abstract
After nearly 30 years of development, China's information industry has initially possessed scale and influence, and initially formed a complete industrial chain. Its huge industrial scale and good economic benefits have made great contributions to China's economic progress, and Lenovo Group is the leading enterprise in this field in China at present. With the integration of the world economy, Lenovo Group is facing the competitive challenges in domestic and international markets, especially in the information age and the modernization of management science. The behavior of enterprise managers always involves strategic issues. As a new management method, strategic management has injected new vitality into enterprises, and strategic management accounting came into being. Strategic management accounting is a new type of accounting that serves strategic comparison, selection and strategic decision. It is the extension and penetration of management accounting into the field of strategic management. It can use special methods to provide enterprises with information about their own and external markets and competitors, and through analysis, comparison and selection, help enterprise management to formulate and implement strategic plans to gain competitive advantages. It is an effective means for enterprises to make strategic decisions. The formation and development of strategic management accounting is the inevitable result of modern market economy and competition, and the inevitable requirement of establishing and perfecting modern cost management system, which makes management accounting enter a brand-new development stage. In order to make enterprises develop in a virtuous circle, it is necessary to implement strategic management accounting.
Lenovo successfully acquired IBM's PC business department in 2005, which took a solid step towards Lenovo's internationalization. Based on the idea of strategic performance management and M&A theory, this paper analyzes the case of Lenovo M&A IBM, aiming at analyzing its M&A thought and providing meaningful ideas for the future development of IT enterprises.
Keywords strategic cost Lenovo IBM M&A theory
abstract
After nearly 30 years' development, China's IT industry has initially gained scale and influence, and initially formed a complete industrial chain. Its huge industrial scale and good economic benefits have made great contributions to promoting China's economic progress, and Lenovo Group is currently the leader in this field in China. With the integration of the world economy, Lenovo Group is facing the competitive challenges in both domestic and international markets. Especially in today's information age and modern management science age, the behavior of enterprise managers always involves strategic issues. As a new management method, strategic management has injected new vitality into enterprises, and strategic management accounting came into being. Strategic management accounting is a new type of accounting that serves comparison, selection and strategic decision-making. It is the extension and infiltration of management accounting in the field of strategic management. It can obtain the information of the enterprise itself, the external market and competitors in a special way, and help the management of the enterprise to implement strategic planning to gain competitive advantage through analysis, comparison and selection. It is an effective means for the enterprise to make strategic decisions. The formation and development of strategic management accounting is the inevitable result of modern market economy and competition, and the inevitable requirement of establishing and perfecting modern cost management system, which makes management accounting enter a new development stage. It is necessary to implement strategic management accounting in order to make the enterprise develop in a virtuous circle.
In 2005, Lenovo successfully acquired IBM's PC division, and Lenovo's internationalization took a solid step. On the basis of strategic performance management and M&A theory. A theory, analyzing the case of Lenovo's acquisition of IBM, aims to analyze its merger and acquisition; IT also thinks that it provides an enlightening enterprise development idea for future IT enterprises.
Keywords strategic cost association, IBM acquisition theory
catalogue
First, the basic theory of strategic cost management 1
(A) related concepts of strategic cost management 2
(B) the main methods of strategic cost management 3
Second, the general analysis of Lenovo Group's strategic cost management 4
(A) Strategic cost management objective 3
(B) Lenovo Group strategic cost management status 3
Third, the application of strategic cost management-taking Lenovo's acquisition of IBM 4 as an example
(a) Background of the case 4
(B) M&A process and motivation 5
(C) Lenovo's acquisition of IBM strategic cost analysis 6
Four, Lenovo's acquisition of IBM case enlightenment 7
(A) a reasonable choice of target enterprises 7
(B) the complementary advantages of M&A 8
(3) Strict M&A Plan 8
Reference 9
First, the basic theory of strategic cost management
(A) related concepts of strategic cost management
1. Strategy
The concept of enterprise strategy appeared in the middle and late 20th century, and developed with the industrial revolution and economic globalization. It is a necessary condition for enterprises to formulate and achieve strategic development goals, and it can provide basic guarantee for enterprises to achieve strategic goals, which has important guiding value and role. Strategic management in economics refers to the long-term development plan made by enterprises after comprehensive evaluation of the external environment by using their own advantages, resources and capabilities. This kind of plan is led by the overall and systematic business model, and the ultimate management goal is to realize the strategic goal of the enterprise, and the management activities are carried out according to the actual situation and development needs of the enterprise. It is not an empty thing, but a key decision that directly affects the profitability and sustainable development ability of enterprises, and has an important guiding role in maintaining the long-term competitiveness of enterprises.
