Lenovo, one of the successful firms of China , has been a global company. To identity the reasons and factors of success, we handled the report. Through scanning the books and references about Lenovo, we have some conclusions and opinions. With its leading-edge technology, easy to use, personalized design and wide range of solutions, the products are widely welcomed by users in China. Lenovo also has extensive product line for the Chinese market, including mobile handsets, servers,and digital products. Lenovo Group’s development is broadly divided into three stages: the first stage is the start-ups and survival stages; The second stage is to solve the problem of existence.; the third is spending huge sums on the acquisition of IBM’s PC division, and begin the development of international strategy.
Lenovo Group was established in 1984, invested 200,000 yuan by the CAS Institute of Computing, which 11 scientific and technical personnel founded. Today the company has become one of the world’s leading PC companies, combining with the former IBM Personal Computing Division. Lenovo’s fiscal year 2007/08 turnover of $ 16.4 billion. Since 1997 the sales of Lenovo in China’s domestic market topped the first, and in the Asia-pacific market in successive years (except Japan) is among the best.Lenovo group was launched in 2004.
In China, the market share of Lenovo PC products is nearly one-third. With its leading-edge technology, easy to use, personalized design and wide range of solutions, the products are widely welcomed by users in China. Lenovo also has extensive product line for the Chinese market, including mobile handsets, servers,and digital products. Lenovo Group’s development is broadly divided into three stages: the first stage is the start-ups and survival stages; The second stage is to solve the problem of existence.; the third is spending huge sums on the acquisition of IBM’s PC division, and begin the development of international strategy.
The analysis of the marketing environment
1.The macro-marketing environment:
The macro external environment for the development of the Lenovo Group has an important influence. The integration and adaptation of macroeconomic policy and social-economic environment ensures that the Lenovo Group can go better in the long-term strategic development of the road.
1.1 Political environment
Lenovo’s political background is strong like the national support. Lenovo is founded by the Chinese academy of sciences institute of computer, with all kinds of computer professionals with technical strength, known as the birthplace of Chinese computer technology.
1.2 Economic environment:
The economic environment is good. The economic crisis lead to the overall economic environment tightening, but the development of computer industry chain to maintain good growth momentum.
1.3 Social environment:
China even the whole world still has a great purchasing power. Once the enterprise enter the market, the value of the firm will show up.
1.4 Technical environment:
Lenovo Group, founded by the Institute of Computer Technology, Chinese Academy of Sciences. And it stands for the country’s highest level in the field of computer technology.
2. The micro-marketing environment:
Marketing micro environment essentially refers to the the company’s own environment and the business which is directly linked to units or individuals formed environment.
2.1 The threat of new distributors to potential industry:
New competitors entering a certain segments of the market, can add new production capacity and a lot of resources, and fight for market share. The key lies in wether the new competitors can easily enter the fine market. This is the mainly due to the economies of scale, channel construction, the expected revenge factors. 2.1.1Possible entrants: the first one is the digital giants abroad which have not yet entered the Chinese market, and the others is downstream products, suppliers and retailers. 2.1.2The way of entrants : the appearance of new products, and the establish of a new brand. 2.1.3Potential entry barriers to entrant: economy of scale, product different barriers, capital demand barriers, the customer conversion cost, patent and proprietary technology.
2.2 The competition in the industry
The product has a specific location, the user’s change to the existing brand are usually based on the disappointment. Because of the industry production capability, the computer industry is highly profitable high risk.
As China’s entry into the WTO, the competition will post the professional business enterprise the threat. 2.4 The bargaining power of suppliers Most of the PC software is provided by the supplier, and not by the manufacturer production. PC manufacturer bargaining ability, but in foreign suppliers, local brands has obvious advantages. The buyer’s bargaining power:Through the analysis, China’s PC industry has high barriers to entry so that there is no alternative goods and the purchaser bargain ability is low. For new entrants the competitive threat is various and widely effected, but due to a variety of reasons no matter at present or in future there will be still a number of entrants.
