessed that Lenovo has originally been a Chinese brand as it has started its operations from China. However, the company later realized that it needs to go global, and in pursuing such global strategy, there are certain problems that are evident in respect to Lenovo. These problems are mainly because of the fact that Lenovo is mainly a Chinese brand and it is often associated with features such as lower on quality. Such problems of associating the company with China by its customers can be overcome through focusing especially on aspects such as quality. Even by way of adapting a cost efficient strategy, Lenovo could still become a major global brand, but it needs to focus on aspects such as innovation, higher quality etc. so that it can create distinguished image within its customers.
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