Lenovo case presentation

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LENOVO’S BRAND BUILDING STRATEGIES: TAKING THE COMPETITION TO COMPETITORS
WITH “TRANSACTIONAL MODEL”

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Lenovo case presentation

  1. 1. C A S E S T U DY 9LENOVO’S BRAND BUILDING STRATEGIE:TAKING THE COMPETITION TO COMPETITORSWITH “TRANSACTIONAL MODEL”
  2. 2. Agenda• Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging• Key Challenges of Lenovo from the case• Recommendations
  3. 3. Agenda• Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging• Key Challenges of Lenovo from the case• Recommendations
  4. 4. Overview ofGlobal PC Industry
  5. 5. 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
  6. 6. 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
  7. 7. Agenda• Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging• Key Challenges of Lenovo from the case• Recommendations
  8. 8. About Lenovo:From Emerging to Surging1984 Established as Legend Group in Beijing Had product anddistribution facilities in US, UK, Mexico, Malaysia, Hungry,China, and Brazil2003 Changed its brand from Legend to Lenovo2005 Acquired IBM’s PC division and became the world’s thirdbiggest PC-maker2006 Lenovo started becoming a partner sponsor in sportsevents and sigh the contract to become the sponsor of BeijingOlympic 20082007 Started implementing a worldwide expansion plan by building the secondplant in India. Lenovo tried to solidify its presence in US by selling both brandLenovo and ThinkPad (a brand of IBM)In August announced the taking over Packard Bell BV, the 5th biggest PC-makerin Western Europe
  9. 9. About Lenovo: From Emerging to Surging2008 Lenovo enters the Worldwide consumer PC market withthe new "Idea" Brand.2009 Launched the new strategy “ Protect and Attack”2010 Lenovo introduced over 20 new devices at the consumerElectronic show in Las Vegas2011 In January Lenovo formed a PC joint venture with JapaneseIT company NEC, In quarter 3 Lenovo acquired Medion, aGerman electronics manufacturing company .2012 Lenovo took the 2nd place in global PC market share withthe share around 15%
  10. 10. LENOVO’S GLOBAL BRAND BUILDING STRATEGIES“TRANSACTIONAL MODEL”
  11. 11. LENOVO’S GLOBAL BRAND BUILDING STRATEGIESChinaRelationship model: bulk orders from big enterprisesTransactional model: serving customers withcommon requirements and who need lessercustomization. Target small- to mid-size companies andindividual customers
  12. 12. LENOVO’S GLOBAL BRAND BUILDING STRATEGIESGlobalRelationship model: acquire IBM PC divisionTransactional model: become tech-sponsor for Turin& Beijing Olympic games, partner with NBA, offerboth ThinkPad and Lenovo brand complement theproduct offeringChina-based supply chain model: fulfills everyorder on time with better IT system
  13. 13. Agenda• Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging• Key Challenges of Lenovo from the case• Recommendations
  14. 14. Key Challenges of LENOVOraise from the case
  15. 15. Key Challenge #1 Brand Building ChallengesBuilding a global brand inhighly commoditizedPC industryHurdles in buildingstrong brandin the US market
  16. 16. Key Challenge #2The Backyard CounterfeitsChinese counterfeits of IT products & components
  17. 17. Key Challenge #3Intense Competition Growing competition from international players At home competition with local PC producers & companies with lower prices
  18. 18. Key Challenge #4Cost-Cutting is the only solutionto profit margin Supply chain network internationallyOutsourcing Trends (CMs: Contract manufacturers)
  19. 19. Key Challenge #5Proliferation of technologies Dual  Multiple  All in One Functions and Interconnected digital technologies
  20. 20. Agenda• Brief Summary about the case • Global PC Industry • Lenovo: From Emerging to Surging• Key Challenges of Lenovo from the case• Recommendations
  21. 21. How Lenovo, as a state-owned Chinese company, could prevent the negative viewpoint as endanger to US national security?
  22. 22. How Lenovo, as a state-owned Chinese company, could prevent the negative viewpoint as endanger to US national security?• Brand Portfolio Strategy - Focusing more on “Product brand” rather than “Corporate Brand” • PR & Sponsorship/CSR Campaign - Marketing and Partnership with world-class events and exhibition i.e. Olympic Games, World Cup, or even NBA in US - Donations, Social Responsibilities Program in US to gain good corporate image
  23. 23. How Lenovo, as a state-owned Chinese company, could prevent the negative viewpoint as endanger to US national security?• Focus on “Quality” and “Innovation” - Build key competencies on quality and innovation to to overcome state owned Chinese company image and narrow the gap of country of origin effect • Household PC market in US - Better penetrate to household PC market segment in US where low loyalty to US origin brand and concern more for affordable price and efficient features
  24. 24. How to build a “global brand”in a highly commoditized PC industry?
  25. 25. How to build a “global brand” in a highly commoditized PC industry?• Customized products and services higher value added, unique product design, new product category• Continuous R&D for new innovation• Efficient resource utilization• Effective distribution channels
  26. 26. How to build a “global brand” in a highly commoditized PC industry?• Create strong brand loyalty such as excellent customer service, after sales service• Rebranding – Lifestyle products not discounted products• Advertising and sponsorship for global event - Olympic games - National Basketball Association
  27. 27. How to cope with Counterfeits?
  28. 28. How to cope with Counterfeits?• Continuously deliver new innovation to its products – R&D investment• Building Brand loyalty – Trust in quality • Secure intellectual property when outsourcing more operations to suppliers partners – Transition of technology and know-how to suppliers should be done appropriately
  29. 29. How to improve SUPPLY CHAIN internationally?
  30. 30. How to improve SUPPLY CHAIN internationally?• Why is supply chain important? IT product: depreciate and become outdated easily• Past: 30-day shipping from China to USA• Present: Fully integrated global supply chain
  31. 31. Global Supply Chain
  32. 32. Current Supply Chain Management• Lean Six Sigma: To eliminate 7 kinds of waste:Defects, Overproduction, Transportation, Waiting, Inventory, Motion and Over-Processing• SAP Software: To deal with wide range of customers• Key KPIs: Cost, On-time delivery, Cash conversion, Quality
  33. 33. Lean Six Sigma
  34. 34. How to sustain in Global Competition?
  35. 35. How to sustain in Global Competition?• Maintaining competitive advantage on low cost• Continue with global brand image• Make use of the strong B2B market to expand to B2C market• Quickly adapt to any customer change
  36. 36. Other Recommendations• Forecasting System• Risk Management: Sensing and Responding Known-Unknown Risk• Commitment Review by Executive Management• Be Prepare • Collaborators turning to competitors • Foreign governments • Exchange rate fluctuation
  37. 37. . . .T H A N K YO UCASE STUDY 9LENOVO’S BRAND BUILDING STRATEGIE:TAKING THE COMPETITION TO COMPETITORSWITH “TRANSACTIONAL MODEL”

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