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Business Chinese Firm to Acquire IBM PC Division Amid some random speculation that IBM’s long-term goal is to either partner with or acquire its competitor Apple Computer, the company last December announced plans to sell off its PC Division to Chinese-owned Lenovo Corporation. According to a December 7th press release from IBM Corporate, “Lenovo Group Limited, the leading Personal Computer brand in China and across Asia, and IBM announced a definitive agreement under which Lenovo will acquire IBM’s Personal Computing Division to form the world’s third-largest PC business, bringing IBM’s leading enterprise-class PC technologies to the consumer market and giving Lenovo global market reach beyond China and Asia.” The deal, in which IBM will pay US $1.25 billion in cash and equity with a total transaction consideration of about US $1.75 billion, should be completed in the second quarter 2005. The Troubled US Airline Industry There is no doubt about it the U.S. airline industry is going through some economically challenging times. Ever-growing operational expenses, high fuel costs, and intense competition from the low-cost “no frills” carriers are just some of the major factors that have forced some of the big flagship players like US Airways to file bankruptcy. Add to this mix, the lingering fear of flying that the terrorist attacks of September 11, 2001 have created for the typical American traveler. The result is higher costs to run a major carrier, but no way to pass on these costs to the travelers who fly the airways. Major airlines are trying to stay economically afloat in today’s tough market by reducing operating costs as best they can. But, there is only so much they can do. Global Marketing Pitfalls In this day and age it is not uncommon for entrepreneurs in the marketplace to visualize opportunities when considering the option of expanding their products and services into the Global arena. In fact, most domestic firms understand the paramount importance of introducing their products to countries outside their immediate boundaries and being able to compete aggressively with other foreign entities in their own environments. Well-exercised entrepreneurs are willing to test the potential for introducing higher quality goods and services that they feel would offer alternatives to the local consumer. Although not totally over, the days of offering last year’s products to countries in need is fast becoming a practice of the past. Numerous countries, with access to the Internet are now demanding updated versions of products, services, equipment and other state-of-the art offerings that are now more than ever readily available. Globalization is no longer confined to just high-tech product offerings. Several major firms such as McDonalds, Pepsi Cola, Goodyear, Kodak, and Levi Strauss for example, have demonstrated and mastered the art of effective global marketing.. China's Tiger Economy As is widely known, there is a general economic slowdown worldwide, which at the time of this writing is just beginning to affect China. Nonetheless, the vast country with its 1.3 billion population, of which some 900 million are described as peasants, is still driving world trade. There is a two-tier economy in China with the thriving maritime coastal cities driving the economy, while the poorer inland cities and towns eke out a living off the land and in manufacturing. China is following in the footsteps of Japan, which became an Asian Tiger economy in the 1960s, followed by South Korea, Thailand, Malaysia and to a lesser extent, Taiwan. China is already the world’s sixth largest economy. The country’s GDP stands at a massive $1.4 trillion. Crude Oil, US and World Economy The present unrest in the middle east and particularly the oil producing country of Iraq could not have come at a worse time insofar as its effect on the global price of oil. One of the least discussed reasons why the slow democratization in the middle east has largely been ignored by western powers until now is the feared repercussions of the effect such sustained hostilities could have on the western and world economies that depend on the oil produced from that region. The lessons learned from the skyrocketing oil prices of the seventies have largely abated and newer and more aggressive western governments have, to a great extent, sidelined the diplomatic and balanced relationships that had been in place in dealing with most middle east countries until recent times. The jury is still out on the effect of these approaches or whether a true change in approach is needed. The first Bush administration fell short of capturing or killing Saddam Hussein at least with this consideration in mind. |
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