MAR0236 Global Market | Manufacturers of Personal Computers

In the report, the company is examined based on the integration responsiveness framework. It further discusses about the concept of local responsiveness and global integration and their advantages.

Answer:

Introduction:

The report aims at providing a reflection as well as insight into the competitive global context with respect to Lenovo, one of the world’s renowned producers of personal computers. The report puts forward answers to the four questions concerning the company. The questions primarily concerns with the strategies adopted by Lenovo in gaining flexibility and efficiency, its organizational culture and the nature of the international strategy. The questions also concerns examining Lenovo in terms of integration responsiveness framework. Each of the questions is approached by going through the details of the case study and undertaking further relevant research. The answers of each of the question will be covered by providing an in detail analysis and description of the requirement asked by each question

Discussion:

To begin with, strategy represents a plan of action designed for the achievement of specific goal (Grant 2016). It is concerned about gaining or at least attempting to gain a position of the advantage over the competitors or the advertisers. In addition, it also represents the set of the strategic options that allows making a choice of the course of action for gaining advantage.

To succeed in the global marketplace, the company implemented merger and acquisition (M&A) for acquiring the required knowledge along with the other assets from the partner firms and thereby expand into the worldwide market. In the year 2005, the company acquired personal computer business of IBM (lenovo.com 2018). Besides, in the year 2011, Lenovo went into merger with NEC, one of the largest vendors of personal computer in Japan for having a better accessibility of the personal computer market of Japan (Alabaster 2012). This strategy helped in increasing the scale of economies of Lenovo in both marketing and manufacturing. Further, the company also acquired Motorola mobility in the year 2014 that provided the base for stronger footing into global smart phone business (Kelion 2014).

 Lenovo ensures efficiency and flexibility by employing strategies like global innovation, global branding as well as products, global human resources and the creation of the corporate culture that remains conducive to the global success for maximizing the flexibility and efficiency. Nevertheless, for fostering organizational learning, Lenovo continuously optimizes the value chain activities of the firm. 

The organizational culture of Lenovo aims at fostering a global spirit with the executive team meetings rotating between the Hong Kong, Beijing, Singapore, Paris and North Carolina. It is also known as the ‘We are Lenovo’ culture that comprises of the values and business practice shared by the company (lenovo.com 2018). The culture represented the embodiment of the statement of what the people of Lenovo can say, own what we do and constantly wows the customers. The characteristics of the culture lie in the company’s involvement of the customers in everything it does. It also considers the involvement of the global team players guided by the trust and integrity. The culture of Lenovo has further characterization through commitment of the entrepreneurs in driving the change and the innovators who persistently pursues new data. The culture of Lenovo has thus enabled the company in constantly raising its bar in the delivery of the break through innovations, stronger financial performance and award winning designs.

The culture helps Lenovo in achieving its international goals by helping the young managers in socializing with the organizational culture of Lenovo irrespective of the nationality provided the employees demonstrates vision and capability.  Socialization helps in the creation of broader and tacitly understood rules for the accurate actions by the managers at every level of the global operations that helps the managers in becoming well acquainted with the culture and the goals of the firms (Chao 2014). This enables them in developing a strong connection with the firm. This helps in guiding decisions on the facilities and the activities for the global exchange for knowledge. Besides, connectedness not only builds trust and cooperation but also encourages the interaction and the communication. It also facilitates the assimilation and the integration of new capabilities and knowledge.  However, the management of Lenovo values the diversity of the global cultures and learning that accrues from the global business environment. The employees needs to function with not only cosmopolitan value but also with global mindset

The nature of the international strategy of Lenovo has been to protect and attack (Mourdoukoutas 2015). The strategy has primarily been multi-domestic since it helped the company in protecting the core business primarily in the Chinese market but at the same time aggressively ensure the growth of the market share in the advanced and the emerging markets. This strategy enables in rapidly growing the new product categories of the company that included the smart phones and tablets. The push towards the emerging market is benefitted from the company’s in depth knowledge about the business doings of China. Close to twenty percent of revenue generates from the emerging markets located outside China. Besides, the acquisition strategy of Lenovo has helped the company in acquiring companies like IBM, NEC of Japan and the Motorola mobility. The acquisition of the personal business of IBM has proved advantageous to Lenovo as it allowed the company in tapping unique technical expertise and leverages the high-end innovative capabilities of Beijing, Raleigh and Japan. This adds to the capabilities of Lenovo considered as one of the leading developers of personal computers. The firm owns distinctive talent capabilities through each of its facility and owned over 6500 international patents.

