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Essay / Research Paper Abstract
A 3 page paper answering 3 questions about IBM's sale of all but 13.4 percent of its PC business to China-based Lenovo in 2005. The merged entity will be headquartered in New York to enhance its image as a global company and will target both consumers and business. Bibliography lists 2 sources.
Page Count:
3 pages (~225 words per page)
File: CC6_KSintlBiIBMLeno.rtf
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Unformatted sample text from the term paper:
and trace the factors that led to their merging. Distinguish those components that were part of a planned effort, and those that were unanticipated.
IBM was slow to enter the PC market, and it has been equally slow to exit it. IBM sells its products throughout the world and targets business, which
has not been eager to abandon its Dell or HP PCs in favor of IBMs. When IBM began courting Lenovo (Legend at the time) in 2002, it could only
report that it had "lost nearly $400 million the previous year" (Roberts and Lee, 2005; p. 74). The sharp decline in sales was expected following the turn of the
new century as many businesses rushed to replace aging PCs with Y2K-ready ones (Bulkeley and Hamilton, 1999), and predictions held true. IBM was unable to fully recover, however.
Its unit sales increased in 1Q2005 by only 2 percent, compared to Dells 13 percent (Roberts and Lee, 2005). Lenovo is a Chinese
company focusing on the consumer market, primarily in China where it dominates the market with a 26 percent share in 2004 (Roberts and Lee, 2005). At labor costs of
only $3 per desktop PC, Lenovo has latitude in pricing that IBM could never achieve, even in China. Lenovo wanted the merged entity
to be headquartered in China, but IBM prevailed and the company will be located in New York. The merger also was to be a straight purchase of IBMs PC
division, but IBM retained a 13.4 percent share in the merged entity and contributed IBM executives to manage it. (2) The article sheds some light on problems and opportunities that
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