lenovo in china

Topics: Brand, Trademark, Branding Pages: 9 (1817 words) Published: November 16, 2013
USM INDIVIDUAL REPORT
NAME: Aditi Srivastava
UOB NO: 12031297
DATE: 12TH NOVEMBER 2013
LECTURER:Mr. GV Nathan

A CRITICAL ANALYSIS ON LENOVO GROUP TLD’s PERSONAL COMPUTERS CONTENT

INTRODUCTION………………………………………………… 2 INDUSTRIAL ANALYSIS (Five Forces Analysis)………………3 INTERNAL ANALYSIS…………………………………………...5 STRATEGY FORMULATION (Product Matrix)……………….8
CONCLUSION……………………………………………………..10 BIBLOGHRAPHY…………………………………………………11 APPENDIX:
Originality Report……………………………………………. Financial Statement of LENOVO……………………………. Financial Ratios (working)…………………………………

INTRODUCTION
Lenovo Group Ltd is a China based Personal- Computer (PC) manufacturer and has been ranked the third in selling Personal computers. Lenovo Group acquired IBM in 2005, since then Lenovo has been a threatening competitor for other PC manufacturing companies. Lenovo has been focusing more rapid expansion of there operations and is keen on developing a brand name internationally. In 2006, Lenovo entered United States by acquisition and setting up their manufacturing units. This was the first time when they marketed their products in a foreign country.

INDUSTRIAL ANALYSIS- FIVE FORCES ANALYSIS
PORTER’S FIVE FORCES MODEL

Threat Of Entry
First and foremost threat of entering a new market is the loyalty towards current brand in the market. China’s IT industry is present with a distinctive trait of vertical integration. Current PC companies have achieved enough loyal customers and have been maintaining their market status while stopping them from entering the market. Lenovo has been covering one-third of the market share for PC industry in China and also leading in all the other segments. It is stimulating for the new entrance to stake their economies of scale. Moreover, there is a huge amount of investment in Research and Development in PC industry, which might not attract new entrants to this market.

Threat Of Substitutes
Since last few years, PCs are ruling the IT sectors. Mostly, the commercial use markets prefers PCs for their operations. But their demand has being gradually decreasing because of the newly introduced technology in the market. There is a high threat of substitutes because they are available in markets for much lower prices. The most likely substitutes for PC are cellphones and tablets. Due to this many companies have started their smartphones and tablets manufacturing to be at the edge from other companies. Some of the substitute products are advertised as the finance statement. This affects the young mind that gets influence by the advertisements. Bargaining Power Of Suppliers

Mostly the IT and PC products such as raw materials are supplied from Asia-Pacific region because of the cheap raw material cost and labor cost. The bargaining power of suppliers for Lenovo is low because they manufacture their own materials. Material like chips and processors and other material used while manufacturing PC does not have a greater role. As there are fewer suppliers for these materials and for the most part they are predominantly depended on orders for manufacturing products by the big PC companies. In this case, these big PC companies such as Lenovo control supply chain of these companies. Lenovo has an advantage over other foreign companies in local Chinese market material because of the strict government laws for local brand protection law and WTO high standard entrance law. Bargaining Power Of Buyers

The intensity of buyers is also established by their brand loyalty. Once a buyer becomes more familiar and adapted to a particular brand, its difficult to influence them to change to another brand. There has been an increase in the number of buyers for PC related products as PC being an important aspect for people. Their strength is captured from the switch cost from a technology brand to the brands, which requires less capital and supports latest...
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