Competitive Analysis and Marketing Strategies for Lenovo Company

This report provides a comprehensive analysis of Lenovo, a leading computer technology company. It begins with an introduction to Lenovo's global presence and market position, followed by a competitive analysis comparing Lenovo to HP and Dell, including market share data. The report then delves into a detailed SWOT analysis, outlining Lenovo's strengths, weaknesses, opportunities, and threats. It further examines Lenovo's offensive and defensive strategies, target market, and relationship marketing innovations. The report explores customer bonds, mass production and customization, and CRM recommendations to improve Lenovo's customer relationships. The analysis includes financial, social, customization, and structural bonds. The report concludes with a discussion of Lenovo's competitive advantages and strategies for maintaining market leadership in the PC and smartphone industries.

Table of Contents
....................................................................................................................................................1
Introduction................................................................................................................................3
PART A......................................................................................................................................3
Competitive Analysis.................................................................................................................3
SWOT Analysis of Lenovo........................................................................................................5
Strengths.................................................................................................................................6
Weaknesses............................................................................................................................7
Opportunities..........................................................................................................................7
Threats....................................................................................................................................8
Offensive and Defensive Strategy..............................................................................................8
Offensive Strategy..................................................................................................................8
Defensive Strategy.................................................................................................................9
Target Market.............................................................................................................................9
PART B....................................................................................................................................10
Lenovo Relationship Marketing Innovation............................................................................10
Four Types of Customer Bonds and Lenovo Retention Strategies..........................................11
1. Financial Bonds................................................................................................................11
2. Social Bonds....................................................................................................................12
3.Customazation Bonds.......................................................................................................12
4. Structural Bods.................................................................................................................13
Mass Production and Mass Customization in Lenovo.............................................................13
CRM Recommendation to Improve Lenovo............................................................................15

