ABSTRACT
This chapter reviews Lenovo’s acquisition of the IBM PC division (PCD). It starts with a literature review of why failures in mergers and acquisitions are so common in the technology industry and identifies the three most common traps: misjudging strategic fit, paying too much, and cultural clash. It then discusses the seven key factors that enabled Lenovo to succeed in this acquisition: plan carefully before proceeding, take a learning approach, reform the fundamental, globalize the top team, embrace and leverage diversity, build a winning culture, compromise anything but strategy. It ends with a discussion about the external conditions and internal prerequisites for emerging economy-based multinational companies (EMNC) – without superior technology or brand – to out-compete established developed economy multinationals (DMNC).
