The Lenova acquisition and Dell's reaction

Dell has its problems with customers. Those who follow Jikon's blog (Daily Ranting) will know about this. And may be one of the reasons is that they are no longer focussed on computers alone but manage their entry into other business segments, such as servers or other consumer electronic products, thus, lost their razor-sharp edge.

But consider that as a operationally efficient company, their focus on consumers is a bit different from other companies that go for consumer intimacy (such as consulting firms) or product leadership (i.e.Nokia or Samsung).

However, Dell's model has its advantages - consumers and corporations can profit from their low prices - and their business model has other companies struggling. But the company has a great management team that does a lot of things right as well.

Many companies fear mergers in their markets - they fear to be left behind despite the fact that not many mergers are very successful. Just think of the AOL/ Time Warner merger or the DaimlerChrysler one. These are companies that are still struggling for reasons outlined nicely in Ben's blog.

So when IBM sold its PC unit to Lenova, calls are getting louder for other companies in the same business segment to react to the merger. Even Dell was called upon. And, what is it that a great company is doing? It doesn't necessarily bow to those who call out. It has a longterm vision and is not hesitant to even have its shareprice pounced (I am not saying that this happened to Dell).

A great company reacts in a way Michael Dell reacted when he was asked about the mentioned merger:

"I'm not a big fan of taking companies and smashing them together. ... When was the last time you saw a successful merger or acquisition in the computer industry?" Or, how fantastic is that:

"We like to acquire our competitors one customer at a time." That's a statement of a survivor, or even better, of one, whose company is able to shape markets!!

(By Asia Business Consulting)


Update: Bruce made me aware that it is actually Lenovo and not Lenova. An interesting case of branding since both names are used in the press. It appears Lenova is used in the Western press with Lenova more in China. I wonder how it came to this point.