Chinese international expansion Essay Example | Topics and Well Written Essays - 2500 words

Chinese international expansion - Essay Example h the solid backing from the parent organisation, ICT, Lenovo attained huge success through add-on cards market that became the utmost chief source of returns in this phase (Ronghui, 2005 p. 19). From 1991, Lenovo Group Ltd. started to vend its own PCs brand. Because of its suitable business approaches, it put up a renowned PC brand within Chinese market within a very brief time. By 1994, Lenovo Group converted to a public firm, listed at the Hong Kong Stock-Exchange. By 1997, it beat IBM, HP and Compaq turning into the leading computer vendor in China and has remained in the first place up to now with an incessantly expanding market-share of virtually 30 per cent of the total market-share. Its product groupings have been differentiated to encompass PC modules, servers, printers, digital cameras, network machines and mobile phones (Ronghui, 2005 p. 25). Though Lenovo attained the excellent success within national market, its global business still remained in a premature stage. Afore the IBM PCD’s acquisition was announced, its foreign ventures have been established only within a few overseas countries largely focusing upon East-South Asia (Ronghui, 2005 p. 22). Lenovo sales from foreign market accounted for roughly only 10 percent of Lenovo’s overall revenue. Before the IBM PCD’s acquisition, Lenovo was, nonetheless, continuing with a premature phase of internationalisation procedure of employing stages approaches, for instance, Dunning’s eclectic model or Uppsala model. For example, through employing Dunning’s IDP methodology, Lenovo’s was in the phase two up to time of acquisition. Rendering to these stages concepts, Lenovo should have followed an incremental procedure for its transnational expansion procedure. Nonetheless, Lenovo assimilated IBM PCD and... Overseas investment holding firms play a crucial role within the outward investment stratagems of Chinese private and state-owned businesses via onward journey outward foreign direct investment. A good example is the IBM PC’s acquisition by Lenovo. Seeking strategic assets is absolutely not the most crucial driver of outward foreign direct investment within these private corporations, majority of which can suffer more grim financial constrictions than big state-owned firms. A crucial reason for international expansion in these companies is to expand affairs with other prosperous TNCs, often operating as suppliers to engineering OEMs, and/or as providers of services. In the case for Lenovo, it is evident that the companies in the early instance, they develop their own fundamental resources as well as capabilities. There exists a genuine function for tax harbours as well as offshore financial hubs, as they allow economic endeavour to transpire that otherwise might never have occ urred. The establishment of partners in tax sanctuaries is not essentially harmful. Undeniably, an unplanned tax laws consequence supporting foreign investment within China is that it has generated inducements for firms to move overseas. Offshore holding firms in renowned tax harbours, in effect, may as well build a good basis for more international expansion.