In 2004, Lenovo acquired IBM with a purpose is to be leader in global PC market.

The strategy of Lenovo is transnational strategy.

Transnational strategy is focus on cost reduction and customization products.

Cost reduction could be achieved by location economic for example organization can set up factory in
specific region to achieve low labor cost or low price of raw material. Additionally, cost reduction also
can achieve by economic of scale or learning effects.

Strategy of Lenovo we can observe cost reduction via economic of scale, location economic, transaction
of famous brand name, technologies as well as importance human resources.

After acquisition Lenovo can expand their business in the world. While IBM has a comprehensive
network in PC sale on a global basis, Lenovo has a strong client base and sales infrastructure in the
Chinese market. Of course that Lenovo can achieve economic of scale when the acquisition lead Lenovo
become the third largest PC maker in the world.

Additionally, location economic could be observed via changing headquarters from China to New York.
By doing this Lenovo can keep experienced managers and employees of IBM continue working for
Lenovo. Lenovo can save money for training and recruitment. Many manufactures in China can achieve
low labor cost also.

To entry global market, Lenovo has to build a strong brand name to compete with famous brand such as
Dell, HP, and Apple… this is not easy and may need a huge amount of money for implementation. But
when Lenovo buy IBM, Lenovo can use IBM brand name as a sub-brand for their product such as
ThinkPad series was valued and recognize in the world. This can save cost of branding for Lenovo.
Moreover, IBM has technology in PC market such as fingerprint technology which can secure data or they
can provide durable hard disk which can survive a six-foot drop. All of these will be transferred to Lenovo
after acquisition and Lenovo can save cost for R&D.

Customization Products

As we can know that IBM was a famous brand with the success of ThinkPad series. This series was
valued and recognize by engineers and architects. The reason is that it is durable, smooth operation and
high security, and can work in difficult conditions. The problem is that the design of IBM is not accepted
by customers, especially family customers who are looking for fashionable designed products. In contrast,
Lenovo can provide better design. The combination of IBM and Lenovo can produce products with better
design, good quality, more function and acceptable price for family customers. Moreover, instead of
produce new products for family purposes, Lenovo still continue ThinkPad series for engineering purpose.