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Lenovo
• History
• Mission & Vision Statement
• Product Lines
• Segments
• Financial Metrics
• Competitor Analysis
• Strategy Generations
• QSPM
Lenovo
History
• 1981 IBM forms a Personal Computing Division (PCD).
• 1984 Legend is founded in China
• 1985 Legend creates a Chinese character set for
computing.
• 1990 Legend builds the first PC under its own brand.
• 1994 Legend builds its one millionth PC; the company
goes public in Hong Kong.
• 2002 Legend starts making mobile phones.
• 2003 Legend is renamed Lenovo.
• 2005 Lenovo acquires IBM's Personal Computing
Division.
Lenovo
Mission Statement
“Our mission is to become one of the world’s
great personal technology companies. We
aspire to achieve this objective by leading in
three key areas:
Personal Computers: Lead in PCs and be
respected for our product innovation and
quality.
Convergence: Lead the industry with an
ecosystem of devices, services, applications
and content for people to seamlessly connect to
people and web content.
Culture: Become recognized as one of the best,
most trusted and most well-respected
companies to work for and do business with.”
Lenovo
Our Vision
At Lenovo, our vision is that Lenovo will
create personal devices more people are
inspired to own, a culture more people
aspire to join and an enduring, trusted
business that is well respected around the
world. This vision guides us in pursuit of our
mission to become one of the world's great
personal technology companies.
We will accomplish this through:
Personal Computers: Lead in PCs and be respected
for our product innovation and quality.
Convergence: Lead the industry with an ecosystem of
devices, services, applications and content for people
to seamlessly connect to people and web content.
Culture: Become recognized as one of the best, most
trusted and most well-respected companies to work
for and do business with.
Lenovo – Product Lines
Lenovo - Segments
Asian pacific
Europe, Middle East, Africa
Americas
China
Lenovo - Financial Metrics
For the year ended March 31 2016 2015 2014 2013 2012 2011
Liquidity Ratios
Quick Ratio (X) 0.64 0.70 0.79 0.85 0.89 0.89
Current Ratio (X) 0.82 0.89 1.00 1.02 1.00 0.99
Leverage Ratios (%)
LT Debt to Equity 82.78 45.93 0.33 11.31 0.00 0.00
Total Debt to Equity 107.42 74.38 15.06 17.87 2.57 14.80
D/E 5,21 4,25
Profitability Ratios (%)
Return on Equity (ROE) -4.78 20.37 27.03 23.57 19.42 14.89
Return on Assets (ROA) -0.58 3.05 4.45 3.74 3.00 2.55
Net Margin -0.32 1.81 2.11 1.86 1.61 1.27
Asset Utilization Ratios (X)
Inventory Turnover 13.69 14.01 14.42 18.50 25.84 22.86
Beta 1,23
PEG (5year) 1,27
PE N/A
Price/Book 2,39
Dividend 5,14%
Gordon Growth Model:
11,33 13,22 (3.10.2016)
Lenovo
Competitor Analysis - Computer
Lenovo HP Dell
Weight Rating Score Rating Score Rating Score
Advertising 0,1 4 0,4 3 0,3 4 0,4
Product Quality 0,12 3 0,36 3 0,36 3 0,36
Price Competitiveness 0,07 3 0,21 4 0,28 2 0,14
Management 0,04 4 0,16 2 0,08 3 0,12
Financial Position 0,1 2 0,2 3 0,3 3 0,3
Customer Loyalty 0,09 3 0,27 2 0,18 3 0,27
Expansion 0,1 3 0,3 2 0,2 3 0,3
Market Share 0,11 4 0,44 3 0,33 3 0,33
Customer Service 0,05 3 0,15 3 0,15 3 0,15
Innovation 0,06 4 0,24 4 0,24 4 0,24
Brand Image 0,11 4 0,44 4 0,44 3 0,33
Sales Distribution 0,05 3 0,15 3 0,15 3 0,15
1 3,32 3,01 3,09
Lenovo
Competitor Analysis - Mobile Phones
Lenovo Apple Samsung
Weight Rating Score Rating Score Rating Score
Advertising 0,1 2 0,2 4 0,4 4 0,4
