Lenovo – changing structure to follow strategy Essay Example

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Lenovo – Changing Structure to Follow Strategy

  1. Considering the process of integration and Lenovo’s strategic direction, why do you think that Lenovo acquired IBM’s personal computer division?

One of the main reasons that Lenovo acquired PC division from IBM was to enter into the global market where IBM was well established. It was easier and cheaper for the company to acquire this division rather than developing a new supply chain for its products. The company will also benefits from experienced chief executive officers from IBM who have experience of the global market. IBM has a proven record of accomplishment in the developing world, which Lenovo will acquires as it suits its expansion strategy into the emerging markets. Lastly, the acquisition will benefit Lenovo in that it will acquire the technical expertise from IBM employees.

  1. Considering the contingencies in organizational design, why did Lenovo recently restructure its business units (sales and marketing)?

The move by Lenovo to restructure these two business units was aimed at lowering operation costs by $ 250 million because it will entail reduction of its workforce by 5 percent. Another reason was founded on the need to relocate its international supply chain closer to suppliers and manufacturing. The reduction of hierarchies in the company’s sales structure will speed up decision-making. Finally, competition in mature market presents limited growth potential for the company; therefore, the restructuring was aimed at helping the company focus on emerging markets that offer growth potential.

  1. Considering the contingencies in organizational design, why did Lenovo recently restructure its product organization?

The decision by Lenovo to restructure its restructure its product organization into Lenovo Business Group and Think Business Group was intended to promote the company’s ability to innovate and branding in the mainstream and premium market sectors. It will also enhance the decision-making process and implementation. Additionally, the restructuring process will help the company in lowering costs and enhance its control on the production process and to promote component makers that are based in China. Another reason for the restructuring was to enable the company enter the high-end market, which has been a challenge by using the Lenovo Brand, which is suited to the mainstream market. Think Business will be the brand that will enable it enter this market.