Tag: Business Strategy

Categories
culture

Corporate Social Responsibility

In recent lectures of economics and business fundamentals the issue regarding firms being socially responsible was brought up. In commerce class, we discussed why it is important for businesses to act ethically, advantages of acting ethical may include attracting consumers as well as the possibility of motivating employees. However in economics class the professor stressed how it is now “cool to be green”.  Which begs the question of whether or not businesses can act socially responsible as a business strategy or whether they really care.

In companies in the Fortune 500 firms in America, all firms would publish either sustainability, CSR or environment reports. This illustrates how in order to survive in today’s competitive market a firm has to in one way or another be socially responsible.

In my opinion whether or not the firm really cares about being socially responsible or using it as a business strategy to remain in the market would come down to the culture of the business. The culture of the business would have its own boundaries which creates distinction from one organization from another. In the end it comes down to a lot of factors and it would ultimately be up to you the consumer to decide whether or not the business or firm is socially responsible.

Sources: http://www.sustainable-supplychain.com/fortune.html

Categories
Growth Strategy

Lenovo Acquiring IBM PC division as a growth strategy (2004)

Lenovo was the market leader in China with a global market share of 2.2%. However when China joined the World Trade Organization (WTO) and almost overnight the largest global PC companies became very active within the Chinese market. Lenovo was under tremendous threats as it was unable to differentiate its products in both technology and design. In addition Lenovo did not have a globally recognized brand, did not have a management team that was capable of managing a global company as well as not having strong innovation capabilities.

Luckily IBM wanted to sell their PC business and under the circumstances Lenovo was in it was to their best interest to acquire the business. Throughout the acquisition in the year 2004 there were many interesting strategies used by Lenovo to become a globally recognized firm as well as retain important consumers, for example IBM allowing Lenovo to use their brand name on the Thinkpad/ IBM brand name for a period of time allowing time for the major customers time to adjust to the change.

In my opinion the transaction done by Lenovo was very successful, not only did they minimize most of integration integrations risks such as retaining big customer. Lenovo transformed itself from relatively small company that only sold low end PCs in china to the second largest PC vendor in the world and my take first in the upcoming quarter overtaking HP.

Sources: http://english.sohu.com/20041209/n223402729.shtml

Categories
Growth Strategy

HP- Job Cuts reaches 29,000

Recently, the world’s #1 PC producer, HP has announced that they are going to lay off an additional 2000 more employees than anticipated. Bringing the number of employees to be fired from 27,000 to 29,000. HP will cut jobs through a combination of voluntary cuts, involuntary cuts and also early retirement offers.
          A reason as to why HP is undergoing such massive restructure may be due to the competition brought on by PC producing powerhouse, Lenovo. In data released by the IDC IN July, we can see that Lenovo is in second place with 14.9 market share while HP owns 15.5% of the market. A really small difference in market share as HP is in decline while Lenovo is “rocketing ahead”. Some
     Another reason why HP has begun this multi-year restructuring is because the company is changing its focus from producing personal computers to services targeted at corporations, similar to the change IBM did a few years back. The difference however this time is that IBM was successful in selling their PC producing division while HP could not find a buyer for the PC producing division
     When companies layoff employees, the reasons may be just or unjust. Some may argue that often or not, laying off employees is the easiest or rather laziest way to cut costs rather than to look for other non-consumer related costs, as these costs may be harder to find. The long term restructuring also may cause employees to feel, as they feel insecure about their jobs therefore according to Maslow’s hierarchy of needs, ‘safety’ is not met thereby employees would not be able to have motivation to give their 100% to the company and productivity of the company will likely decline. At the same time according to the stakeholder theory; which is the idea that companies cannot look at stakeholders individually. HP is not able to make their employees feel secure so again employees are not willing to input 100% of their effort in making the company or firm better.
All in all, with reference to details above, HP seems to have a difficult path ahead. The biggest question remains is if HP can keep the crown for most PCs produced and whether or not they have a plan to keep their employees motivated.
Sources: http://www.decryptedtech.com/news/hp-increases-layoffs-to-29000
Picture: http://allthingsd.com/files/2012/09/HP.jpg

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