Lenovo Case Rev.01.Docx
Computers and Technology
Submitted By tfukushim
Case: “Lenovo: Building a Global Brand” Analysis
By facing more and more intensive domestic and international competition in the PC market, Lenovo’s global market share shrank by 6.8% in the average of first and second quarter of 2005. It can be said that this result came from the fact that they don’t have a specific, unique, and competitive marketing strategy in the world other than China. If this market share drop continued, it could be obvious that Lenovo would become a loser in global PC market, which result could have been consequently estimated $205 million decrease in revenues in the end of 2005 compared to the result of 2004 (see Exhibit 1).
At that time, the Lenovo’s managements decided that they acquired IBM’s personal systems division in December 2004 in order to conquer this situation and become a global leading technology company. The primary challenge for the problem in this case was how to build a global marketing and branding strategy other than China by utilizing IBM’s brand and its well-established products such as ThinkPad laptop and ThinkCentre desktop.
Situation Analysis (See Exhibit 2)
Costumers needs and characteristics
Although there are a wide variety of customers in the world, it can be basically said that individual customers are extremely price sensitive after PC became a commodity product like cell phones. In general, young generation in developing and developed countries pursues cheaper products regardless of PCs’ specification. Intensive low price competition results in a shrink of profit margin. Lenovo has to avoid low price competition in order to keep its profitability.
On the other hand, especially among business customers, some of them require higher quality, reliability, and longer durability for business use; at the same time, they also value the product design and look. They use such kinds of...