Porter's five forces and value chain model: Lenovo


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Porter's five forces and value chain model: Lenovo

  1. 1. Name: Wu Diyi Matrix No: P68508
  2. 2.  Lenovo like others big laptop and desktop supplier who did not manufactures its own materials.  The raw materials like boards and chips supplier is fewer and powerful, they are not easy to drive up prices.
  3. 3.  Buyer bargaining power in this market is relatively low in this market, since the store sales mode.  improving product and service quality, offering extra features and maintaining strong customer relationship is still key to success.
  4. 4.  Currently, there are three major players in the PC corporate market, Dell, HP and Lenovo, which take up around 43% of the market share, second in the world market share 15.7% in 2012.(showing on next page).
  5. 5. Vendor 4Q12 Shipments 4Q12 Market Share 4Q11 Shipments 4Q11 Market Share 4Q12/4Q11 Growth HP 15,023 16.7% 15,113 15.8% -0.6% Lenovo 14,105 15.7% 13,040 13.6% 8.2% Dell 9,482 10.6% 11,967 12.5% -20.8% Acer Group 6,959 7.8% 9,692 10.1% -28.2% ASUS 6,467 7.2% 6,126 6.4% 5.6% Others 37,753 42.0% 39,974 41.7% -5.6% All Vendors 89,789 100.0% 95,913 100.0% -6.4% Source: IDC Worldwide Quarterly PC Tracker, January 10, 2013
  6. 6.  According to the customer satisfaction survey, there are relatively few differentiations among these top five players in terms of product features and product quality.  Lenovo has the best customer satisfaction and innovation and overall score among them. But design and displays and audio below average level.
  7. 7.  The most probable substitute products are tablet (like ipad and sumsung note) and smartphones. Despite the rapid development of mobile devices, enterprises don’t see them as useful to their organization.  The consumer market can not be replace by next few years.
  8. 8.  “With the growth of the PC corporate market, there are foreseeable potential entrances in this market. However, the entry barrier is relatively high – enterprises generally seem to be satisfied with their current notebook providers, with little incentive to look beyond their current suppliers. However, in technology markets, it is generally considered a constant possibility for a new company to leapfrog the competition with a new invention. “  “As a result, existing companies are rigorous about attracting new engineering talent and attempt to use complementing to make major changes in IT providers unprofitable. This is a significant reason that Dell, HP and Lenovo maintain their dominant positions in the corporate market.” (Source: Lenovo: Competitive Strategies for Dominance In the Corporate Market )
  9. 9. Force Key Determinants Strength of the force Rivalry competitors Concentration (number) and size of competitors Medium to high Brand identity New entry Economies of scale high Brand identity Capital requirements Threat of substitutes Price/Performance of substitutes Low to medium Switching costs Buyer Power Buyer concentration Medium to high Buyer size (volume) Switching costs Supplier Power Supplier concentration Low Supplier size (volume) Switching costs Table 1
  10. 10.  Like others big laptop and desktop supplier raw material receiving from other supplier.
  11. 11. Lenovo's OEM partners are mainly Wistron, Quanta and Compal three, including the IdeaPad, Thinkpad, and Tin Yat other original series models are apportioned to three foundry.
  12. 12. To adapt the new environment, Lenovo mobile device new products cellphone and tablet came out.
  13. 13. Lenovo delivers the quality, reliability and peace of mind to get you and keep you up and running, no matter where you are, no matter when you need us.
  14. 14.  Procurement  Technology Development  Human Resource Management  Firm Infrastructure
  15. 15.  Drive Quality Improvements from our suppliers of goods and services  Deliver lowest overall cost and greatest competitive advantage  Improve client perception of our values through increased influence and exemplary customer service and support
  16. 16.  Lenovo must learn to innovate to become the true high-tech leader
  17. 17.  This is the technique of employment management that can create positive improvement and add value by the combination of employment policies, programs and practices.
  18. 18.  Lenovo has consistently outgrown the worldwide PC market in unit shipments and gained market share across all geographies, products and customer segments, making it the fastest growing major PC company in the world for three years running.