Lenovo's Globalization Strategies
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BSTR156
Case Length : 15 Pages
Period : 1998 - 2005
Organization :
Lenovo
Pub Date : 2005
Teaching Note :Not Available
Countries : China
Themes : Globalization |
International Business | Marketing
Industry : Information Technology and Related Services
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
The Reasons for Success
By 2000, Lenovo had emerged as the market leader in the
personal computers (PCs) industry in the Asia Pacific Region except Japan (APEJ),
with a market share of 11.3% (Refer Exhibit III for leading PC companies in
terms of market share in APEJ)...
Losing Market Share
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From the fiscal 2003 onwards, Lenovo started losing market share amidst fierce
competition from both local and foreign players (Refer Exhibit VI for Lenovo's
market share for the period 1996-2004). After China joined the World Trade
Organization in 2001, custom tariffs on imports came down significantly, and
this helped Lenovo's foreign rivals. The company faced aggressive pricing from
foreign PC manufacturers like Dell and HP as well as other local players. Dell's
market share in China doubled to 7.2 per cent between 2002 and 2004. Dell was
particularly successful in selling PCs to corporate clients and government
agencies. In November 2004, the Government of China awarded a US$ 20 million
contract to Dell over Lenovo.
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Going Global
Lenovo's first foray in international markets started in 1991, with the
establishment of Lenovo Germany. However, the company's major efforts to
globalize came in 2001, when it started selling consumer PCs in Hong Kong
for the first time, and laptops under its QDI brand name in Spain, Germany,
Italy and Greece...
The Road Ahead
Lenovo faces tough challenges ahead in its plans to
globalize successfully. Many industry experts felt that changing its name
from Legend to Lenovo would not benefit the company. Bryan Ma, senior
manager with IDC stated, "It is a shame they can't use the Legend name
overseas, as it carries a lot of weight and brand equity."...
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Exhibits
Exhibit I: Top Ten PC Companies in the World (January
2004 -September 2004)
Exhibit II: Lenevo - Business Segments Information(2003-2004)
Exhibit III: Market Share of PC Makers in APEJ
Exhibit IV: Top Five PC Manufacturers in China(2003)
Exhibit V: Lenovo - Five Year Financial Summary
Exhibit VI: Lenovo - Market Share in Chinese PC Market |
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