- A CHINESE DRAGON IN

GLOBAL VILLAGE
Presented by –
Ashwani.Anveksha.Gargee.Nidhi.Rashi.Yoshika
 • NTD (New Technology developers)
started with an initial capital of
US$25000 in 1984.
• The company’s principal activity
consisted of computer assembly
under license from foreign
manufacturers.
THE • In 1989, NTD took on the name
JOURNEY Legend, and the Chinese firm
produced its first in-house PC in
FROM NTD 1991.
TO LENOVO • In 1997 it became the market leader
in China leaving behind IBM and
Compaq.
• In 1999, it extended its leadership
position to the entire Asia-Pacific
region except Japan.
 Emergence of Lenovo

In 2003, a new brand (and new logo) intended for

international markets appeared called Lenovo.
Lenovo had a double connotation: novo meant “new”
in Latin; the Chinese name, liánxiǎng in pinyin, was a
reference to creativity.
In 2003 Lenovo made its entry, in 14th place, into the
world’s top 15 PC manufacturers. Since 2003, the
Chinese firm had enjoyed sharp growth in
international markets, leading it to contend for second
place in global market share with Dell.
GOING GLOBAL
• Lenovo began its global expansion in 2005 by acquiring
IBM and becoming a part of global market.
• Chinese market derived 86% of its revenue from PC
computer manufacturing.
• 14% of the revenue was earned from phones, services,
software, and servers.
• In 2011, Lenovo sold 46,000 units of its products,
amounting to sales worth US$26.9 billion.
 Protect and Attack

• As its name suggests, this strategy

combines defensive and offensive
elements.​
• Defensively, Lenovo seeks to build on its
success in China, where it currently occupies a
dominant position as China (and the world’s)
top vendor of PCs.
• Offensively, Lenovo seeks to grow
internationally by leveraging acquired assets
and expanding sales to emerging markets.
LENOVO'S INTERNATIONAL EXPANSION

1st expansion from 1997-2003 3rd expansion in 2009

2nd expansion in 2004

 PHASE 1
• During its first international
expansion phase, between 1997 and
2003, Lenovo improved its position in
Asia-Pacific region(1997), exported
to some developed countries,
notable Spain(199), and established
a presence in Silicon Valley(2001).

• The growth came to halt in 2002-

2003 when Lenovo had to confront
increasingly powerful competitors at
home, both local (Tongfang) and
foreign(Dell)
PHASE 2 – Lenovo Acquiring IBM
Lenovo Acquisition of IBM
 Mature included
Two New – Aus, Nwz,
division – European
Mature & Union, US,
Emerging Canada &
Japan

Emerging included –
China, Taiwan, Korea,
Pakistan, India, Asian
Countries, Russia, Middle
East, Turkey & Africa

PHASE 3
Distinction Between
Mature and
Emerging would
matter when looking
at the growth level
 Qualitative International
Growth Phase
Formation of a Joint venture with Japan's NEC

It focus was to combine NEC's strong brand and Japanese

market leadership with Lenovo's efficiently global supply
chain and international reach

Lenovo acquired the German PC

Lenovo acquired PC manufacturer Medion for US$671

million
 Improvement in
International
Expansion

PC brand
recognition
showed lag mostly
in developed
countries but also
in emerging
countries
The Global PC Business Timeline
SWOT Analysis
• Strengths:
a. Leading Market share in China (consistently+25%)
b. 12.6% market share of global PC industry in 2011
c. Cultural Diversity in senior management
d. Low cost production

• Weakness:
a. Lack of brand recognition globally
b. Perception towards Chinese companies
c. Low margins
d. Involvement of Chinese government
SWOT Analysis
• Opportunities:
a. Claim market share in emerging regions e.g.: Middle East, Latin America and the Asian
Countries
b. Developing a more competitive tablet product
c. Fast Global Exposure

• Threats:
a. Diminishing profitability margins
b. Consolidation of supplier industries- gaining bargaining power
c. A maturing industry for laptops/desktops in developed nations.
PESTEL Analysis
• Political/Legal Analysis:

a. Political instability
b. Government grants
c. Encouraging FDI in developing economies
d. Easing of government policies
e. Government motivation to go global(e.g. China)
f. US law to restrict purchases of IT equipment
g. Protection laws
• Economical Analysis:

a. Increase in Profitability
b. Expo 20-20 encouraging brands infiltrate in UAE market due to the
growth forecast in UAE.
c. Financial recession in 2008
d. Tariffs and taxations
e. Rise in labor cost in China- decrease in working population.
• Social Analysis:
a. Customer Attitude
b. Consumer buying habits change in trends
c. Education

• Technological Analysis:
a. Innovation
b. Investment in R&D’s for innovation
c. Short span of product life cycle
 Threat of New Entry
• entry barrier is relatively high
• in technology markets- constant
possibility for a new company to
leapfrog the competition with a
new invention.
Porter's Six Supplier’s Bargaining Power
• This does not apply to Lenovo
Forces • As own manufacturing plants
Rivalry
• three major players in the PC corporate
market, Dell, HP and Lenovo
• relatively few differentiations among these
top three players in terms of product features
and product quality.
• relatively few differentiations among these
top three players in terms of product features
and product quality.
Buyer’s Bargaining Power
• market is relatively low in this
market- mostly B2B
• improving product and service
quality, offering extra features and
maintaining strong customer
relationship is still key to success.
Substitute products
• substitute products are ultralight
laptops and ultramobile PCs
• consumer market is more promising
for these products
Complements
• complements for PCs include operating
systems, software and hardware
• integrating complements into their products,
PC manufacturers are able to meet more
customers’ needs, increase satisfaction and
potentially reach out for more customers.
Sales Growth
Alternatives & Recommendation

Alternatives
• Invest on marketing – Global Brand recognitions
• R&D for the computer tablet market
• Acquiring established companies in emerging
regions

Recommendations
• Collaboration with other companies in the local
region.