Lenovo’s successful acquisition of the IBM PC Division

Abstract

Purpose

The purpose of this paper is to analyze Lenovo’s successful acquisition of IBM’s PC division using Ghemawat’s (2001) CAGE framework. It was an acquisition that was so full of symbols that it is difficult to know where to begin. Lenovo’s purchase of IBM in 2005 was first seen as a sign of the rapid growth and expansion of the Chinese economy and its transformation away from the traditional manufacturing base to more high-tech areas. For doomsday merchants in the land of Uncle Sam, it foretold the end of the world domination of the US economy. Despite a considerable number of skeptics at the time, Lenovo was clearly up to the task. Such was the success of the acquisition that by 2015, Lenovo could claim to have grown into the world’s number 1 PC maker, number 3 smartphone manufacturer and number 3 in the production of tablet computers.

Design/methodology/approach

This paper is a case study.

Findings

Despite a considerable number of skeptics at the time, Lenovo was clearly up to the task. Such was the success of the acquisition that by 2015, Lenovo could claim to have grown into the world’s number 1 PC maker, number 3 smartphone manufacturer and number 3 in the production of tablet computers. Indeed, by 2014, the firm had enough confidence to add the IBM server business to its portfolio.

Originality/value

The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Citation

Thomas, M. (2016), "Lenovo’s successful acquisition of the IBM PC Division", Strategic Direction, Vol. 32 No. 9, pp. 32-35. https://doi.org/10.1108/SD-06-2016-0090