...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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...RA G PC+ E IN E RM TH FO OR NS O F RA OV T N LE ual Ann 3 2 /1 2 2 01 Code 99 ck Sto o nov t Le or Rep ited Lim up Gro ov rso NV L e n R : L ion pe any – to l ( A D 34 bil comp o PC ted $ dica siness g y p t w and e US nolo to bu s. D ld h ng t e c o f t h e he wor P l u s untrie novo’s d stro e o n M t o n e ers in n g P C 160 c vices, L chain a rmer IB d i mak m e r g re than rnet de supply f the fo ures an s e t o ct te lobal o an ufac odu ition ile in nm rs i d mob ficient g acquis s, man logy pr ercial e ’s tom an mm no -ef op s, cus d PCs highly Group devel e tech ed co tation d s o ng ere a y s i n, Lenov an -to-u -bran work serv gine mp atio y k , er – ally en t innov ed by the Co nd eas ry Thin ervers a lead ption oduc Form ion, da l as s en r ure e . exc ilt on p cution g Divis ty, sec ude leg as wel e l e l u in quali inc obi Cs, is b egic ex mput ho t ig ct lines mer P y o f m ding stra onal C able, h odu u mil inclu s. i ons r s Per ets rel . Its p ded c d a f a evices, phone e s k n rt n a n net d mar service ea-bra ortu sma r Id inte ts and lobal F major d an and g e tabl vo, a ny, has mato, PCs eno ompa rs in Ya ghai L c te an 500 rch cen ng, Sh a; and in ea Beiji . res n; lina , Ch pa enzhen h Caro Ja Sh ort and igh, N e Ral O NOV 2 ) LE 9 OUT K S E : 9 i s a B A ) H o ( nal GY N ENT REHE P EM TAT COM E S OF T OM ITY INC EMEN HEET QU TED STAT CE S ENT S IN E DA D LI AN TEM NGE SO IDATE BAL STA A ON D OW OF CH NTS 2 C NSOL IDATE T FL 11 CO E OL...
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...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 • Key Challenges of Lenovo from the case • Recommendations About Lenovo: From Emerging to Surging 1984 Established...
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...Executing a global growth strategy at Lenovo For the analysis of the process of globalization has been chosen Lenovo, currently classified at 370 in the ranking of Fortune Global 500. It came into existence in 2005 when Legend Holdings acquired the former Personal Computer Division of IBM, the company that invented the PC industry in 1981. Today, Lenovo is a $21 billion personal technology company and the world's second-largest PC vendor, with more than 26,000 employees serving customers in more than 160 countries The choice of this company prompted me my recent visit to one of the factories Lenovo, in Shenzhen, and a huge impression on me that this visit was exerted. This well-organized corporation attaches great importance to the planning of its development and is very determined in its objectives. Position that the company has achieved on very difficult market of personal computers proves accurate transformation strategy from local leader into a powerful global player. Lenovo's position in any part of it is not the work of chance. The following sections concentrate on the discussion of Lenovo’s core competence and its globalisation strategy. Lenovo was originally called Legend Beijing, and was founded in 1984 by Liu Chuanzhi along with ten colleagues at the Computer Technology Institute of the Chinese Academy of Sciences (CAS). With an initial investment of 200,000 Yuan, the company was established with the aim of commercializing the research and development activities...
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...shows the relative growth of FDI compared to international trade and GDP growth. The sharp downturn in the late 1990s is due, in large part, to the Asian financial crisis of 1997. Lenovo to Acquire IBM Personal Computing Division Creating New Leading PC Business with Global Market Reach - Creates world's third-largest PC business with approximately US$12 billion annual revenue for 2003 - Global business with worldwide reach, powerful brand name, balanced product offerings and leading R&D capabilities - Long-term strategic alliances between Lenovo and IBM in PC sales, service and financing worldwide - Worldwide headquarters in New York; principal operations in Beijing and Raleigh, North Carolina - Transaction of US$1.25 billion in cash, equity; total transaction consideration of approximately US$1.75 billion - IBM to take 18.9 percent equity stake in Lenovo; transaction expected to be completed in second quarter 2005 Lenovo Group Limited, the leading Personal Computer brand in China and across Asia, and IBM today announced a definitive agreement under which Lenovo will acquire IBM's Personal Computing Division to form the world's third-largest PC business, bringing IBM's leading enterprise-class PC technologies to the consumer market and giving Lenovo global market reach beyond China and Asia. Lenovo will have combined annual PC revenue of approximately US$12 billion and volume of 11.9 million units, based on 2003 business results - a fourfold increase in Lenovo's current PC...
