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1449 Aryan Singh Jaipuria Jaipur ACF 6025 1603996282

The document summarizes the advantages of corporate restructuring from Lenovo's perspective after acquiring IBM's personal computing business. [1] Cost reduction through focusing on core business models and improving efficiency by removing distraction from multiple products. [2] Focusing on core business values and growth by improving product diversification. [3] Promoting internal strategies to leverage global market leader position and reasonably niche in core business.

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30 views3 pages

1449 Aryan Singh Jaipuria Jaipur ACF 6025 1603996282

The document summarizes the advantages of corporate restructuring from Lenovo's perspective after acquiring IBM's personal computing business. [1] Cost reduction through focusing on core business models and improving efficiency by removing distraction from multiple products. [2] Focusing on core business values and growth by improving product diversification. [3] Promoting internal strategies to leverage global market leader position and reasonably niche in core business.

Uploaded by

AryanSingh
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ACF Answers

Ans.1. (a) So , as per the Lenovo case there are some advantages that company think from the
point of view of corporate restructuring is :-

 Cost Reduction :-
The major reason for IBM restructuring is the reason for growth in the their sales like in
previous quarter there is no growth in sales for china and in other countries so first reason
is this and the need for the comparison is higher in their desktop and notebook and
division could be utilized on the basis of core business models and ethics and helps in
utilizing expanding business.

 Focus on core business :-


The company growth shows that there is need for focus on core business values and
growth in there product because in 2015 there is less sales as compared to sales increased
in 2016 which shows that Lenovo has a room for its product diversification.and helps in
improving effeciecny by removing distraction on building and selling multiple products
at same time.

 Bing Niche :-
On the basis of estimate valuation of merger helps to promote internal strategies for the
company regarding their external strengths and weakness . Due to its global leader
position in the market . Company should be reasonably niche in the market for its core
business and ethics and helps in solving diversification of business. And helps in
targeting bigger market which could lead to success of the bigger company and firm for
Lenovo.

Ans 1.(b) The type of acquisition used in this case in horizontal merger which helps in
further expansion of the business line. Advantages are :-
1. Increase in market share :-
There is increase in market share of the business in lieu and core aspect of the
business and helps in utilizing brand image created by IBM in the market which
helps in expanding operation outside china for its global market operations for
accessing its large market.

2. Synergism :-
Helps in operations of scale and efficiency of Lenovo by fully optimisation of
resources and knowledge provided by the user and increasing fixed cost over
increased production.

The company can be joint venture because of several advantages like :-

a) Access to new markets


b) Low cost of Production of goods and services

Ans 1.(c) Risk involved in this business are :

1. Risk of Diversification
2. Risk of Knowledge
3. Risk of equity portfolio
4. Cultural Differences :-

Company face cultural differences due to cultural classifications which lead downfall of
merger and acquisition.

5. Legal Risk :-
Company face legal risk in complying the legal rules and regulations which a company
does not follow in real world so in the case of merger and acquisition because of non
compliance of rules and regulation as Lenovo directly follows synergism without taking
help of ibm and cannot be able comply with the instructions of the firm and cultural
challenges followed by Chinese company does not comply with legal rules and laws so
it is not affected.

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