...C A S E S T U D Y 9 LENOVO’S BRAND BUILDING STRATEGIE: TAKING THE COMPETITION TO COMPETITORS WITH “TRANSACTIONAL MODEL” Agenda • Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging • Key Challenges of Lenovo from the case • RecommendaKons Agenda • Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging • Key Challenges of Lenovo from the case • RecommendaKons Overview of Global PC Industry Global PC Industry • Since early 1980s, PC industry has been the most dynamic electronic industry sector • The global PC industry reached mature level by mid-‐1990s • Dell and Gateway starts their build-‐to-‐order strategies, resulted to the total supply chain respond swiTly to change • Emerge of e-‐commerce (online sales) hastened PC industry’s clock speed Overview of Global PC Industry • PC-‐makers enjoys high profits ...
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...S E S T U DY 9 LENOVO’S BRAND BUILDING STRATEGIE: TAKING THE COMPETITION TO COMPETITORS WITH “TRANSACTIONAL MODEL” Agenda • Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging • Key Challenges of Lenovo from the case • Recommendations Agenda • Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging • Key Challenges of Lenovo from the case • Recommendations Overview of Global PC Industry Overview of Global PC Industry • Since early 1980s, PC industry has been the most dynamic electronic industry sector • The global PC industry reached mature level by mid-1990s • Dell and Gateway starts their build-to-order strategies, resulted to the total supply chain respond swiftly to change • Emerge of e-commerce (online sales) hastened PC industry’s clock speed Overview of Global PC Industry • PC-makers enjoys high profits 1990, however, they experiences an extreme downfall in early of 2000 • In 2004, in order to maintain PC vendor’s market position, vendor consolidation can develop economies of scale in order to go into a global presence • Global PC industry currently affected by two major trends; commoditization which is about mass-produced and the absence of mid-market, which separate to the customers that demand cheapest products and that of exclusive products Agenda • Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging ...
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...19, 2006 JOHN QUELCH CARIN-ISABEL KNOOP Lenovo: Building a Global Brand The brand essence of Lenovo is innovation that makes a difference to customers. Branding is not a marketing issue for us, it is a business issue. We have to deliver on products and services.1 — Deepak Advani, Chief Marketing Officer Announced in December 2004, the $1.75 billion acquisition of IBM’s personal computer (PC) division by 20-year-old Lenovo, China’s largest PC maker, made headlines around the world. A relative upstart in the business, founded with $25,000 of seed capital from the Chinese Academy of Sciences, Lenovo was acquiring the IBM division that invented the PC in 1981. While Lenovo was arguably the best known brand in China and had some brand presence in Asia, it was virtually unknown to the rest of the world. In 2004, over 90% of Lenovo’s revenues came from China (see Exhibit 1 for financials).2 But with this major deal, Lenovo aimed to become a global technology giant. Annual revenues would triple to $12 billion, making Lenovo the third-largest PC maker in the world after Dell and Hewlett-Packard. As a new multinational with 20,000 employees operating in 138 countries, Lenovo needed a global marketing and branding strategy to match its new reach. This meant determining what Lenovo stood for and designing products that supported that claim. In January 2006, 13 months after the deal was announced and eight months after it closed, Lenovo was preparing for the intense limelight that would...
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...Case: “Lenovo: Building a Global Brand” Analysis Problem Statement By facing more and more intensive domestic and international competition in the PC market, Lenovo’s global market share shrank by 6.8% in the average of first and second quarter of 2005. It can be said that this result came from the fact that they don’t have a specific, unique, and competitive marketing strategy in the world other than China. If this market share drop continued, it could be obvious that Lenovo would become a loser in global PC market, which result could have been consequently estimated $205 million decrease in revenues in the end of 2005 compared to the result of 2004 (see Exhibit 1). At that time, the Lenovo’s managements decided that they acquired IBM’s personal systems division in December 2004 in order to conquer this situation and become a global leading technology company. The primary challenge for the problem in this case was how to build a global marketing and branding strategy other than China by utilizing IBM’s brand and its well-established products such as ThinkPad laptop and ThinkCentre desktop. Situation Analysis (See Exhibit 2) Costumers needs and characteristics Although there are a wide variety of customers in the world, it can be basically said that individual customers are extremely price sensitive after PC became a commodity product like cell phones. In general, young generation in developing and developed countries pursues cheaper products regardless of PCs’ specification...
