Competing in the Global Marketplace Essay Example | Topics and Well Written Essays - 1500 words

Competing in the Global Marketplace - Essay Example This paper presents a practical example of applicability of this model. The example presented is the world famous (and stunning!) acquisition of IBM's Personal Computer and Laptop business by Lenovo, China. The paper puts emphasis on the weaknesses of IBM & strengths of Lenovo that resulted in this acquisition, the challenges that Lenovo faced after this acquisition and the strategies that Lenovo planned to mitigate the risks posed by the challenges. Computer Electronics Manufacturing in China - the case of Lenovo: A brief on Michael Porter's model is essential at this stage before the mapping is attempted. Following figure presents the model (http://www.valuebasedmanagement.net/methods_porter_diamond_model.html). The model presents a strong correlation of four major influencing factors governing the success of an Industry at a National & International level, and the control of the local Government on these influencing factors. Firm Strategy and Rivalry: This corresponds to an imposed urgency on the firm to boost Productivity and Innovation due to direct competition in the Local Market. This influencing factor is governed by the system in the country (enforced and controlled by the Local Government), in which companies are established, organized and managed (Recklies Management Project GmbH, 2001). Demand Conditions: This corresponds to the domestic demand conditions imposed on the firm by end customers, scope of products, and demand-supply ratio. These demand conditions can get internationalized if the Government Machinery supports a structured mechanism to achieve this as not all domestic strengths get recognized in the International Markets (Recklies Management Project GmbH, 2001). Related and Supporting Industries: A domestic Industry grows substantially if the local government is successful in creating and administering a sound business framework. In this framework, a strong network of competitors, suppliers, service providers, brand managers, marketing agents, etc is created which collectively influence a healthy growth of this business as well as increase demands & boost supplies. Factor Conditions: This corresponds to a sound business support framework to the business that includes (but not limited to) skilled manpower, infrastructure, supply channels (like liberal import policies), funds (availability of loans from banks and venture capitalists), etc. China serves as the manufacturing powerhouse of the world because of Government policies & Capital investments in this direction, huge lands available, excellent Infrastructure, hands-on skill based education system, very low cost labor, a number of low cost suppliers and ambitions to match the strong influence of Taiwanese counterparts in the Global markets (see references). Given all these strength parameters of China and a killing recession in the Western IT Industry in the beginning of this millennium, Global majors like IBM decided to outsource a major part of their expensive manufacturing operations to manufacturing giants (Like Lenovo) in China. As a matter of fact, Lenovo, China has been manufacturing for IBM for