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Lenovo Computer's : East meets West

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Marina Pauken

on 14 January 2014

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Transcript of Lenovo Computer's : East meets West

Julia Steinhoff
Simon Koch
Thorben Dettmers
Wenja Huang
Anastasiya Zavedeya
Marina Pauken

Computer company

Founded in 1984 by Liu Chuanzhi in Beijing

27.000 Employees

$ 30 Bn . Turnover
in 2012


Lenovo Computers
East meets West
Porter's Diamond
Firm strategy, industry structure and rivalry
innovation,
quality,
labor cost

Home demand conditions
customer structure
,

e-commercial channel,
customer preference
customer aging,


Related and supporting industries
Labor cost,
manufacturing
scale,

Factor conditions
labor cost,
diversity customers

When entering the US
market Lenovo faced
differences in the following aspects:


Cultural
Administrative & Political
Geographical
Economic


International cross-cultural comparison


1 - Initial success
2 - Intense competition
3 - New Actions from Lenovo

Competitor retaliation framework

Configuration of activities

Coordination of activities

Concentrated

Dispersed

Low

High

-most activities still in China

-China still location of R&D

-locational advantage due to high technology level/knowledge in Asia

-Seeking to build stronger brand and network in the US
Complex export
Tradability

Current Strategy
Joint Venture with NEC in Japan
Aquisition
with Medion
in Germany
→ Building brand perception around the world

Trends in the Industry
- Decline in PC Sale in consumer segment
- Increase in Smartphone/ Tablet Sale
→ User interface and cloud technology

- Increasing demand in developing countries
Future Strategies
Concentrate on global Smartphone
& Tablet market

→ Go global autonomously

→ Acquisition of Blackberry

→ Acquisition of other
global company
We have a lot of expertise to scale rapidly, to build rapidly, and to serve developing markets as well as mature markets”
(David Roman, CMO)
Thank you for your attention
Lenovo in its' Chinese Homemarket
Advantages
Disadvantages
Governmental support
Cheap production
Industry structure
Company strategy and rivalry
Related and supporting industry
Large manufacturing scale
Developing consumption level

Lack of English skills
Growth Restrictions
Reputational disadvantage
Lack of core technology support

Lenovo enters the US market
Four international strategies
Sources
http://geert-hofstede.com/china.html
http://www.lenovo.com/us/en/index.html
http://www.ibm.com/ibm/us/en/pcannouncement/
http://de.slideshare.net/MartinKrchk/4thlenovo
http://de.slideshare.net/johnpapas7/lenovo-10204596

http://www.usatoday.com/story/tech/2013/07/01/pc-tablet-market/2479963/
http://www.citeworld.com/business/22302/consumer-pc-market-will-collapse-quicker-anybody-thinks
http://redmondmag.com/articles/2013/10/25/global-pc-market.aspx
http://idc-cema.com/eng/about-idc/press-center/56915-growth-in-mobility-trend-spells-further-decline-for-pc-market-says-idc
http://www.itbusinessedge.com/blogs/unfiltered-opinion/blackberrys-future-intel-lenovo-joint-venture.html
http://www.scmp.com/business/china-business/article/1347871/lenovos-future-may-lie-how-it-plays-smart
http://english.caixin.com/2012-03-02/100363099.html?p3
http://www.bbc.co.uk/news/business-23939372

Exploring Strategy, Johnson, Whittington and Scholes, 9th Edition, chapter 8 inlcuding case study
1990 Production of first Lenovo PC

30% Market share by 2005

Acquisition of IBM

Licensed to use IBM Brand for 5 years

IBM's Stephen Ward became Lenovo's CEO
(later W.Amelio from Dell)

Headquater moved from China to US

The Company

The Entry in the US Market

Current and advised Strategies
Full transcript