This document enumerates the national advantages of the withdrawal of Lenovo from China. After being a closed economy for a relatively long time, China is eager to become a globalized economy. This provides an advantageous prospect to companies that are trying to become market leaders through rapid expansion. The main attraction for companies is the availability of ample low cost labor in china. To meet increasing market demands Chinese businesses need to minimize cost, with simple products. The manufacturers should be able to cater to a ballooning market and remain flexible in the production of large and variable quantities.
[...] This analysis would therefore suggest the export complex to Lenovo as the first international strategy. This is the strategy conventionally adopted by emerging companies wanting to develop a strong brand. However, if the principal national advantage to Lenovo is the low cost labor in China, the distance between China and the United States, the need for constant innovation and customer orientation make the setting up of a research and development unit in America mandatory. These two activities should bring together geographically remote coordinates and lead to a comprehensive approach. [...]
[...] The popularity of Lenovo in the U.S. market is indisputable, but in the long run, it is a difficult market to penetrate. The largest global manufacturers are American, and they give great importance to their local clientele. The local competitors like Dell also have a very strong international presence, and therefore present still competition to any international brand. To conclude, the American market was a challenge for Lenovo owing to its vast difference from the Chinese market, and competition from brands with great expertise and a large global presence. [...]
[...] To summarize, although Lenovo and IBM have successfully bridged the gap and reached out to Chinese customers in the last 5 years, the cultural differences between the American manufacturers and Chinese consumers still pose a challenge, in spite of the sincere attempts at adaptation made by both parties A profound political and administrative distance Whereas China is a communist country with a system of governance that is deemed cumbersome and corrupt, America is basically a capitalist country with a government that is judged on morality and effectiveness. [...]
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