Was the company right to make these acquisitions when it did?

Founded in 1984, Lenovo is one of China’s biggest computer fi rms. Unlike many Chinese fi rms, it is run like a private company with little state interference from two head offi ces, one in Beijing, China, and the in Morrisville, USA, with its research centre in Japan. In 2005, it acquired IBM’s PC arm and quickly grew to become one of the world’s biggest PC makers, capitalizing on its low-cost manufacturing base. In 2014, it purchased Motorola smartphones from Google for $2.3 billion. Although Google had failed to make profi ts from Motorola in the three years it owned the company, Lenovo felt that the potential for economies of scale and scope would enable it to consolidate its market position and threaten Samsung and Apple in the growing smartphone market. In the same year, it purchased IBM’s low-cost server unit for $2.9 billion, believing that these units would be needed to store ever- increasing amounts of data.