3. Lenovo’s SWOT analysis:
Combined with the present situation of the development of the industry Lenovo laptop exactly exist problems and should establish rational marketing decision-making plan.
Market share: Lenovo laptop channels throughout the whole of Asia market, market share to competitors than the other, with 30.6% of the market share comes to the first in line. Local brand experience and regional advantages: Lenovo has decades of experience in the Chinese mainland which can accurately grasp the local consumer demand, which is the strength of other brands do not have the advantage. Brand advantage: In the PC market, Lenovo brand of leadership in the Chinese market has more than many rivals, is the industry leader, and promoted step by step and accumulation.
In addition to the Chinese market and overseas market, especially the north American market the ability of growth is weak. International operation experience compared to the Dell and HP has a gap, form although international, but did not reach the system. A lack of international experience, especially to the international complex economic form ability, to the risk control ability is not strong, it is the financial crisis led to Lenovo losses. Although the acquisition of the IBM PC business, full integration is not yet complete.
The development of the consumer PC market, along with the rise of the notebook market as well as the popularity of the PC provides a good opportunity to Lenovo notebook in the consumer market. And there is a sales boom as Win7 listed the individual market. so Lenovo should seize the opportunity to capture the market. The Chinese government launch home appliance countryside sports, farmers for the PC has a strong demand. Lenovo an seize the chance to go to China’s vast countryside market.The domestic market having the rapid development , more and more consumers to buy the computer.
The consumer market, facing the threat of the Hewlett-Packard, Dell is a strong competitor. A large number of new brand computer manufacturers produce cause confusion of market.The financial crisis is still not completely eliminate and global individual market is falling which affect the Lenovo shipments greatly since commercial personal market. 4. Lenovo’s market segments, the choice of target customers, market positioning (STP analysis) 4.1 Market segment: despite Lenovo is an old computer, it seems that there is no market selection problem, but when profits to maximize the enterprise management of long-term highest goal appeared.
Lenovo will also can not bear the temptation of diversification, attack from the Internet, a series of new business, but soon found many new business water depth in waves, therefore decided to make strategic shrinkage and adjust. Later, Lenovo will and divided into two parts, one kind is small and medium-sized enterprise and the average consumer, small and medium-sized enterprise and further divided into medium customers and scattered type customers. One kind is often tender for purchasing clients, and further divided into global big customers combined with local customers, and whether the commercial market or consumption market, desktop computer or the laptop.
Lenovo’s market segmentation levels are quite clear, and in each segment the market established deputy brand. Through the in-depth market research, a series of specialized value recreation, make the brand to look brand-new.Thus, market segmentation for a brand the growing importance of the, Lenovo because timely see this, suit the remedy to the case. According to the growing small and medium-sized enterprise commercial computer demand, Lenovo won the unshakable market share. In the future a period of time, Lenovo brand value management and considerable ascension space, also can become more sales though driving force is strong.
4.2. The market localization:
Association with the main trend products and low-priced products to the aftermarket price of brand quality one-sided pressure to the other brands. Lenovo in the past ten years, has constant innovation and introduction of more advanced technology and electronic products, which are inextricably linked with Lenovo’s strong backing of the Chinese Academy of Sciences Institute of Computer Science. Lenovo has a high-quality technical team. They have a number of senior researchers and engineers with years of experience in technical strength with a large number of Hong Kong and Taiwan manufacturers.
Lenovo can not be surmounted, which proves the Chinese computer market leading brand strength is immeasurable.Lenovo chooses the low level of technology, and focus on market demand with the wide range of applications.The market is large, easy-to-commercialization of microcomputer products in the product form, from the development version upgrade start, rather than to start on the development machine. This is the Lenovo Group’s goal, so that companies can integrate into the community with the fastest speed, and lay a solid foundation for further development in the future.
Lenovo, a global company, has gone through many challenges and difficulties. There are much experience in the growth of Lenovo. Although there are many reasons of the success, the main and crucial one is persistence. We are, of crouse, proud of the admirable achievement of Lenovo.
Courtney from Study Moose
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