2. Strategic cost management
Strategic cost management mainly includes two key contents: first, it is necessary to analyze and select the most suitable strategy from the perspective of cost, and constantly adjust and improve the strategic cost management model in practice; Secondly, according to the enterprise strategy formed above, deploy enterprise cost management system, methods and measures to improve the effectiveness of cost management and the actual profit of enterprises.
3. Strategic cost management methods
In modern enterprises, the realization of strategic cost management objectives is generally divided into three stages, namely, functional strategy, competitive strategy and overall strategy. Functional strategy refers to the strategic objectives of all departments of an enterprise, mainly the means and methods adopted by all departments to achieve higher-level strategic objectives. Competitive strategy refers to the company's specific business strategy, which is the concrete expression of the overall goal of the enterprise, including the enterprise goal, the specific measures to implement the overall strategy and the ultimate development direction of the enterprise. The overall strategy mainly refers to the top-level strategy of the enterprise, which is the overall development plan formulated according to the competitive strategy of the enterprise.
Under normal circumstances, an enterprise's strategic cost management is to formulate its overall strategic plan first, then decompose it into specific links, determine the position suitable for enterprise development according to the actual situation and environment of the enterprise, establish favorable and long-term competitive advantages, and formulate specific implementation strategies. Finally, these implementation measures are decomposed into specific departments, requiring each department to formulate its own functional strategy according to the measures, thus promoting the implementation and perfection of the overall strategy of the enterprise. With the continuous improvement of internal management mechanism and the increase of market competition pressure, enterprises begin to look for more competitive development strategies and constantly adjust and optimize strategic cost management methods. At present, the common competition implementation strategies are: cost leading strategy, target agglomeration strategy and product differentiation strategy.
(B) the main methods of strategic cost management
1. Strategic positioning analysis
Strategic positioning analysis is to analyze the internal and external environmental factors of enterprises by various methods, and choose the most suitable competitive strategy according to the industry characteristics and their own characteristics, so that enterprises can gain the greatest advantage in the competition. In reality, strategic positioning is the basis for enterprises to maintain long-term combat effectiveness. Correct strategic positioning can help enterprises to remain invincible in the competitive market, but wrong and inappropriate strategic positioning may cause fatal threats to enterprises and make them gradually fail. Therefore, how to use the strategic positioning analysis method to choose the most suitable strategic positioning for enterprise development is an essential link for China enterprises to make strategic cost management plans.
2. Value chain analysis
The internal value chain is mainly composed of activities, so the analysis of the internal value chain of an enterprise also needs to start with activities, divide the internal value chain into various activities in a unified way, and then rank the activities in order of importance according to the strategic objectives determined in advance, so as to invest more funds in activities with higher importance; At the same time, eliminate those non-value-added businesses, minimize enterprise costs and improve enterprise profits. Taking Xiaomi Company as an example, new product research and development, industrial chain expansion and new media mode are all value-added operations, while rework, return and maintenance are all non-value-added operations. The necessary way to reduce and optimize the value chain appropriately is to learn to eliminate non-value-added services.
Usually, the external value chain analysis of an enterprise includes the value chain analysis of the industry in which the enterprise is located and the value chain analysis of competitors. The industry value chain mainly analyzes the external vertical value chain of enterprises. In this value chain, enterprises are a single whole, raw material suppliers are upstream enterprises and consumers are downstream enterprises. Taking this as an example, the upstream and downstream enterprises related to all aspects of the enterprise from production to sales are added to this chain. According to their position in this value chain, enterprises analyze their relationship with upstream and downstream enterprises, and explore what strategies should be adopted to strengthen ties with different upstream and downstream enterprises to achieve the ultimate goal of win-win. For example, establish a long-term cooperative relationship with suppliers, understand the cost requirements of suppliers, and establish a trading relationship with suppliers in combination with their own products; Together with consumers, increase the frequency and depth of communication, understand the real needs of consumers, and produce or sell products that satisfy consumers. Only according to this idea, from the perspective of upstream and downstream enterprises, can we formulate appropriate value chain relationships to enhance the competitive advantage of enterprises themselves.