Product Quality 0,12 3 0,36 3 0,36 3 0,36
Price
Competitiveness 0,07 3 0,21 2 0,14 3 0,21
Management 0,04 4 0,16 3 0,12 4 0,16
Financial Position 0,1 2 0,2 4 0,4 4 0,4
Customer Loyalty 0,09 2 0,18 4 0,36 3 0,27
Expansion 0,1 2 0,2 4 0,4 3 0,3
Market Share 0,11 1 0,11 3 0,33 4 0,44
Customer Service 0,05 3 0,15 4 0,2 3 0,15
Innovation 0,06 4 0,24 4 0,24 4 0,24
Brand Image 0,11 2 0,22 4 0,44 3 0,33
Sales Distribution 0,05 3 0,15 4 0,2 4 0,2
1 2,38 3,59 3,46
Lenovo – SWOT
Opportunities
1 Mobile and Tablet Market
2 Cloud Services
3 Impact of Globalization
4 Lenovo Brand Awareness
5 India Market
Threats
1 Highly Competitive Industry
2 Rapid technological change
3 Piracy in Asia
4 World Economy
5 Rising cost of raw materials
Strengths
1 Brand (2015/100)
2 Low cost production
3 Computer Market Share
4 Integrations
5 Patents
6 Innovations (2015/50)
Weaknesses
1 Mobile Market Share
2 Debt
3 Low differentiation
4 Slowing growth rate of the laptops
market
5 "made in China image"
Lenovo – TOWS Matrix
SO
•S1/O1 Increase Lenovo Mobile
brand awareness in USA market.
(Market Penetration ->
Promotion MIX)
•S6/O1 Make new innovations in
mobile and Tablet market.
(Product Development -> R&D)
WO
•W1/O5 To get more mobile
market share Lenovo should buy
some company in India.
(Horizontal Integration)
•W5/O4 Make strong marketing
campaigns to change this made
in China stereotype. (Market
Penetration -> Promotion MIX)
Lenovo – TOWS Matrix
ST
•S4/T5 Lenovo should
buy important raw-
material production
company. (Backward
Integration)
•S4/T1 Take over
competitor in India
(Horizontal Integration)
WT
•W2/T4 Lenovo should
shorten the loan.
When world economy
goes down, impact will
not be so strong.
(Finance/Accounting)
Lenovo – IFE & EFE MATRIX
IFE
Strengths
1 Brand (2015/100) 0,1 4 0,4
2 Low cost production 0,1 3 0,3
3 Computer Market Share 0,15 4 0,6
4 Integrations 0,15 3 0,45
5 Patents 0,05 3 0,15
6 Innovations (2015/50) 0,05 2 0,1
Weaknesses
1 Mobile Market Share 0,1 2 0,2
2 Debt 0,1 2 0,2
3 Low differentiation 0,05 3 0,15
4 Slowing growth rate of 0,1 3 0,3
the laptops market
5 "made in China image" 0,05 3 0,15
1 3
EFE
Opportunities
1 Mobile and Tablet Market 0,1 2 0,2
2 Gould Services 0,05 3 0,15
3 Impact of Globalization 0,2 3 0,6
4 Lenovo Brand Awareness 0,1 4 0,4
5 India Market 0,1 1 0,1
Threats
1 Highly Competitive Industry 0,15 3 0,45
2 Rapid technological change 0,15 3 0,45
3 Piracy in Asia 0,05 2 0,1
4 World Economy 0,05 3 0,15
5 Rising cost of raw materials 0,05 3 0,15
1 2,75
Lenovo - IE MATRIX
Grow and Build
Intensive (market penetration, market development, product development)
Integrative (backward, forward and horizontal integration)
Lenovo – SPACE MATRIX
Financial Strength (FS)
1 Cash flow 1
2 Liquidity 2
3 Leverage 2
4 ROA 1
5 ROE 1
7 1,4
Environmental Stability (ES)
1 Competitive Pressure -3
2 Technological Changes -4
3 Barriers to entry in to market -1
4 Easy to exit from market -2
5 Rate of inflation -2
-12 -2,4
Y -1
Competitive Advantage (CA)
1 Computer Market Share -1
2 Mobile Market Share -3
3 Product Quality -2
4 Product Life Cycle -3
5 Customer Loyalty -2
-11 -2,2
Industry Strength (IS)
1 Growth Potential 5
2 Financial Stability 3
3 Technological know-how 6
4 Resource utilization 4
18 4,5
X 2,3
Lenovo – SPACE MATRIX
Competitive
Intensive (market penetration, market development, product development)
Integrative (backward, forward and horizontal integration)
Lenovo – BCG MATRIX
Question Mark:
MP,MD, PD & Liquidation.
