Digitization is another factor that will make Lenovo competitive in the digital market. After the acquisition of the Motorola company, Lenovo is anticipating to produce of improved Motorola phones as they have acquired the license of the “rich portfolio of patents and intellectual property rights. Under this acquisition, Lenovo will retain over 2000 patents and license agreements, and this will allow Lenovo to modify the features of the mobile phones to suit the need of the customers in China. With this licensed permission to digitize, Lenovo will therefore have the advantage of achieving the fete through specialized skill and the partnership with Google company (Rahman, Lambkin & Shams, 2021, p.131). This will allow the Mobiles phones to be suited to the customers’ needs, giving Lenovo an increased pool of customers for the new product. This partnership with Google will allow Lenovo to expand its current portfolio of handsets and gain Motorola’s branding to access the key North America and Latin markets. This deal will improve the Lenovo brand and make it the third-largest dealer and manufacturer of mobile smartphones. The acquisition deal by Lenovo is a strategy to gain markets outside China by entering Motorola’s markets, including India, South East Asia, and Russia (Tao, 2022, p.82). This will help Lenovo leverage Motorola’s brand presence giving the company a competitive advantage in these new markets.
Market Share Demographics
The acquisition of Motorola by Lenovo opened new doors for Lenovo to explore new markets. Before the acquisition, Lenovo did not have a market for smartphones; the only market it had was that of laptops and other accessories. Therefore, by acquiring the Motorola mobile phones company, Lenovo anticipated an increased market as it will have access to the smartphone market share, allowing competition with other companies. Synergy gain theory which states that increased scale of operations brings maximum benefits in financial gain and operating synergies, has given Lenovo the financial gains from the increased market share from the acquisition. The synergist operations combination of Lenovo and Motorola illustrates a great strategy for improving performance and increasing geographic market accessibility (Tao, 2022, p.97). The economies of scale from the diversification of Lenovo products have given the company an increased competitive advantage. Lenovo has increased its geographical portfolio in the market, more so in America, which has helped the company to double its profits through the increased market share and the diversification of its products, including the Motorola smartphones.
Lenovo also gained the advantage of having a shortcut route to getting into the new market. Motorola was a significant brand in the smartphone market segment, with a large market in Western India, Europe, and Latin America. This mobility allowed Lenovo to make a grand entry into the mature smartphone market, which was growing; therefore, Lenovo did not gain the smartphone market slowly like other companies. Therefore, the company did not lag in gaining market share, and this helped the company to build a strong presence in the mobile segment of the market. Lenovo believes that with Motorola’s presence in the global markets, it will have an easy entry into the new markets, thus creating a brand that will be difficult to match with its competitors.
Expansion Portfolio
Lenovo’s acquisition of Motorola was a strategic move to acquire and keep its place among the elite smartphones and mobile phones business. The acquisition and maintenance of Motorola customers by Lenovo allowed an inorganic growth route to Lenovo as it gained the mobility already created by Motorola on the market. The decision to acquire Motorola was a signal to the other mobile and smartphone market bigwigs like Samsung and apple that there was a new dealer in town (Obama, 2021, p.4). This will take the competitors back to the drawing board to learn about marketing strategy of Lenovo. Doing this will therefore grant Lenovo the opportunity to explore the market well and gain a grip on its market. By offering diversified products, Lenovo will likely expand its market portfolio and provide increased competition to the competitors in the smartphone segment. It has utilized the rand value of Motorola, thus giving it a competitive advantage in the market.
Full Technology Package
The Motorola Mobility deal will allow Lenovo to be a global player in the world of innovation. The two companies have had a history in the past of innovations, and their coming together gives them a leeway to explore more technological innovations. New product lines will be made, with both Lenovo and Motorola customers seeing completely new product brands. The idea behind the acquisition is to give Lenovo a chance to deliver a full technology package to big and small customers. Singh argues that Lenovo will have the opportunity to offer a wide range of digital products that will keep the customers within their product line as Lenovo will provide almost every technology package (Singh, 2017, p.2). With the acquisition, for example, Lenovo will have all different products in the market, like smartphones, ThinkPads, tablets, ThinkCentre products, and low-end and high-end servers. This will make customers remain within Lenovo’s product line for their needs and not need to look at the products from other competing companies. With this fete, Lenovo will therefore have many customers with their products, offering increased competition to other companies like Apple and Samsung, who have already established themselves in the market.
Conclusion
The acquisition of Motorola by Lenovo was a well-thought decision that would go on to make Lenovo one of the biggest brands in the market. The deal was completed in 2014 and gave Lenovo a shortcut-cut route to global markets that Lenovo had not reached, courtesy of the great market share that Motorola had and that Lenovo effectively maintained. The acquisition deal will enable Lenovo to gain an immense competitive advantage over Motorola through increased customer base digitization, a full technology package, the expansion portfolio, data trafficking, and opportunity vs. costs. This deal will result in Lenovo having an increased market share, giving it an immense competitive advantage to the business and competing with other bigwigs. It will also allow Lenovo to exploit the opportunities regardless of the costs. The gains from the android platforms will give Lenovo new energy in thethe market, thus giving its competitors a ‘run for their money in the market.
References
Singh, N.P., 2017. Lenovo Acquired Motorola Mobility in a Bipolar World of Mobile phone makers. Industrija, 45(2).
Tao, L., 2022. Key Choice of Enterprise Internationalization Strategy. In Huawei Wisdom (pp. 71-103). Springer, Singapore.
Rahman, M., Lambkin, M., and Shams, S.R., 2021. Cross-border mergers and acquisitions: Impact on marketing capability and firm performance. Journal of General Management, 46(2), pp.129-143.
Obimma, C. (n.d.)., 2021. The ‘Why’ Behind Mergers and Acquisitions – THISDAYLIVE. [online] www.thisdaylive.com. Available at: https://www.thisdaylive.com/index.php/2021/01/18/the-why-behind-mergers-and-acquisitions/ [Accessed 13 Oct. 2022].
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