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...not content to be chairman of Lenovo, the largest computer company in China with over 35 percent of the PC market. He envisioned being a worldwide leader in computers and, almost overnight, Yuanqing transformed Lenovo from a $3 billion Chinese computer company to a $13 billion global technology giant with the acquisition of IBM’s personal computing business in 2005. Now with headquarters in Beijing and Raleigh, North Carolina, he is chairman of the world’s third-largest computer company behind Dell and HP. Blending an upstart Chinese company that is much smaller than the American business icon (IBM) it acquired has been a challenge. Yang realized the need for Western management skills to help run the company and hired William Amelio, former head of Dell’s Asian markets, as president and CEO. The two have a complex managing relationship with Yang focusing on marketing and distribution while Amelio concentrates on supply chain, a critical area as it targets new markets, including the United States. The company believes its success in China can be replicated around the world. As Yang states, “We want to extend the business model that was so successful in China out across the world.” Its home market represents its most profitable market, not unlike many other companies with worldwide operations. However, Lenovo’s strong position in China is under attack by competitors. Over the past several years, Dell has invested $16 billion in China, building factories and creating an efficient...
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...sold by recognized global companies. Acer struggled growing its business in the American market. To address this issue Acer spun off its manufacturing operations to transform from a global PC manufacturer to a marketing and services powerhouse by producing products faster, cheaper and more efficiently. The most effective way for Acer to grow was to engage in expanding its operations, marketing and selling activities to another market. In this case Acer decided to take the company globally and begin building a solid market in China. It's believed that if China becomes the company's "home" market, Acer will capture critical economies of scale that will allow it to develop innovative new products that will succeed in China as well as the rest of the world. Acer's chief technology officer, believes that Acer's knowledge of China's market will help the company achieve its growth and market share objectives. Acer implemented initiatives that placed them in a better position than Lenovo. At first Acer was suffering from poor brand recognition. Consumers were concerned about the quality and the reliability of its products. One of the ways that Acer overcame this obstacle was acquiring Gateway which created a path for Lenovo to their entry barriers for the U.S. marketplace. Also by Acer entering into the Chinese market, they sought to take advantage of cheaper labor, economies of scale, and the availability of highly paid engineers. In comparison, Acer and Lenovo relied on acquiring...
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...Product and Brand Management “Lenovo: Building a Global Brand” 1 What should Lenovo’s overall corporate brand positioning and corporate branding strategy be in global markets? Why is developing a global corporate brand important to Lenovo? The needs to be an international company: To survive and succeed in the global business environment, Lenovo has no choice but to become an international firm in the PC business. In the Lenovo’s financial report we can observe the big differences between fiscal year 2005 and projected 2006’s taxes requirement of 35 million US dollars to projected taxes of 632 US million dollars. With China joined the WTO, Lenovo surely would lose its advantage of government intervention (tariff or other restriction of other PC companies, ex. HP, IBM) to ensure its market share and profitability in Chinese Market. Lenovo’s market share of 30% in 2001 was number one in the Chinese market, but Dell computer, upstarts, as well as PC clones also posted strong challenges to its leading market share. To grow the company, Lenovo would have to expand to the worldwide market that it didn’t have. With the acquisition of IBM PC division announced in December 2004 gave Lenovo a great opportunity to expand its territory outside Asia. To leverage this great acquisition, Lenovo needed to establish itself as an international company that could convert itself from a PC brand was little known globally to a company that not only can succeed in innovation to carry the legendary...
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...Introduction Lenovo was founded in 1984 as one of the institute-sponsored companies in Beijing. It started as the New Technology Development Company (NTD Co.) of the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) and considered a pioneer of Chinese market reform in the science and technology sectors. The company’s first technological innovation, a Chinese-language add-on card, was stemmed from ICT researcher Ni Guangnan. The name of the add-on card- Lianxiang- remains the Chinese name of Lenovo to this day. The company expands in Hong Kong that allowed them to raise its capital and overcome Lenovo’s previous experience in the global IT industry with a more international partner. In 1988, the company was restructured into Legend Computer Group Co. In the early 1990’s, the company was the largest among several domestic PC makers. In 1992, as the tariffs on imported PCs in China were reduced and import quotas were eliminated, foreign PC makers had a distinct price advantage over Legend. Consequently, Legend became sales and distributive representatives of American and Japanese computer companies in China. However, this became very strategic for Legend as it developed both technical and management expertise from its Hong Kong operation and from its foreign partners such as HP. Legend gain an advantage in building extensive distribution channels when the Chinese government restricted establishing distribution and retail operations of foreign companies...