Cash Cows:
PD, Concerenchment, Retrenchment &
Divestiture.
Lenovo – Grand Strategy Matrix
StrongCompetitiveposition
WeakCompetitiveposition
Lenovo - QSPM - Mobile
Strengths Horizontal Integration Market Penetration Product Development
AS TAS AS TAS AS TAS
1 Brand (2015/100) 0,1 4 0,4 4 0,4 2 0,2
2 Low cost production 0,1 3 0,3 4 0,4 3 0,3
3 Computer Market Share 0,15 0 0 0 0 0 0
4 Integrations 0,15 4 0,6 2 0,3 2 0,3
5 Patents 0,05 3 0,15 3 0,15 4 0,2
6 Innovations (2015/50) 0,05 2 0,1 3 0,15 4 0,2
Weaknesses
1 Mobile Market Share 0,1 4 0,4 4 0,4 2 0,2
2 Debt 0,1 0 0 0 0 0 0
3 Low differentiation 0,05 2 0,1 2 0,1 4 0,2
4 Slowing growth rate 0,1 3 0,3 3 0,3 3 0,3
of the laptops market
5 "made in China image" 0,05 2 0,1 2 0,1 3 0,15
Lenovo - QSPM - Mobile
Horizontal Integration Market Penetration Product Development
Opportunities
1 Mobile and Tablet Market 0,1 4 0,4 4 0,4 4 0,4
2 Gould Services 0,05 1 0,05 1 0,05 1 0,05
3 Impact of Globalization 0,2 3 0,6 3 0,6 2 0,4
4 Lenovo Brand Awareness 0,1 3 0,3 3 0,3 3 0,3
5 India Market 0,1 4 0,4 3 0,3 4 0,4
Threats
1 Highly Competitive Industry 0,15 1 0,15 1 0,15 1 0,15
2 Rapid technological change 0,15 0 0 0 0 0 0
3 Piracy in Asia 0,05 1 0,05 1 0,05 1 0,05
4 World Economy 0,05 2 0,1 2 0,1 2 0,1
5 Rising cost of raw materials0,05 1 0,05 1 0,05 1 0,05
1 4,55 4,3 3,95
(Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable;
0 = not relevant)
Strategic Analysis Of Lenovo

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Strategic Analysis Of Lenovo

  • 1.
  • 2. Lenovo • History • Mission & Vision Statement • Product Lines • Segments • Financial Metrics • Competitor Analysis • Strategy Generations • QSPM
  • 3. Lenovo History • 1981 IBM forms a Personal Computing Division (PCD). • 1984 Legend is founded in China • 1985 Legend creates a Chinese character set for computing. • 1990 Legend builds the first PC under its own brand. • 1994 Legend builds its one millionth PC; the company goes public in Hong Kong. • 2002 Legend starts making mobile phones. • 2003 Legend is renamed Lenovo. • 2005 Lenovo acquires IBM's Personal Computing Division.
  • 4. Lenovo Mission Statement “Our mission is to become one of the world’s great personal technology companies. We aspire to achieve this objective by leading in three key areas: Personal Computers: Lead in PCs and be respected for our product innovation and quality. Convergence: Lead the industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and web content. Culture: Become recognized as one of the best, most trusted and most well-respected companies to work for and do business with.”
  • 5. Lenovo Our Vision At Lenovo, our vision is that Lenovo will create personal devices more people are inspired to own, a culture more people aspire to join and an enduring, trusted business that is well respected around the world. This vision guides us in pursuit of our mission to become one of the world's great personal technology companies. We will accomplish this through: Personal Computers: Lead in PCs and be respected for our product innovation and quality. Convergence: Lead the industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and web content. Culture: Become recognized as one of the best, most trusted and most well-respected companies to work for and do business with.