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...| 4. Place | 3 | 5. Promotion | 3 | 6. Conclusion | 4 | Background of Lenovo Lenovo is a Chinese multinational computer technology company that was founded at 1 November of 1984 and was also approved by the Chinese government on that day. The headquarters of Lenovo Group Ltd was located in Beijing, China, and Morrisville, North Carolina, United States. Lenovo’s first major success was developing a circuit board that would allow IBM-compatible personal computers to process Chinese characters after several of failed plans. Reason of the failure was because they were compounded by the fact that its staff had little business experience. After keep on improving , Lenovo company eventually managed to manufacture and market computers using its own brand name on 1990.Since then , Lenovo had develop magnificently and also was listed in Hong Kong was incensement of nearly US$30 million on year 1994. Because of its good management, strong brand recognition, and growth potential , Lenovo’s stock market had been keep on raising until many analysts were optimistic about Lenovo. Lenovo issued a secondary offering of 50 million shares on the Hong Kong market in March 2000 to fund its continued growth and it was raised up to US$212 million. In year 2015, Lenovo Group Ltd had now become one of the most improved and famous computer technologies in this world. Product of Lenovo Lenovo expanded in a far-reaching way in 2005 through its obtainment of IBM's PC business, including...
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...The Globalization and IHRM of Lenovo ⅠIntroduction Lenovo Group Limited is a Chinese multinational personal technology company that develops, manufactures and markets desktop and notebook computers, workstations, servers, storage drives, IT management software, and other related products and services. Lenovo was incorporated in Hong Kong in 1988 under its previous name, Legend.[1] Lenovo's principal operations are located in Morrisville, North Carolina, Beijing, China and Singapore. (Global Headquarters : The United States Raleigh ( North Carolina Research Triangle Park ) (The main R & D centers: Beijing, China, Japan and Japan, Shanghai, Shenzhen and the United States, North Carolina, Raleigh (Production base and assembly facilities: Beijing, Shanghai, Huiyang and Shenzhen; India's Pontiac Lee (Pondicherry,); Monterrey, Mexico (Monterrey,); the United States Greensboro (in Greensboro); and in the global contract manufacturing and OEM Lenovo is the world's second largest PC maker and markets the ThinkPad line of notebook PCs and ThinkCentre line of desktops. These brands became part of Lenovo's offerings after its 2005 acquisition of IBM's personal computer business. Lenovo also sells the IdeaPad line of notebook computers. Lenovo markets its products directly to consumers, small to medium size businesses, and large enterprises, as well as through online sales, company-owned stores, chain retailers, and major technology distributors and vendors. 1.Joint ventures,...
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...| Assignment Handling ServicesDivision of Information ServicesNathan CampusGRIFFITH UNIVERSITY QLD 4111 | ASSIGNMENT COVER SHEET | DATE RECEIVED: Postmark: DATE RECEIVED: Postmark: Please complete all sections below Course Code: 3033IBA Course Name: Managing People in Global Economy Due Date: 27/04/2015 Assessment Item #: 3 Enrolment: Off Campus On Campus Campus (Enrolled) Nathan GC Logan Mt G SB Course Tutor: Dr Anne Christie Course Convenor: Dr Anne Christie Please provide your STUDENT NUMBER: s2681179 Student Name: Joshua Grima ACADEMIC INTEGRITY DECLARATION Breaches of academic integrity (cheating, plagiarism, falsification of data, collusion) seriously compromise student learning, as well as the University’s assessment of the effectiveness of that learning and the academic quality of the University’s awards. All breaches of academic integrity are taken seriously and could result in penalties including failure in the course and exclusion from the University. Students should be aware that the University uses text-matching software to safeguard the quality of student learning and that your assignment will be checked using this software. I acknowledge and agree that the examiner of this assessment item may, for the purpose of marking this assessment item: reproduce this assessment item and provide a copy to another Griffith staff member; and/ submit this assessment...
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...Lenovo Problem: Lenovo worked on the strategy to build a master brand while leveraging the ThinkPad product brand name, thereby implying an immediate challenge of maintaining the loyalty of existing customers, specifically the ThinkPad, while sustaining innovation at the same time. Moreover, the much thought out first innovation in the form of the X41 Tablet series from Lenovo after the acquisition, led to IBM being given all the credit owing to the less popularity of Lenovo. The association of Lenovo with China and the Chinese Government was a potential downside for it to compete in price competitive products with the fear of being recognized as the company from China providing cheap products. This not only had the potential to devalue the Lenovo master brand, but could also damage the premium ThinkPad brand. While a relatively low budget on worldwide marketing as compared to its competitors also proved to be a reason for its market share to that of the PC market leader being as low as 1:3. Competition: Dell was Lenovo’s greatest competitor, being the market share leader with a strong global footprint. The direct sales approach rather than the retail store distribution model led to its rapid growth in China. Similar to Dell, HP, another competitor of Lenovo, also focused on providing standardized products while maintaining a low cost and supply chain. Moreover, Apple and Sony concentrated their energies on innovation and providing premium products. Other competitors were...
