International strategic alliance between lenovo and ibm
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Transcript of International strategic alliance between lenovo and ibm
INTERNATIONAL STRATEGIC ALLIANCE
LENOVO AND IBM
An strategic alliance is an agreement for cooperation among two or more independent firms to work together toward common objectives.
It is a collaboration with aim of synergy where each partner hopes for greater benefit than as individual efforts.
When firms of different company alliance together it is called international strategic alliance.
STRATEGIC ALLIANCE
Enables to gain competitive advantage in new economy
Grow and expand more quickly and efficiently
Learning from partners and developing competencies that may be more widely exploited elsewhere
To get benefits from established channels of distribution , marketing, brand reputation etc
REASON BEHIND ALLIANCES
ALLIANCE BETWEEN LENOVO AND IBM
Lenovo Group Limited is a Chinese multinational technology firm with headquarters in Beijing, China
It sells personal computers, tablet computers, Smartphones, workstations, servers, electronic storage devices, IT management software and smart televisions
Lenovo has operations in more than 60 countries and sells its products in around 160 countries and has now become the 3rd pc provider in the world.
LENOVO
IBM is an American multinational technology and consulting corporation
headquarter in New York, United States manufactures and markets
computer hardware and software, and offers infrastructure, hosting and consulting services in areas ranging from mainframe computers to nanotechnology
IBM
ALLIANCE: December 8th, 2004 VISSION: to develop and deliver industry specific,
integrated technology solutions for enterprises, small and mid-market businesses and individuals
AGREEMENT: The agreement aligns Lenovo's expertise in building the best engineered personal computers with IBM's extensive IT services and technology capabilities
ALLIANCE
Meet the business needs of clients in industries such as healthcare, financial services, education, retail and government
IBM market and sell Lenovo PCs through IBM Global Services and its strategic outsourcing deals.
Through this agreement, customers will now have the opportunity to include the purchase of Lenovo’s best engineered PCs within the context of their overall technology solutions.
CNTD….
Lenovo had little business outside the country
The increasing fierce competition from aggressive foreign rivals such as Dell and HP
Both the companies was financial problems
Shares of the Lenovo dropped nearly 60 per cent in the year 2004
NEED TO FORM STRATEGIC ALLIANCE
Lenovo intended to expand its business globally
Lenovo needs a well-developed worldwide distribution network
IBM’s presence in the world’s fastest growing IT market
China is a tough nut to crack especially for outsiders
MOTIVE
FINANCIAL ASPECTS-the pressure from the market leader Hewlett-Packard and Dell and low confidence of the shareholders
BRANDING-‘Lenovo’ name is almost unknown outside of China, it is hard for marketers to build an international brand from scratch
CULTURAL CLASHES- The differences can be caused from the different corporate cultures or national cultures.
PROBLEMS