  • 7. Lenovo - Segments Asian pacific Europe, Middle East, Africa Americas China
  • 8. Lenovo - Financial Metrics For the year ended March 31 2016 2015 2014 2013 2012 2011 Liquidity Ratios Quick Ratio (X) 0.64 0.70 0.79 0.85 0.89 0.89 Current Ratio (X) 0.82 0.89 1.00 1.02 1.00 0.99 Leverage Ratios (%) LT Debt to Equity 82.78 45.93 0.33 11.31 0.00 0.00 Total Debt to Equity 107.42 74.38 15.06 17.87 2.57 14.80 D/E 5,21 4,25 Profitability Ratios (%) Return on Equity (ROE) -4.78 20.37 27.03 23.57 19.42 14.89 Return on Assets (ROA) -0.58 3.05 4.45 3.74 3.00 2.55 Net Margin -0.32 1.81 2.11 1.86 1.61 1.27 Asset Utilization Ratios (X) Inventory Turnover 13.69 14.01 14.42 18.50 25.84 22.86 Beta 1,23 PEG (5year) 1,27 PE N/A Price/Book 2,39 Dividend 5,14% Gordon Growth Model: 11,33 13,22 (3.10.2016)
  • 9. Lenovo Competitor Analysis - Computer Lenovo HP Dell Weight Rating Score Rating Score Rating Score Advertising 0,1 4 0,4 3 0,3 4 0,4 Product Quality 0,12 3 0,36 3 0,36 3 0,36 Price Competitiveness 0,07 3 0,21 4 0,28 2 0,14 Management 0,04 4 0,16 2 0,08 3 0,12 Financial Position 0,1 2 0,2 3 0,3 3 0,3 Customer Loyalty 0,09 3 0,27 2 0,18 3 0,27 Expansion 0,1 3 0,3 2 0,2 3 0,3 Market Share 0,11 4 0,44 3 0,33 3 0,33 Customer Service 0,05 3 0,15 3 0,15 3 0,15 Innovation 0,06 4 0,24 4 0,24 4 0,24 Brand Image 0,11 4 0,44 4 0,44 3 0,33 Sales Distribution 0,05 3 0,15 3 0,15 3 0,15 1 3,32 3,01 3,09
  • 10. Lenovo Competitor Analysis - Mobile Phones Lenovo Apple Samsung Weight Rating Score Rating Score Rating Score Advertising 0,1 2 0,2 4 0,4 4 0,4 Product Quality 0,12 3 0,36 3 0,36 3 0,36 Price Competitiveness 0,07 3 0,21 2 0,14 3 0,21 Management 0,04 4 0,16 3 0,12 4 0,16 Financial Position 0,1 2 0,2 4 0,4 4 0,4 Customer Loyalty 0,09 2 0,18 4 0,36 3 0,27 Expansion 0,1 2 0,2 4 0,4 3 0,3 Market Share 0,11 1 0,11 3 0,33 4 0,44 Customer Service 0,05 3 0,15 4 0,2 3 0,15 Innovation 0,06 4 0,24 4 0,24 4 0,24 Brand Image 0,11 2 0,22 4 0,44 3 0,33 Sales Distribution 0,05 3 0,15 4 0,2 4 0,2 1 2,38 3,59 3,46
  • 11. Lenovo – SWOT Opportunities 1 Mobile and Tablet Market 2 Cloud Services 3 Impact of Globalization 4 Lenovo Brand Awareness 5 India Market Threats 1 Highly Competitive Industry 2 Rapid technological change 3 Piracy in Asia 4 World Economy 5 Rising cost of raw materials Strengths 1 Brand (2015/100) 2 Low cost production 3 Computer Market Share 4 Integrations 5 Patents 6 Innovations (2015/50) Weaknesses 1 Mobile Market Share 2 Debt 3 Low differentiation 4 Slowing growth rate of the laptops market 5 "made in China image"
  • 12. Lenovo – TOWS Matrix SO •S1/O1 Increase Lenovo Mobile brand awareness in USA market. (Market Penetration -> Promotion MIX) •S6/O1 Make new innovations in mobile and Tablet market. (Product Development -> R&D) WO •W1/O5 To get more mobile market share Lenovo should buy some company in India. (Horizontal Integration) •W5/O4 Make strong marketing campaigns to change this made in China stereotype. (Market Penetration -> Promotion MIX)
  • 13. Lenovo – TOWS Matrix ST •S4/T5 Lenovo should buy important raw- material production company. (Backward Integration) •S4/T1 Take over competitor in India (Horizontal Integration) WT •W2/T4 Lenovo should shorten the loan. When world economy goes down, impact will not be so strong. (Finance/Accounting)
