Lenovo Group Ltd.
Prepared by: Pu Zhao
Mei Wu
Taryn Hauso
Marty Bearce
Lenovo Group Ltd.
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Introduction
History
Globalization Analysis
Competitor Analysis
SWOT Analysis
Future Outlook
Recommendations
Introduction to Lenovo Group Ltd.
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Established in 1984, by 11 employees, with total capital
of 25,000 U.S. dollars
Changed name from Legend to Lenovo for
globalization purposes
---"For overseas markets, Lenovo will be used alone," said the firm
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Owner of IBM PC brand
The third-largest computer maker on the world scale
The dominant Chinese computer marketer for over 10
years.
Important Records of Lenovo
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1984—With an initial capital outlay of only RMB200,000, (US$25,000)
Lenovo’s founding chairman Liu Chuanzhi, together with 10 like-minded
colleagues, launches the New Technology Developer Inc. (the predecessor of
the Legend Group) funded by the Chinese Academy of Sciences.
1988—Legend’s Chinese-character card receives the highest National ScienceTechnology Progress Award in China. Legend Hong Kong is established.
1996—Legend becomes the market share leader in China for the first time.
1999—Legend becomes the top PC vendor in the Asia-Pacific region and
heads the Chinese National Top 100 Electronic Enterprises ranking.
2004—Lenovo becomes an Olympic worldwide partner. It is the first Chinese
company to become a computer technology equipment partner of the TOP.
2005—Lenovo completes the acquisition of IBM's Personal Computing
Division, making it a new international IT competitor and the third-largest
personal computer company in the world.
2006—Lenovo introduces the first dual-core ThinkPad notebook PCs,
improving productivity and extending battery life for up to 11 hours.
Globalization Strategies
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Cooperation
Merger and Acquirement
Promote Brand Awareness through involving
important sports events
Cooperation
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Main Reason:
Shortage of Oversea Sale channels and
Public Relations.
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Standards for choosing partners:
1. With Complementary strengths
2. Proper size
Merger and Acquirement
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The most important measure for most
ambitious companies is to expand its market
shares.
To form its new strengths as soon as possible.
A good sample in globalization is obtaining IBM
PC Division through M&A.
The Strategies to Promote Brand
Awareness
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TOP (The Olympic Partner )partners
photo Source: http://www.lenovo.com/torino/us/partnership.shtml
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NBA partners
AT&T partners
Challenges in Globalization
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Ability of Culture adaptation
In April 2005, a manager (Sales) of Dell Int. tried to
use unusual tactics to persuade IBM’s customers to
purchase Dell products in his mail, “every dollar they
spent on these IBM systems is directly funding the
Chinese government.”
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Brand Awareness
Competitors (main)
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Acer Inc. (Taiwan, China )
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Dell Inc. (United States)
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Hewlett-Packard (United States)
Acer
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Leading manufacturer of notebook, tablet,
handheld, desktop computers
The gap is narrowing. Acer's global market up to
6.8 percent in the fourth quarter
While Lenovo shrunk to 7.1 percent, according
to the market research company Gartner.
In third quarter of 2005, Acer had 4.7 percent
and Lenovo had 7.3 percent
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Acer's success derives from its effective use of
the "channel" marketing model, which pairs it
with local distributors to help its products gain
traction
Key Financials
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Company Type Public (Taiwan: ACER)
Fiscal Year-End December
2005 Sales (mil.) $9,654.0
1-Year Sales Growth 37.2%
2005 Net Income (mil.) $257.3
1-Year Net Income Growth 17.3%
2005 Employees 6,554
1-Year Employee Growth (0.1%)
Dell Inc.
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World's #1 direct-sale computer vendor
Provides a broad range of computer and
entertainment products for the consumer and
enterprise markets
Markets third-party software and peripherals
Key Financials
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Company Type Public (NASDAQ (GS): DELL)
Fiscal Year-End January
2006 Sales (mil.) $55,908.0
1-Year Sales Growth 13.6%
2006 Net Income (mil.) $3,572.0
1-Year Net Income Growth 17.4%
2006 Employees 66,100
1-Year Employee Growth 18.0%
Hewlett-Packard
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Provides enterprise and consumer customers a
full range of high-tech equipment
Known for product innovation, the company's
corporate development is a tale of reinvention
Boasts an IT service organization that is among
the world's largest
Key Financials
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Company Type Public (NYSE: HPQ)
Fiscal Year-End October
2006 Sales (mil.) $91,658.0
1-Year Sales Growth 5.7%
2006 Net Income (mil.) $6,198.0
1-Year Net Income Growth 158.5%
2005 Employees 150,000
1-Year Employee Growth (0.7%)
Key Financials
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Revenues
$86,696.0
Profits
2,398.0
Assets
77,317.0
Stockholders' Equity 37,176.0
8.5%
-31.4
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SWOT Analysis
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Strengths
The brand chrematistic
a. honest
b. innovative
c. good service
d. easy to use
Price advance
Environmental factors
SWOT Analysis
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Weakness
Lack of international managing experience
Brand influence
Ability of getting profit
SWOT Analysis
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Opportunities
In charge of IBM PC Division
Important sporting events
a. TOP (The Olympic Partner)
b. NBA partner
c. AT&T Williams partner
SWOT analysis
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Threats
Software pirate
Powerful competitors
Future Outlook
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From East to West
High brand awareness
One of most competitive companies in the
world.
Recommendations
Short-term ways:
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Distribution Model should be innovated to be efficient.
Existence Model: Lenovo—Wholesaler—Retailer—Consumer
Alternatives:
1. Lenovo—Discount Retailer (Wal-Mart)—Consumer.
2. Lenovo—Consumer (through Ecommerce and
Agent) .
Continue to rely on its financial advantages for R&D, struggle
for talented employees .
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Through establishing and implementing of more
rational strategies of localization and spreading its
corporation culture to avoid cultural difference and
reduce the possibility of conflicts.
Reduce the possibility of duplication of investment,
and strive for cooperation, instead of competition, and
to transfer rivals between the cooperators.
Good use merger and acquirement strategy, principle
of which is that use abundant capital to transfer its
disadvantage to become advantages in a short period.
Promotion Brand Awareness through increasing
advertising investment.
Recommendations
Long- term ways
1. Devote itself to its leading area, distinguish what are the
disadvantage parts and cut them.
2. Promote its ability to predict marketing needs, for example,
cooperate with government agencies to analyze markets.
The End
Questions?
Answers?