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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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...RA G PC+ E IN E RM TH FO OR NS O F RA OV T N LE ual Ann 3 2 /1 2 2 01 Code 99 ck Sto o nov t Le or Rep ited Lim up Gro ov rso NV L e n R : L ion pe any – to l ( A D 34 bil comp o PC ted $ dica siness g y p t w and e US nolo to bu s. D ld h ng t e c o f t h e he wor P l u s untrie novo’s d stro e o n M t o n e ers in n g P C 160 c vices, L chain a rmer IB d i mak m e r g re than rnet de supply f the fo ures an s e t o ct te lobal o an ufac odu ition ile in nm rs i d mob ficient g acquis s, man logy pr ercial e ’s tom an mm no -ef op s, cus d PCs highly Group devel e tech ed co tation d s o ng ere a y s i n, Lenov an -to-u -bran work serv gine mp atio y k , er – ally en t innov ed by the Co nd eas ry Thin ervers a lead ption oduc Form ion, da l as s en r ure e . exc ilt on p cution g Divis ty, sec ude leg as wel e l e l u in quali inc obi Cs, is b egic ex mput ho t ig ct lines mer P y o f m ding stra onal C able, h odu u mil inclu s. i ons r s Per ets rel . Its p ded c d a f a evices, phone e s k n rt n a n net d mar service ea-bra ortu sma r Id inte ts and lobal F major d an and g e tabl vo, a ny, has mato, PCs eno ompa rs in Ya ghai L c te an 500 rch cen ng, Sh a; and in ea Beiji . res n; lina , Ch pa enzhen h Caro Ja Sh ort and igh, N e Ral O NOV 2 ) LE 9 OUT K S E : 9 i s a B A ) H o ( nal GY N ENT REHE P EM TAT COM E S OF T OM ITY INC EMEN HEET QU TED STAT CE S ENT S IN E DA D LI AN TEM NGE SO IDATE BAL STA A ON D OW OF CH NTS 2 C NSOL IDATE T FL 11 CO E OL...
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...Name Industries served Geographic areas served Headquarters Current CEO Revenue Profit Employees Hewlett-Packard Company Computer hardware and software, IT services and consulting Worldwide US Meg Whitman $ 120.357 billion (2012) $ -12.650 billion (2012) 331,800 (2012) Apple Inc., Cisco Systems, Inc., Dell Inc., Fujitsu Limited, International Business Machines Corporation, Lenovo Group Limited, Microsoft Corporation, Oracle Corporation, Samsung Electronics Co., Sony Corporation and many others. Main Competitors SWOT HP SWOT analysis 2013 Strengths 1. Strong presence in China 2. Brand reputation 3. Diversified product portfolio Weaknesses 1. Poor competency in acquisitions 2. 29% of income comes from personal systems division 3. Poor presence in tablet market Opportunities 1. Expand services and enterprise solutions divisions 2. Increasing demand of cloud based services 3. Acquisition of more technology related patents Threats 1. Retaliation by incumbent firms in software services 2. Slowing growth rate of the PC market 3. Rapid technological change Strengths 1. Strong presence in China. The economy of China has been growing at a steady more than 8% rate every year. The growing economy accelerates corporate spending and HP is well positioned to benefit from it. The company has increased its investments in the market and expanded product and service offerings, especially its enterprise business and services divisions. These divisions offer the most...
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...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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...LENOVO – The Global Challenger from an Emerging Market. Background information: Lenovo -Chinese multinational technology firm -Headquarters in Beijing, China -North Carolina, United States -Year 2011, world’s second largest personal computer vendor by unit sales after HP -operate > 160 Countries -Founded in Beijing in 1984 Lenovo is one of the largest famous personal computer makers in the world. Today, Lenovo strives to be the global market share leader in each of the market we serve. In 2005, Lenovo purchased the personal computer business and the brand “ThinkPad” famous computer IBM in the IT industry all over the world. This landmark transaction is taken as its most important stage of the international strategy in the computer industry. Also in 2011, Lenovo merged with NEC. This marks the trinity Lenovo's internationalization strategy has risen to a new stage, which indicates that Lenovo already in the United States established a brand-name image localization. Case Study: Q&A 1) What is the nature of Lenovo’s international strategy? Is the firm’s strategy primarily multidomestic or global? Lenovo uses mergers and acquisitions to gain access to required knowledge and other assets from partner firms, and to expand into markets worldwide. The merger increased Lenovo’s scale economies in manufacturing and marketing. The firm’s strategy is primarily in multidomestic. Because Lenovo’s products are standardized worldwide, but elements such as keyboard and...
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...For years, the amount of outward investment from China had been small compared to investment into China. The main reasons for this are rooted in China’s history and politics. From 1949, when the Communist regime of the People’s Republic of China began, through 1979, there was virtually no outward FDI from China. This was partially due to political obstacles, as the regime was not recognized as the official government of China by many companies until the late 1960s or early 1970s. However, the main reason was that the government promoted a policy of economic self-sufficiency. It chose to “focus on internal development and did not want to rely on imports or take risks in foreign markets” (China Goes Global pg. 2). After the 1979 reform program, the economy opened up gradually and Chinese firms were allowed to invest abroad under certain restrictions. However, the legacy of looking inward persisted throughout the 1980s and 1990s. Firms remained financially weak and outward FDI was not a government priority. There were few Chinese companies that had developed an international presence, brand, or reach. New big players in China were relatively weak, due to their lack of experience and exposure in international markets, or in market economies in general. There are many reasons why firms invest abroad. The first is to overcome trade barriers. Governments often regulate international trade to raise revenue and pursue other economic policy objectives. Moving production...
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