  • 14. Lenovo – IFE & EFE MATRIX IFE Strengths 1 Brand (2015/100) 0,1 4 0,4 2 Low cost production 0,1 3 0,3 3 Computer Market Share 0,15 4 0,6 4 Integrations 0,15 3 0,45 5 Patents 0,05 3 0,15 6 Innovations (2015/50) 0,05 2 0,1 Weaknesses 1 Mobile Market Share 0,1 2 0,2 2 Debt 0,1 2 0,2 3 Low differentiation 0,05 3 0,15 4 Slowing growth rate of 0,1 3 0,3 the laptops market 5 "made in China image" 0,05 3 0,15 1 3 EFE Opportunities 1 Mobile and Tablet Market 0,1 2 0,2 2 Gould Services 0,05 3 0,15 3 Impact of Globalization 0,2 3 0,6 4 Lenovo Brand Awareness 0,1 4 0,4 5 India Market 0,1 1 0,1 Threats 1 Highly Competitive Industry 0,15 3 0,45 2 Rapid technological change 0,15 3 0,45 3 Piracy in Asia 0,05 2 0,1 4 World Economy 0,05 3 0,15 5 Rising cost of raw materials 0,05 3 0,15 1 2,75
  • 15. Lenovo - IE MATRIX Grow and Build Intensive (market penetration, market development, product development) Integrative (backward, forward and horizontal integration)
  • 16. Lenovo – SPACE MATRIX Financial Strength (FS) 1 Cash flow 1 2 Liquidity 2 3 Leverage 2 4 ROA 1 5 ROE 1 7 1,4 Environmental Stability (ES) 1 Competitive Pressure -3 2 Technological Changes -4 3 Barriers to entry in to market -1 4 Easy to exit from market -2 5 Rate of inflation -2 -12 -2,4 Y -1 Competitive Advantage (CA) 1 Computer Market Share -1 2 Mobile Market Share -3 3 Product Quality -2 4 Product Life Cycle -3 5 Customer Loyalty -2 -11 -2,2 Industry Strength (IS) 1 Growth Potential 5 2 Financial Stability 3 3 Technological know-how 6 4 Resource utilization 4 18 4,5 X 2,3
  • 17. Lenovo – SPACE MATRIX Competitive Intensive (market penetration, market development, product development) Integrative (backward, forward and horizontal integration)
  • 18. Lenovo – BCG MATRIX Question Mark: MP,MD, PD & Liquidation. Cash Cows: PD, Concerenchment, Retrenchment & Divestiture.
  • 19. Lenovo – Grand Strategy Matrix StrongCompetitiveposition WeakCompetitiveposition
  • 20. Lenovo - QSPM - Mobile Strengths Horizontal Integration Market Penetration Product Development AS TAS AS TAS AS TAS 1 Brand (2015/100) 0,1 4 0,4 4 0,4 2 0,2 2 Low cost production 0,1 3 0,3 4 0,4 3 0,3 3 Computer Market Share 0,15 0 0 0 0 0 0 4 Integrations 0,15 4 0,6 2 0,3 2 0,3 5 Patents 0,05 3 0,15 3 0,15 4 0,2 6 Innovations (2015/50) 0,05 2 0,1 3 0,15 4 0,2 Weaknesses 1 Mobile Market Share 0,1 4 0,4 4 0,4 2 0,2 2 Debt 0,1 0 0 0 0 0 0 3 Low differentiation 0,05 2 0,1 2 0,1 4 0,2 4 Slowing growth rate 0,1 3 0,3 3 0,3 3 0,3 of the laptops market 5 "made in China image" 0,05 2 0,1 2 0,1 3 0,15
  • 21. Lenovo - QSPM - Mobile Horizontal Integration Market Penetration Product Development Opportunities 1 Mobile and Tablet Market 0,1 4 0,4 4 0,4 4 0,4 2 Gould Services 0,05 1 0,05 1 0,05 1 0,05 3 Impact of Globalization 0,2 3 0,6 3 0,6 2 0,4 4 Lenovo Brand Awareness 0,1 3 0,3 3 0,3 3 0,3 5 India Market 0,1 4 0,4 3 0,3 4 0,4 Threats 1 Highly Competitive Industry 0,15 1 0,15 1 0,15 1 0,15 2 Rapid technological change 0,15 0 0 0 0 0 0 3 Piracy in Asia 0,05 1 0,05 1 0,05 1 0,05 4 World Economy 0,05 2 0,1 2 0,1 2 0,1 5 Rising cost of raw materials0,05 1 0,05 1 0,05 1 0,05 1 4,55 4,3 3,95 (Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable; 0 = not relevant)