Case ID 15-1065
Published 2015
Industry Code 301
Subject Competitive strategy

Abstract Lenovo the new Chinese brand which became iconic after the acquisition of the PC division (Thinkpad) of IBM. The firm set up new standards in internationalization as one of the first “eastern” company acquiring such famous brand IBM. In just 10 years, the firm successfully reached the position of number 1 in the PC market in front of the two historical global competitors Hewlett-Packard (HP) and Dell. Learning from these past experiences, Lenovo next objective is to diversify its product portfolio by setting a new challenge: enter the global smartphone industry in order to create a new synergetic environment around its products. Lenovo's experience in mobile phone industry in China was chaotic and the global market is now dominated by the 2 giants (Samsung and Apple). But this does not seem to frighten the charismatic CEO of Lenovo, Yang Yuanqing who likes challenges. Applying its ambitious motto “think big”, Yang finalized the acquisition of Motorola Mobility from Google for an amount around US$ 2.91 billion October 30, 2014 with the aspiration to become Number 1 in the global smartphone market. The CEO seemed to be determine to repeat its past success with IBM acquisition with Motorola. The firm is a great historical player of mobile phone industry which experienced some difficulties since the raise of the smartphones. Will the purchase of Motorola be enough to successfully enter the global smartphone market? Does Lenovo as the strength to support this new strategy?
Pages 24
Teaching Note Yes