The integration responsiveness framework represents the insight of the managers in the large multinational business for simultaneously having to cope with diversity of the business and the national market thereby resulting in stronger complexity in the decision-making (Meyer and Estrin 2014). Lenovo worked harder in integrating the Chinese methods of the business having an international workforce of close to 27,000 employees (statista.com 2018). The company blended the distinctiveness with the organizational and national culture of IBM thereby requiring the hiring of the managers having a global mindset and a stronger international background. Besides, the company also recruited global well-informed executives from high-end firms for contributing successfully to the integration responsive framework. Besides, Lenovo also put forward a global training program that accelerated the opportunities of development of the employees.

For local responsiveness, Lenovo faces the pressure of responding to the local conditions (Zheng 2013). This has made the firm establish a complex distribution network that extended to even the smaller towns and the cities. Besides, the company also adjusted the pricing for adapting them to the buying power of the consumers belonging to the low-income groups. The marketing also fits to the local traditions. In the rural China, Lenovo markets wedding computers primarily in red color since the color is lucky and the family pools in money for buying the bride and the groom their very first personal computer as the wedding gift.

However, for global integration it can be said that the industry for personal computers has reached a matured stage especially in advanced economies (Shenkar, Luo and Chi 2014). Considering such a scenario, computers have become commodities with thinner profit margins. The firms also face competition against one another in catering to the customer needs on a global scale. Thus, personal computer firms like Lenovo remains under immense pressure for ensuring the success and the survival of the company.

The local responsiveness proves advantageous to Lenovo as it lowers the cost efficiencies and the economies of the scale while concentrating on the local manufacturing sites of China. This also helps in the diversification of the sales, improved research and development and better skills of collaborating. The global integration enabled Lenovo in creating brand awareness across global scale. For instance, the global integration of with IBM encouraged the company in undertaking a global campaign for engaging the customers across the world. It also enabled the firm in leveraging the global social media for targeting marketing campaigns to the youth between the age group of 18 to 25 years. Global integration aids the company in accessing various markets and enhances its scale of economies in the advanced and emerging markets (Berry 2014).

Conclusion:

On a concluding note, the report covers the strategy of Lenovo, its organizational culture, nature of the international strategy and the integration responsive framework. The report commences with an overview of Lenovo’s strategy. Lenovo follows a merger and acquisition strategy that helps it in establishing as a business on a global scale. The organizational culture of the firm aims at fostering the global spirit that leads to the excellent designs and innovations. As far as the nature of international strategy is concerned, Lenovo believes in a ‘protect to attack’ policy that not only protected the core business across the Chinese market but helps in aggressively growing the market share in the advanced economies. Lenovo also viewed in terms of the integration responsiveness framework where in order to cope with the diversity of the business Lenovo faced stronger complexity in terms of decision making. The company also remains in an advantageous position through local responsiveness and global integration. The research has more or less covered every aspect of Lenovo without missing any part.

References:

Alabaster, J. 2012. NEC sells shares in Lenovo; Japan PC joint venture unaffected.

Berry, H., 2014. Global integration and innovation: Multicountry knowledge generation within MNC s. Strategic Management Journal, 35(6), pp.869-890.

Chao, G.T., 2014. Unstructured training and development: The role of organizational socialization. In Improving training effectiveness in work organizations (pp. 141-164). Psychology Press.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Kelion, L. 2014. Lenovo completes Motorola takeover after Google sale. [online] Available at: https://www.bbc.com/news/technology-29833131 [Accessed 25 Oct. 2018].

lenovo.com 2018. [online] Available at: https://www.lenovo.com/us/en/lenovo/our-culture/ [Accessed 25 Oct. 2018].

lenovo.com/us/ 2018. [online] Available at: https://www.lenovo.com/us/en/lenovo/company-history/ [Accessed 25 Oct. 2018].

Meyer, K.E. and Estrin, S., 2014. Local context and global strategy: extending the integration responsiveness framework to subsidiary strategy. Global Strategy Journal, 4(1), pp.1-19.

Mourdoukoutas, P. 2015. The Global Rise Of Lenovo. [online] Available at: https://www.forbes.com/sites/panosmourdoukoutas/2015/03/11/the-global-rise-of-lenovo/#14306306534d [Accessed 25 Oct. 2018].

Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.

statista.com 2018. [online] Available at: https://www.statista.com/statistics/233031/number-of-employees-at-lenovo/ [Accessed 25 Oct. 2018].

Zheng, C., 2013. Critiques and extension of strategic international human resource management framework for dragon multinationals. Asia Pacific business review, 19(1), pp.1-15.