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...MKT 533 Branding Strategy Cases Dr. Diane Badame Fall 2015 The price of this reader reflects a 20% discount on production costs, due to the early submittal of material by the instructor. Dear Student: Reproduction of copyrighted material, without prior permission of the copyright owner, particularly in an educational setting, is an issue of concern for the academic community. Unfortunately, the impropriety of much unauthorized copying is all too often overlooked by users in an educational setting. Although copying all or part of a work without obtaining permission may appear to be an easy and convenient solution to an immediate problem, such unauthorized copying can frequently violate the rights of the author or publisher of the copyrighted work, and be directly contrary to the academic mission to teach respect for ideas and the intellectual property that expresses those ideas. With that in mind, the University Bookstore has sought permission and paid royalties for all materials enclosed. The price of your reader reflects those necessary costs. This material comes from "Questions and Answers on Copyright for the Campus Community," Copyright 1993 by National Association of College Stores, Inc. and the Association of American Publishers. MKT 533 – Branding Strategy Dr. Badame, Fall 2015 UNIVERSITY OF SOUTHERN CALIFORNIA MARSHALL GRADUATE SCHOOL OF BUSINESS MKT 533 – BRANDING STRATEGY 1.5 CREDIT COURSE FALL 2015 ___________________...
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...Competitors？ 1. Introduction Lenovo is the largest personal computer company in the world and serves customers covering over 160 countries (Lenovo, 2014). In the global computer industries, three products of Lenovo have occupied the first three positions of market share (Chu, n. d.). From 2010 to 2014, the revenue of Lenovo is keeping increasing in a steady trend and the EBITDA revenue in 2014 has reached more than US$ 1365 billion (see figure below). + financial situation +competitor (benchmark) The current success will contribute to its strategic management and strong strategic execution as well. This report will give a full and deep analysis about its strategic management. Firstly, a current situation about the strategic analysis, strategic directions and objectives will be introduced in the beginning part of the report. The key broad business-level and international strategies of the company will be presented in the following. The detail strategic implementation of chosen strategy will be explained as a further analysis with McKinsey 7s model and BCG matrix. Based on the strategic analysis, the key issues during the process of strategic implementation and the specific evaluation will be assessed from the angle of the consultant through some related theories of the balanced score. Some conclusion and recommendations will be provided according to the analysis of the current strategic situation of Lenovo. [pic] [pic]2. Strategic analysis 2.1 External...
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...FULL NAME : LINH PHUONG TRAN STUDENT ID : BH12027 UOG ID : 000792235 MODULE CODE : BUSI1317 MODULE TUTOR : HA NGUYEN MODULE NAME : STRATEGIC MANAGEMENT COURSE : BA ( HON) BUSINESS MANAGEMENT INTAKE : MARCH 2013 TITLE : LENOVO EAST MEETS WEST OUTLINE TABLE CONTENTS I. INTRODUCTION 4 II. LENOVO HISTORY AND VISION STATEMENT 4 III. LENOVO SWOT ANALYSIS 6 1. External factors (O- opportunity and T-threat) 6 2. Internal factors ( S- strength and W-weakness) 9 IV. LENOVO STRATEGIC CHOICES 13 V. CONCLUSION AND RECOMMENDATION 14 List of figure Figure | Name | page | 1 | The Lenovo history timeline | 4 | 2 | Lenovo vision statement | 5 | 3 | Porter’s Diamond model | 6 | 4 | Lenovo Porter’s Diamond model | 7 | 5 | Strength in Lenovo’s structure | 10 | 6 | Lenovo CAGE framework | 11 | 7 | Lenovo strategic implementation | 13 | 8 | strategic triangle | 14 | I. INTRODUCTION Thomas L.Friedman reminded to the term "Flat world" as the way to describe to an era of new World economy. Which including the globalization, intense competition, a big market without borders, the variety and combination of cultures in the World (Thomas L. Friedman, 2005; Victor K. Fung, el, at 2007; Ronald Aronica and Mtetwa Ramdoo, 2006). In fact, The change, updates, innovation and competition in technology industry are taking a level higher, because it happening every days, every hours (Jeffrey T. Macher, David C. Mowery; 2004). Factors...
