International Management 7 - Essay Example

This led to the two companies forming an alliance to benefit fro each other's strengths and share in the weaknesses. In 2001, Lenovo was the biggest computer company in China and its business was booming since they did not have any serious competitors. Moreover, China had not joined the WTO; hence foreign firms did not have access to the Chinese market. Lenovo therefore saw no need in forming an alliance since the conditions were good for them. However, in 2004, the business environment changed tremendously with Dell emerging as a serious competitor locally.

Also, the Chinese market opened up to foreign companies, depressing prices and reducing margins (London, 2005). In 2004, the Chinese companies experienced pressure from foreign firms, which flooded its market with cheaper products, posing a serious threat to the local firms. This pressure transformed Lenovo from being a local Chinese company to a global one, selling 60 per cent of its products to other countries. Lenovo Group's results for the second fiscal quarter of 2006 saw the company's consolidated revenue increase to US$ 3.7 billion. The firm's shipments globally increased by about 10 per cent, this being higher than the industry's average of 8 per cent, with most of the growth occurring in China.

This growth has been attributed to an improvement in the company's operational efficiency due to restructuring efforts by the company.However, Lenovo faces some challenges in some of its segments due to competition and slow growth in the mature PC market. Lenovo's brand awareness in the US is very weak compared to that of China, which has strong sales, providing the company with the necessary cash for sustaining losses in the overseas market. Lenovo Group is faced with big challenges in the global markets, notably the tough international price competition.

Part TwoThe Beijing Businessville Hotel and Around the World Hotels alliance Issues need to be consideredBeijing Businessville Hotel and Around the world Hotels need to put into consideration a number of factors before they get into an alliance. This is due to the differences in their current environments as well as other key factors. Both hotels must consider how the economic system of the new venture country will affect their business since they operate in two different economic systems. They must also consider the legal systems, political systems, physical infrastructure and technical know-how of the country they will be operating in.

They must also find ways of adjusting to these new conditions in order to operate optimally (Lockyer, 2007).Moreover, there are socio-cultural factors to be considered seriously before the alliance. Such factors include the language used by the host country, religion of its people and education. Cultural factors include the beliefs of the people in the host country, their norms as well as values. They must also bear in mind the attitudes of the people in these countries with regard to such issues as change, individualism, materialism, time and work.

Moreover, individual and group employee behavior must be seriously looked into, focusing on issues such as