abstract lenovo

8/9/2019 Abstract Lenovo

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Chinas Competitiveness

Myth, Reality, and Lessons for the United States and Japan

Case Study: Lenovo

Lenovo is a personal technology company that serves costumers in

more than 1! countries" #t is the largest $C vendor in China and the

second largest in the %orld" &he companys 'usiness as a producer of

$Cs, mo'ile #nternet devices and mo'ile phones is 'uilt on product

innovation, a high degree of locali(ation and customi(ation in each

country, a highly e)cient glo'al supply chain and strong strategic

e*ecution"

#t started in +eiing in 1-./ as the 0e% &echnology evelopmentCompany of the #nstitute of Computing &echnology than2s to the

capital given 'y the government to impulse the industry" Lenovo soon

merged %ith a small manufacturing 3rm,45, as a oint6venture

partner and %ith China &echnology as a 3nancial partner" #t also

e*panded to 7ong 8ong allo%ing it to raise capital and overcome its

early ine*perience in the glo'al #& industry"

5hen tari9s on imported $Cs into China in 1-- %ere reduced and

import ;uotas %ere eliminated, Lenovo had to 'ecome sales and

distri'utive representatives of 4merican and Japanese computers

companies in China due to its distinct price advantage over Lenovo"

4fter the integration of China to the 5&< Lenovo %as put into a much

more competitive environment, so they had to loo2 more to

international mar2ets" Lenovo mad its 3rst appearance glo'ally as a


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Lenovo adopted a >protect?attac2@ strategy for !1161 that includes

e*pandind its lead in $C mar2et share in ChinaA continue %ith the

launch of consumer and commercial ta'let computer linesA gro%

mo'ile #nternet presence glo'allyA drive convergence %ith cloud

devices and attractive apps aiming for the 'est user e*perienceA and

reaching 1!B share 'enchmar2 in emerging mar2ets 2ey countries"

Lenovos competitiveness indicators include mar2et share, sales,

pro3ta'ility, research and development" 4ll of them are factors in the

company that can 'e compared %ith its competitors to set ho% %ell

positioned is the company in the competitive environment of the

industry"

&he 2ey advantages Lenovo has going for%ard are its China mar2et

'ase, its gro%th potential in the emerging mar2ets in %hich it has hadthe most e*perience, the gradual solidi3cation in mature mar2ets, and

its focus on cost innovation" #n addition, it has a strong distri'ution

net%or2, in6house manufacturing speciali(ation, lo%6cost la'or over the

entire company and Chinese government support as ta* advantages,

government grants, the .D $rogram, and su'sidiesE"

Lenovo has made numerous partnerships %ith companies across the

United States and Japan, although most of its competitors are

4merican and Japanese, this partnerships have allo% them to increase

its presence in these countries"

Lenovo as a company has ta2en advantage of all the opportunities

given: it got support from the government, it e*ploited an emerging

industry and sa% the threads as the intrusion of ne% competitors in its

mar2et in China as an opportunity to e*pand its hori(ons and sell its

products %orld%ide"

Lenovo learnt to adapt to its costumers and although 'eing

conservative, it changed its methods and management process so theycould compete glo'ally" Lenovo got over the 'elieve that Chinese

products %ere a synonym of poor ;uality, demonstrating that its

products %ere innovative %hile 'eing economic, and also %ith a line of

high end products"


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4s a conclusion, Lenovo is the perfect e*ample of ho% a company can

gro% 'y learning of the environment and competitors ust as Lenovo

learnt management from 7$E and ta2ing the 'arriers and threads as

challenges and opportunities" Lenovo had its ups and do%ns, 'ut no% a

day it is one of the most important companies in the $C industry"

abstract lenovo

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