Industries served Computer hardware and Electronics

Geographic areas Worldwide

served

Headquarters China and U.S.

Current CEO Yang Yuanqing

Revenue $ 71.618 billion (2021)

Profit $ 2.030 billion (2021)

Employees 71,500 (2021)

Apple Inc., Samsung Electronics Co., Microsoft Corporation, Dell

Main
Inc., Hewlett-Packard Company, Sony Corporation, Fujitsu Limited
Competitors
and many others.

Lenovo is one of the biggest PC vendors. It employs over 70,000 people,

operates in more than 60 countries and serves customers in more than
160 countries. Lenovo has been the fastest growing major PC company
for more than 3 years. You can find more information about the business
in its official website or Wikipedia’s article.
SWOT

Strengths Weaknesses

1. Vertical integration 1. Poor brand perception in the developed

2. Knowledge of China’s market economies
3. Low cost production 2. Low differentiation
4. Strong patents portfolio 3. Commodity (computer hardware) products
5. Competency in mergers and acquisitions
6. Synergy of knowledge and diverse
workforce

Opportunities Threats

1. Growing India’s smartphone market 1. Profit margin decline on hardware products

2. Growth of tablets market
3. Obtaining patents through acquisitions
4. Tablet market growth
2. Slowing growth rate of the laptops market
3. Saturated smartphone markets in developed
countries
4. Rapid technological change
5. Intense competition

Strengths
1. Vertical integration. Lenovo’s strategy to vertically integrate
has paid off. The business can keep costs low, keep up with
the pace, control inventory and rely less on original
equipment manufacturers (OEM).
2. Knowledge of China’s market. Lenovo has emerged in
China and continues to be one of the largest players in
homeland market. The firm’s knowledge of China’s market
and the ability to suit Chinese tastes resulted for the wide
acceptance and support for the business’ products.
 3. Low cost production. Lenovo manufactures nearly half of its
hardware and has set up production plants in low cost
regions such as China, Brazil and Argentina to benefit from
higher margins. It is also able to manufacture low cost
products that are price competitive.
4. Competency in mergers and acquisitions. Lenovo has been
continuously acquiring firms to bring patents, new
capabilities, assets and skills to the company. Most
importantly, through successful acquisitions and joint
ventures, Lenovo accessed new markets and distribution
networks. Compaq is the most notable and successful
Lenovo’s acquisition to date.
5. Strong patents portfolio. With an acquisition of Compaq
and Stoneware and a help of firm’s R&D, Lenovo has
gathered an important patents portfolio related to its PC and
software businesses.
6. Synergy of knowledge and diverse workforce. Instead of
traditional headquarter model, Lenovo manages 3 centers of
excellence around the world (US, China and Singapore).
Combining different skills and resources results in synergy
and premium quality products.

Weaknesses
1. Poor brand perception in the developed
economies. Lenovo’s primary market is Asia, where it sells
most of its production. The company finds it hard to access
US and Europe markets as its brand perception is low there.
2. Low differentiation. Apart from the low price, Lenovo
products are little differentiated from competitors’ products
and are in competitive disadvantage if the price offered by
competitor is lower.
 3. Commodity products. The large stream of Lenovo’s
revenues comes from computer, especially laptop, sales,
which is a commoditized product. Computer hardware
(commodity) products are sold with a very low profit margin.
Opportunities
1. Growing India’s smartphone market. India’s smartphone
market is one of the least penetrated among Asia/Pacific
countries. Lenovo could easily penetrate India’s market with
its already successful low price LePhone.
2. Growth of tablets market. Lenovo currently ranks as 4th
biggest tablets seller. The business could increase its market
share by introducing better quality products.
3. Obtaining patents through acquisitions. If Lenovo wants to
sustain its growth, it needs to obtain more patents and the
best way to do that is to acquire the firms holding them, as it
did with IBM’s Compaq.
4. Tablet market growth. Tablet market is expected to grow in
double digits for the next few years and the company has a
great opportunity to release new tablet models and benefit
from the market growth.

Threats
1. Profit margin decline on hardware products. Lenovo’s
main income is from selling hardware products, which prices
will increase in the future due to rising raw material prices.
This will add to costs for Lenovo and will further cut the profit
margin.
2. Slowing growth rate of the laptops market. Growth rate of
the computer market is slowing down and in the near future
the markets will become saturated. It will prove hard for
 Lenovo to compete in such market and continue to grow its
market share.
3. Saturated smartphone markets in developed
countries. Although Lenovo does not compete in the
developed economies with its smartphones it will have
difficulties in growing its smartphone division and entering
developed economies later as the smartphones market there
is already saturated.
4. Rapid technological change. The serious threat that Lenovo
and the other tech companies are facing is a rapid
technological change. Companies are under the pressure to
release the new products faster and faster. The one that
cannot keep up with the competition soon fails.
5. Intense competition. The company faces intense
competition in all its business segments. It competes in terms
of price, quality, brand, technology, reputation, distribution
and range of products, with Acer, Apple, Dell, HP and
Toshiba.
Sources

1. Lenovo (2013). About Lenovo. Available at:

http://www.lenovo.com/lenovo/uk/en/our_company.html
2. Lenovo (2013). Investor relations – Annual & interim reports.
Available at:
http://www.lenovo.com/ww/lenovo/annual_interim_report.ht
ml
3. Gupta, P. and Rigby, P. (2013). Lenovo entering ‘PC plus’ era,
CEO says. Available at:
http://uk.reuters.com/article/2013/01/10/us-ces-lenovo-
interview-idUKBRE90903L20130110
4. Wikipedia (2013). Lenovo. Available at:
http://en.wikipedia.org/wiki/Lenovo
 SWOT Analysis of HP 2022