3. Cost driver analysis
Cost driver refers to the root cause of cost. If enterprises want to control the cost of products or activities, they must find the cost drivers and control the cost of enterprises from the root. Generally speaking, cost drivers are divided into structural cost drivers and executive cost drivers. Analyzing the cost drivers of these two levels is helpful for the management of enterprises to fully grasp the dynamic changes of costs and effectively manage and control costs. Structural cost drivers mainly refer to the cost drivers that affect the changes in the basic economic structure of enterprises and determine the dynamic trend of costs. The formation process is longer than the execution cost driver, but once it is formed, it is difficult to change. At the same time, these cost drivers are usually generated and determined before the enterprise carries out specific production and operation activities, such as the cost drivers related to product order quantity and raw material purchase quantity. Execution cost drivers mainly refer to various cost factors related to the execution process of enterprise activities. It usually appears after the structural cost driver, and its impact on the cost varies from enterprise to enterprise. The strategic cost management of modern enterprises is usually to understand the cost drivers of different activities through the analysis of the implementation cost drivers after determining the basic economic structure, and then optimize and reorganize all the implementation cost drivers to promote the best cost effect of the value chain at all levels of the enterprise. Generally speaking, the executive cost drivers of modern enterprises include the relationship between production capacity utilization, employee participation, total quality management and value activities.
Second, the general analysis of Lenovo Group's strategic cost management
(A) the objectives of strategic cost management
1. Determine the accurate market positioning and development direction.
The most basic principle of strategic cost management is to determine the competitive advantage of enterprises. By analyzing the business items and scope of an enterprise, we can understand the development opportunities and threats of the industry in which the enterprise is located, find the best competitive advantage in the process of implementing strategic cost management, and guide the enterprise to develop in the direction of sustainable development, with the ultimate goal of obtaining long-term benefits and maintaining long-term competitiveness. Taking Lenovo Group as an example, the enterprise analysis method determines the strategic positioning of the enterprise, especially according to the current market development, weighs the risks existing in the current cost, and determines the strategic development direction for the purpose of achieving higher returns. Only in this way can Xiaomi maintain its competitive advantage in the same industry competition.
2. Establish long-term supplier cooperation.
Lenovo applies the strategic cost management system to reorganize and select existing suppliers, establish relevant supplier evaluation standards, and find supplier partners who can maintain long-term cooperative relations, so as to optimize and improve product quality and achieve the purpose of reducing costs. Only by establishing a long-term and mutually beneficial cooperative relationship with suppliers can we effectively enhance the initiative and enthusiasm of suppliers to participate in enterprise development and solve existing problems, and can we better promote cooperation between the two sides.
(B) Lenovo Group strategic cost management status
1. Cost composition
At present, the cost of Lenovo Group is mainly divided into four parts: R&D cost, production cost, sales cost and other costs. Among them, the cost of sales includes all the costs of product sales, such as the salary of sales staff, the rental fee of the place of origin, and the advertising fee. R&D costs include prototype costs, R&D personnel salaries, R&D expenses, etc. Production cost mainly refers to the cost given to processing enterprises and the cost of producing and processing a product; Other expenses include interpersonal communication expenses and office expenses incurred by Lenovo Group during its operation. Among them, because Lenovo Group is basically outsourcing production, its production cost is difficult to calculate, mainly including material cost, processing cost and other indirect costs. First, the material cost is mainly all the raw materials provided by Lenovo Group to the foundry, and its calculation method is based on the actual amount of materials consumed * (the purchase price of a single product+the processing price of a single product). Therefore, the management of material cost needs to be controlled from two aspects. On the one hand, it is necessary to negotiate with processing enterprises to control the consumption of raw materials for processed products, on the other hand, it is necessary to raise the price of purchased raw materials. Secondly, the processing cost mainly refers to the labor cost paid by the enterprise to the agent processing factory, which is mainly used to pay the wages and utilities of the employees responsible for PC processing, of which direct labor cost and direct machine cost account for the largest proportion. Therefore, the management of processing cost is basically the control of the labor and machine production efficiency of the agent processing factory, which can reduce the processing cost of PC and enhance the competitive advantage of enterprises by improving the production efficiency. Third, other indirect costs mainly refer to the costs of communication between Lenovo and processing plants and warehouses in various regions, including warehouse depreciation, travel expenses, freight and depreciation of fixed assets. These indirect costs will basically be directly allocated to the cost of each product at the end of the month.