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...of Lenovo Group Wang, Wen Cheng, Dept. of Business Management, Hwa Hsia Institute of Technology, Taiwan Chu, Ying Chien, Department of Tourism and Leisure, National Penghu University,Taiwan Chen, Ying Chang, Department of Hotel and Restaurant Management, Ching Kuo Institute of Management and Health ABSTRACT In recent years, market competition in the market economy is fierce, the different economic performances and behaviors based on the enterprises’ own interests, to enhance their own economic strength and to achieve the exclusion of similar economic agents. Competition in the IT market is to drive their own material interests, because of the inherent dynamic of all economic actors, as well as the loss of their material interests are similar in the market by crowding out of economic actors. But How a newly established global brand build its brand awareness and be a successful global brand become a critical issue. 2005, Lenovo PC merge IBM computer and become the No.3 computer company in the world. As for Lenovo Group, in order to achieve success in the fierce competition of the products market it needs effective marketing strategy to attain profit and improve its development in Chinese IT market. The Lenovo Group operating activities are often completed through marketing products, producing, research, marketing portfolio. The Lenovo Group product and the quality of products constrain the results of pricing, promotion, and marketing. Therefore, the Lenovo Group...
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...LITERATURE REVIEW WHAT IS A BRAND? Branding is a discipline that has emerged from the consumer goods domain particularly fast moving consumer goods. Historically, brand has been inextricably linked to the product and branding is seen as the process of adding value to the product. A brand is a cluster of functional and emotional benefits that extend a unique and welcomed promise. This conceptualisation of a brand is universal and applies to various domains including FMCG, internet services and B2B. What changes in every context is the enactment of the brand. It is argued that the concept of a brand is universal, however some adjustments are required in line with the specific context applied; in this case the B2B context. Branding has myopically been viewed by business marketers as largely irrelevant to business markets. Associated mostly with emotional value, branding was believed to offer very little to what is traditionally considered a very rational process i.e. the organisational decision making process. More recent research acknowledges that despite the differences between B2C and B2B contexts both B2C and B2B brands need to engender trust and develop both cognitive and affective ties with stakeholders. THE BENEFITS OF BRANDING IN INDUSTRIAL MARKETS Branding in an industrial market must be perceived to convey benefits to various stakeholders for companies to financially invest in it. With regard to the company investing in branding a number of benefits have been identified...
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...sold under its own brand name. Acer also produced equipment on an original equipment manufacturer (OEM) basis for well-known global companies such as IBM, Dell, and Hitachi. As company founder, chairman, and CEO, Stan Shih built Acer Inc. into one of Taiwan’s most successful companies. Despite Acer’s success, the company had trouble breaking into the American market. Between 1995 and 1997, Acer’s U.S. market share dropped from 15 to 5 percent. In the late 1990s, Shih noted, “In the United States and Europe, we are relatively weak. The local players there are very strong. The problem is that we don’t have good experience in marketing in those regions. It’s a people issue, not a product issue.” Shih has discovered that building brands in the business-to-business market is easier than building brands in the business-to-consumer market. “Business-to-consumer brands have more value but also face more challenges. People involved in business-to-business are usually rational, but consumers in business-to-consumer are usually emotional in choosing their brands,” he says. In 2000, in a major restructuring, Acer spun off its manufacturing operations. The reason: Shih wanted to transform Acer from a top 10 global PC manufacturer into a “marketing and services powerhouse.” Shih also refocused Acer’s distribution and marketing on the vast, fast-growing China market. Acer and other key Source: Dan Hartung/Getty Images. ISBN 0-558-55519-5 Global Marketing, Sixth...
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...Analysis of Lenovo Group Wang, Wen Cheng, Dept. of Business Management, Hwa Hsia Institute of Technology, Taiwan Chu, Ying Chien, Department of Tourism and Leisure, National Penghu University,Taiwan Chen, Ying Chang, Department of Hotel and Restaurant Management, Ching Kuo Institute of Management and Health ABSTRACT In recent years, market competition in the market economy is fierce, the different economic performances and behaviors based on the enterprises’ own interests, to enhance their own economic strength and to achieve the exclusion of similar economic agents. Competition in the IT market is to drive their own material interests, because of the inherent dynamic of all economic actors, as well as the loss of their material interests are similar in the market by crowding out of economic actors. But How a newly established global brand build its brand awareness and be a successful global brand become a critical issue. 2005, Lenovo PC merge IBM computer and become the No.3 computer company in the world. As for Lenovo Group, in order to achieve success in the fierce competition of the products market it needs effective marketing strategy to attain profit and improve its development in Chinese IT market. The Lenovo Group operating activities are often completed through marketing products, producing, research, marketing portfolio. The Lenovo Group product and the quality of products constrain the results of pricing, promotion, and marketing. Therefore, the Lenovo Group managers’...
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