First Growing Chinese Companies - Essay Example

First Growing Chinese Companies Layer 1: Lenovo Lenovo Company was initially called the Beijing Legend. The company was established in 1984 by technician from the China Academy of Sciences. The company distributed machines for rival PC makers and IBM. The Beijing Legend also sells printers from the Hewlett-Packard. In 1988, the company developed the Hong Kong Legend. In 1990, the Legend started making and selling personal computers under the company’s name. In 1994, Lenovo made its stock public by selling its shares. In 1999, Goldman Sachs managed the sale of the company’s new shares. The company’s shares were at peak in 2000. A year later, Dell took the largest share of the personal computer market. Lenovo acquired its original name in 2003 to avoid the oversee brand infringement. Lenovo prepared its expansion outside the country of China, which overtook Japan to be the 2nd largest personal Computer market. In 2004, Lenovo changed its name to Lenovo Group. The company’s 1st quarter Personal Computer shipment growth in the country lags competitors like Dell. The company holds 11% of the Asian market. Sales of services for Lenovo and hand held electronics grew at a faster rate of all its products in the latest 2003 and 2004 financial year. On December 3rd 2004, the company discussed with IBM about selling its Personal Computer business. Four days later, the purchase of the IBM PC was announced. The internationally competitive tasks in crucial sections of the ICT emerged from the technology and science institutions that already existed. The key example of a company is Lenovo. The company was developed after China realized that it needed to invest in a computer. One of the challenges that the company faces is the absence of Chinese language processing instruments in the machine. The company overcame the above obstacle by coming up with sophisticated indigenous creativity. During the process, they set up themselves on the direction that allows the company to compete globally with other leading computer companies and become a leader in their own way. Consequently, the Chinese processing expertise that Lenovo used came from institutes that conducted research. The Chinese language applications and other capabilities, Lenovo was able to grow at a faster rate. The company came up as the leading success story of China. The success of the company was a benchmark when it went global. In 2005 the company acquired IBM Personal Computer. IBM later gave birth to the mass Personal Computer computing era and Wintel guidelines that ensured that Intel and Microsoft gained a better place in the industry. The brief analysis of the Lenovo focused on the earlier times when the needed conditions were in a position that would result to a learning growth trajectory that is sustainable. The trajectory led China to become a major player in Layer one of the global ICT ecosystem. China is strong in the equipment’s and computers of telecoms. In the telecoms equipment Huawei is making a significant effect on the global market. Other firms found in this market are Ningbo Bird and Datang. The country has become a leader in consumer electronics due to the migration of Chinese in the production from Taiwan, Korea, and Japan. Various mediums sized companies have erupted and are struggling to find the Chinese market niches. Layer 2: China Telecom China Telecom established in 1999 after previously China Telecom split into China Satcom, China Mobile, and new China Telecom. China Telecom was mandated to mobile phones. The newest China Telecom held about seventy percent of the old China Telecom resources. China Telecom is found in Telecom Services Industry. The industry is facing very little competition. The two main companies in this industry are the China Netcom and China Telecom. The two companies are geographically separated and their competitive relationship is limited with one another. The company has formed competition with its competitors between their services and between the companies. Since 1994, the industry has shifted to state run oligopolistic industry from state run monopolistic industry. China Telecom competes with China Mobile via the adapted service called Xiaolingtong. The service is based on the Personal Handy Phone System and Personal Access System. The adapted service comprises of the wireless local loop that enable the consumers to access fixed line network. The telecom equipment of China is characterized by the strong competition between foreign firms, between foreign and domestic companies, and between the domestic firms themselves. The leaders in global producers of telecom equipment are involved in the market of Chinese where competition is among the big players on the market like ZTE, Datang, and Huawei. Competition is also in the mobile handset firms like the Keijan, Amoi, Ningbo Bird, and Konka. The industry has a distinguishable feature because of the constrained functionality that the authority of China seems to have for competition. China Telecom struck a deal with China Netcom to reduce competition between the two companies. The reason for striking a deal is because the country requires a huge amount of money to set up a global business for the companies. When competition is strong, the profit that the company incurs will reduce the network operator’s ability to invest in the networks. From the daily post it is noted that the company and government official of China have been cautious about the fierce competition and the construction of infrastructure. The fierce competition wasted the resources of the state and limits profit. However, when strong competition lacks, this means that the consumers from China will pay the price and finance the investment. However, the extent of payment is limited by the competition that is existing. In summary, the country has developed its tradeoff between investment and competition. It is unclear if the effect of the company’s modernization will favor the model of Korea and Japan. After the introduction of Next Generation Network by China, the country will be challenged with dealing the network due to rapid technical change. During that time, there will be enough information Layer 3: Baidu Baidu is an internet search company found in China that bears the largest industry share in the market of Chinese. The company has a first mover advantage existing in the sector of internet based applications and content. The company was established by Robin Li and Eric Xu Yong. Baidu supports the first mover hypothesis which was established in 2000. The company had to wait the internet mass adoption in China because the company waited the consent from the Chinese government. The company was designed as the best method for users to look what they look for online. The company has strived to fulfill the mission by listening to the needs and wants of the users. The company is also focused on powering the best technology used for updated local preferences and tasted. The success of the company is based on the company’s ability to understand the Chinese culture and language. The knowledge enables the company to tailor the search technology for the needs of users. The company also provides the users with various channels to share and find information. Additionally, the company powers various community based products like Baidu Post Bar. The sales effort of the company comprises of the direct sales team is cities and distributors. The company faces various legal challenges over the business model. Other legal challenges include the alleged fraud, alleged unfair competition, and alleged brand infringement. The government of China has favored the company over the foreign competitors. The primary sources for the company are as a result of auctioning off some of the search key words. Another challenge that the company faces, is prioritizing the type of websites that the company issues a license. For instance, the company was attacked by a state television for issuing top ranking of medical websites that are unlicensed and blocking some of the websites that we're unable to pay for the listings. Baidu is contemplating of going global. The company launched the smart phones, internet TV and now the company has set up wireless routers. Baidu has already come ‘up with its own Smartphone and it announced a tie-up with smart TV with TCL; a TV maker. The company is aiming at channeling its internet services to people’s TV, tablet PC, PC’s and Smartphones. Reference The New ICT Ecosystem: Implications for Policy and Regulation. (n.d.). Google Books. 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