2. Cost management system
Previously, the cost control measures taken by the company were very simple. The first step is to make a financial budget by the financial department in combination with previous years, and work out the operating expenses, planned tasks and target costs of various departments according to the overall financial budget; Step 2, each department makes its own cost management plan according to the budget of the financial department; Step 3: Each department submits the cost management plan to the Finance Department, and the Finance Department calculates, summarizes and records the cost plans of each department. At the end of the year, if the cost management task is completed as planned, the company will reward the department, and if it is not completed, it will be punished accordingly.
However, due to the increasingly fierce competition in domestic PC computers in recent years, Lenovo has constantly adjusted and improved its internal cost management system and formulated its own cost accounting and budget system to ensure the rationality and effectiveness of various costs and capital consumption of enterprises. At the same time, enterprises refer to the characteristics of enterprise accounting standards and their own cost control objects, and divide enterprise costs into R&D costs, production costs, sales costs and other costs, and re-divide the costs involved in manufacturing and carefully account for different costs. In addition, according to the changes of PC market at home and abroad, enterprises have formulated a cost budget system to reconfigure existing resources and achieve the goal of maximizing economic benefits of enterprises.
Third, the application of strategic cost management-taking Lenovo's acquisition of IBM as an example
(1) Background of the case
In 1980s, with the disintegration of planned economy in China and the deepening of reform and opening-up policy, it brought many opportunities to enterprises and individuals in China. 1In 984, Institute of Computer Science of Chinese Academy of Sciences invested 200,000 technicians +0 1 to establish Lenovo, which is a multinational enterprise group with diversified information industry. Legend is translated into legend. Lenovo is a large enterprise group with diversified development of information industry. Focusing on the R&D, production and sales of personal computer business, it has successively expanded to mobile business, enterprise business and cloud service business, forming four relatively independent business groups. Its leading products are desktop computers, servers, personal computers, smart phones, printers, tablets and other commodities. Lenovo Group is currently the fourth largest PC manufacturer and the third largest smartphone manufacturer in the world, headquartered in Beijing, China and new york, USA, with more than 27,000 employees worldwide. Its R&D centers are located in Beijing, Shenzhen, Xiamen, Chengdu and Shanghai in China, Tokyo in Japan and Raleigh in North Carolina in the United States, and its products are exported to Europe, America, Asia-Pacific and other regions.
In 2003, Lenovo enterprises began to consider the possibility of internationalization, and M&A is a quick and relatively less risky way. On February 8, 2004, at 65438, Lenovo Chairman Liu Chuanzhi solemnly announced the formal acquisition of IBM's global PC business. This brings opportunities to Lenovo, but also makes it have to face some challenges. The acquisition of IBM's personal computer business has enabled Lenovo to acquire corresponding brands, sales channels, talents and patented technology, which has achieved a qualitative leap in the process of internationalization and promoted the development of the same industry in China. However, this acquisition has also brought some problems to Lenovo, such as the distrust of the original IBM customers to Lenovo, which led to Lenovo losing some orders after the merger, the integration of corporate culture and human resources. In addition, the money spent on M&A has brought great pressure on Lenovo's cash flow, and Lenovo's profits have also declined in different degrees in the following years. In fiscal year 2008-2009, the company lost 226 million US dollars, its profit decreased by 95% year-on-year, and its net profit was-1.5%. Stimulated by performance, Lenovo's share price fell by 25.969% after the resumption of trading on June 8, 2009. This forced Lenovo to lay off 2,500 people. In response to this crisis, Lenovo has adjusted its internationalization path, which will make Lenovo's internationalization path smoother in the future. In 20 14 years, Lenovo's computer sales were still ahead of other brands, ranking first in the world.