LENOVO COMPANY
I believe Lenovo limited best fits for a good case study. Lenovo is a multinational company with it’s headquarters based in Hong Kong China. The company’s history dates back to the year 1984. Over the years, the company has evolved to be among the top three personal computer (PC) companies in the world today. Technology is the driving force of the company with products ranging from, smartphones, Smart TVs to servers making the list of it’s products.
The company prides itself with key innovations in the PC industry. According to the company’s website, innovation is Lenovo’s core value. It uses innovation to continue coming up with new products and to spur economic growth. The company aims to create a brand of PC products, mostly smartphones to reach it’s global market. The company makes use of online marketing strategy to reach it’s customers and penetrate new markets a model the company calls a “global-local” company.
The company has a keen interest to expand into new markets globally. Besides manufacturing, which is its main activity, the company wants to create sales, distribution centers, and research centers across the world. With the company’s wide marketing strategy, already it has made numerous acquisitions and mergers and still wants to explore more growth avenues. Currently the company wants to expand it’s presence in the Indian market from just being a sales and distribution center to a manufacturing hub to cover a larger market niche.
Deep in Lenovo’s culture is ingrained the spirit of diversity unified by common aspiration of becoming the best. With an existence in over 160 countries, Lenovo is a center of diversity with people from different cultures and backgrounds. The company embraces it’s diversity to come up with unique innovations.
Through it’s vision the company endeavors to create products which people are inspired to own. A spirit of trustworthiness, which anyone in the world can relate to. This vision is derived from the mission to be the world’s leading personal technology company.
Lenovo uses a vertically integrated end-to end business model. In the wake of tough competition from other PC manufacturers, Lenovo has used this strategy to gain competitive advantage. Guided by the policy Lenovo became an Olympic worldwide partner in the year 2004, the first company in PC technology to collaborate with the Olympic sports body. This was part of the company’s corporate social responsibility. The same year, Lenovo acquired IBM’s personal computing division
As a leading innovator, Lenovo-designed Olympic torch won the Olympic committee’s heart, out of 300 entrants in 2007. By the year 2010, Lenovo was synonymous with cutting edge innovations like Lephone and Thinkpad. Going into a joint venture with NEC, the acquisition of Medion of Germany, its goal of becoming world number one was only an inch away. Finally, in the year 2013, Lenovo achieved the mark of world number one PC Company, joining the league of fortune 500 list of the world’s largest companies, this is courtesy of the company’s website.
The company aims to open a new manufacturing plant in India this year. This is in line with the company’s strategy of providing solutions to it’s clients at a lower cost. Opening offshore plants like this will reduce shipment costs and logistical costs. (Smith,1996) says, companies often open operations abroad to foster faster economic growth. This takes the form of offices, branches and manufacturing plants.
Currently the company is investing more in specialization in the manufacture of it’s products. The smartphone unit has seen the company acquire Motorola, which provided the leeway into the phone market. Becoming a leader, a company has to leverage on the goodwill of existing brands and partners (wind, 1973). Looking back, the company was able to successful use the IBM think brand to penetrate the American market. Just recently, the company expressed interest to acquire blackberry another leading mobile phone manufacture in the world.
Other than taking advantage of brand names, mergers and acquisitions go a long way in reducing overall labor costs. Some countries like India have lower labor costs compared to developed countries. This explains why most of Lenovo’s manufacturing plants are in China and Asian countries. Outsourcing of labor and other logistical technicality such as warehouses can have a huge impact on a company’s profitability
To ensure that the company maintains it’s position as one of the leading players in the global technology industry, the company continues to employ an expansionary strategy. Markets often get saturated and it is only prudent to look for new markets abroad (Colombo, 1989).
Some countries are said to be economic havens. This guarantees easy of doing business with lower tax rates and incentives from the governments. Lenovo is using it’s strategy to venture into these markets. Many a times companies relocate to take advantage of these economic benefits.
The culture of diversity is evident even from the composition and management of the company. The company holds no discrimination against any person with regards to employment and business opportunities. The company discourages any unlawful practice. The company acknowledges the benefits of being a law abiding corporate person, as this is in line with the company’s goal of becoming a global leader.
References
Colombo, R. A., & Morrison, D. G. (1989). Note-A Brand Switching Model with Implications for Marketing Strategies. Marketing Science, 8(1), 89-99.
Smith, W. R. (1956). Product differentiation and market segmentation as alternative marketing strategies. The Journal of Marketing, 3-8.
Wind, Y., Douglas, S. P., & Perlmutter, H. V. (1973). Guidelines for developing international marketing strategies. The Journal of Marketing, 14-23.
dr_mic
lenovo.docx
0