References................................................................................................................................17
Introduction
Figure 1: Lenovo Logo (Lenovo, 2021)
Lenovo is one of the world's most well-known computer technology firms,
specialising in the production of personal computers, servers, smart televisions, and
smartphones. Lenovo has developed from a tiny government-funded start-up in China to
a global powerhouse recognised for its high-quality personal computers since its
inception in 1984 by Liu Chuanzhi (SuccessStory, 2021). Since its inception in 1984, the
company has experienced tremendous growth (Lenovo, 2021). Despite the fact that the
majority of its operations were initially limited to China, by the turn of the century, the
corporation had begun to expand internationally (Lenovo, 2021).
Lenovo is a $47 billion private technology firm with over 57,000 employees and joint
ventures in over 60 countries, conducting business in over 160 countries (Lenovo, 2021).
Lenovo is the world's largest PC vendor and the fourth biggest smartphone company, having
significant research and production facilities in countries across the world. (Lenovo, 2021).
PART A
Competitive Analysis
Lenovo is steadily being on the top as the leading market share of personal computer
vendors next HP Inc and Dell Inc. From figure one it shows that Lenovo is the biggest top
vendors market share with 25.1%, whitelist HP Inc 21.4%, and Dell Inc 16.5% in 2021
quarter one. Lenovo holds the majority of market share worldwide, with 25.1%.
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Figure 1: Quarterly market share of PC shipment worldwide (Alsop, 2021)
Competitive Analysis Table
HP Dell
Company
Profile
William R. Hewlett and David
Packard founded the corporation on
January 1, 1939, with headquarters
in Palo Alto, California (Hall,
2019). It is a laptops and printer
manufacturer (Hall, 2019).
Michael Dell founded the company
in 1984 in Austin, Texas (Way,
2021). Laptops, personal
computers, printers, cell phones,
digital cameras, televisions, servers,
data storage services, and computer
accessories comprise the company's
product line. (Way, 2021).
Key
Competitive
Advantage
HP is the major computing and
printing product maker in the
United States, selling a wide range
of personal computers, laptops,
printers, and peripherals (Pratap,
2020). Furthermore, HP is one of
the leading computing brands, with
a sizable market presence in the
laptop and PC industries (Pratap,
2020).
Dell is well-known for its direct
selling and build-to-order method,
which enabled it to maintain the
industry's lowest inventory level
(Colt, 2020). Furthermore, Dell has
a worldwide suppliers of 200
suppliers that have access to
computerized and real-time data on
demand patterns and volume
forecasts for multiple components.
(Colt, 2020).
Weaknesses Most HP products are pricey when Dell has little brand visibility due to
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compared to Lenovo and Dell,
which can turn customers away.
This is because HP focuses on
sustainability and excellence in its
products (Davis, 2021).
Furthermore, HP has a greater
attrition rate in the sector than the
others, which results in HP not
being able to spend as much money
on training, research, and
development (Davis, 2021).
their concentration on direct sales
models, which makes it difficult for
the company to develop brand
awareness (Frue, 2018). Aside from
the poor brand visibility, Dell does
not invest much in new product
research and development, whereas
their competitors are constantly
pushing and inventing something
new (Frue, 2018).
SWOT Analysis of Lenovo
Strengths Weaknesses
 Good capital expenditure returns.
 Strong distribution network.
 Highly skilled workforce.
 Mergers and acquisitions have a
proven track record of successfully
integrating complementary
businesses.
 Free cash flow is strong.
 In comparison to the competitors,
the days inventory is large.
 Outside of the core business, there
has been limited success.
 The product's marketing leaves a lot
to be desired.
 Investment in R&D is lower as the
industry's fastest-growing
companies.
 Low investment in new
technologies.
Opportunities Threats
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 The new trends in customer behavior
can open new market for Lenovo.
 Customers acquired through the
Internet channel.
 There is no consistent supply of
innovative products.
 Since the company operates in
multiple countries, it is vulnerable
to currency fluctuations.
 New technologies developed by
the competitor
 Growing strengths of local
distributors
Strengths
Lenovo company have a relatively good execution at capital expenditure return of
every new project they created and received a good return on capital expenditure by building
new revenue streams. Shows in figure three that in March 2021 Lenovo capital expenditures
hit €594.5 million. Where the fiscal years ending in March 2017 to 2021 of Lenovo capital
expenditures average is €503.9 million (S&P Global Market Intelligence , 2021).
Lenovo has built a strong distribution network over the years with a reliable
distribution network that can reach the majority of its potential market (Fern Fort University,
2021). Aside from establishing a strong distribution network, Lenovo has a successful track
record of integrating complementary companies through mergers and acquisitions with a
diverse range of technology companies in recent years in order to streamline its operations
and establish a reliable supply chain (Fern Fort University, 2021). Moreover, Lenovo invests
heavily in employee training and development, resulting in a highly skilled workforce and the
strong cash flow making Lenovo able to keep expanding in the new projects (Fern Fort
University, 2021).
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Figure 2: Lenovo Group Capital Expenditures (S&P Global Market Intelligence , 2021)
Weaknesses
Lenovo have a high day’s inventory compare to the other competitors, this happened
due to the lack of skills to manages the demand forecasting while it keeps increasing inside
both in in house inventory and channel (Fern Fort University, 2021). Moreover, even though
Lenovo is one of the leading organizations in personal computer industry, it has faced a
difficulty in moving to other products segments with its present culture (Fern Fort University,
2021).
Even though the products are a success in terms of sales, Lenovo's product marketing
leaves a lot to be desired when it comes to unique selling propositions and positioning, which
can lead to competitor attacks in this type of segment. (Fern Fort University, 2021). When it
comes to R&D investment, Lenovo is among the slowest of the industry's competitors.
Lenovo is finding it difficult to compete with others in terms of innovation and should begin
releasing products based on market tested features. (Fern Fort University, 2021).
Furthermore, Lenovo lacks new technologies because this is one of the slowest in terms of
innovation. Lenovo should invest more in new technologies to integrate the process
throughout the organization (Fern Fort University, 2021).
Opportunities
Seeing as customer behavior trends change over time, new trends may open up a new
market for Lenovo. It introduces a great opportunity for the company to diversify into new
product categories and generate new revenue streams. Besides that, Lenovo has made
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significant investments in online platforms (Yu, 2018). Lenovo's investment has opened a
new channel, and in the coming years, they will be able to capitalize on this opportunity by
getting to know their customers better and providing the company with insights into analyses
(Fern Fort University, 2021).
Threats
Lenovo has developed numerous products over the years, but these are frequently not
innovative enough in comparison to competitors, and the supply of Lenovo new products is
not consistent, resulting in high and slow sales numbers over time and could become one of
the threats that Lenovo will be facing. (Fern Fort University, 2021). Currency fluctuations in
other countries may pose a threat to Lenovo as well, because the operation that Lenovo
carried out was spread across multiple countries, and if there is a politically volatile political
climate, this may pose a threat to Lenovo (Fern Fort University, 2021). Lenovo is very slow
in terms of innovation, this could be a threat for Lenovo due to the competitor's new
technologies that they develop over time and the growing strength of local distributor could
be a threat where the competition is about paying higher margins to the local distributor could
be a serious threat for the long term (Fern Fort University, 2021).
Offensive and Defensive Strategy
Offensive Strategy
Lenovo offensive strategy is that by improving in the AI technology. Lenovo applied
this AI technology through the new devices system called “Smarter Yoga PCs” which are
known for the computing power, first rate craftsmanship, and immersive entertainment
(Lenovo, 2019). This action can bring a new trend that Lenovo offer for the customers with
the new invention that Lenovo develop and get the more attention from people. This
invention was made through collaboration between Lenovo and Intel.
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Defensive Strategy
Lenovo has a strong sales positions in China that makes Lenovo a market leader.
Makes Lenovo focus more on their mainland then enter to global market when it comes on
introducing a new product to see the response (Guo, 2018). Moreover, the defensive strategy
that Lenovo applied is that they analyze and research the customer’s needs, preferences, and
expectation to be able to predict the future needs and changes (Guo, 2018). The invention that
Lenovo develop together with Intel is to catch up with its competitors and keep the
competitiveness as they don’t leave behind with innovation.
Target Market
As one of the leading personal computer industries, there are several factors that
Lenovo considers when choosing target market. First, Lenovo target the customers are from
the city with advanced concepts and a strong brand awareness (Wang, et al., 2021). This
action plays important due to Lenovo brand itself has a comparative advantage were selecting
customer in the city with advanced concepts and strong brand awareness can cater to their
needs. Second, customers in cities with a high level of education, a high admission rate, and
an age of less than 45 (Wang, et al., 2021). Targeting customers with an age below 45, with
an educational level, and high admission rate is a perfect customers crowd is conductive to
high end Lenovo products sales. Last, is targeting customers from the developed rural market
(Wang, et al., 2021). Crowed that are in rural market have a strong brand awareness and has
the formed part of purchasing power. By choosing this type of market, Lenovo can quickly
make Lenovo brand enter the rural market (Wang, et al., 2021).
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PART B
Lenovo Relationship Marketing Innovation
Relationship Marketing is a marketing approach that aims to increase customer
retention, interaction, and long-term engagement. Its goal is to build deep relationships with
clients by offering them with information that is designed for specific interests and needs and
encouraging open conversation (Olenski, 2013). Lenovo has implemented a successful
relationship marketing approach through its franchise outlets, service centers, wholesalers,
and retailers all around the world (Olenski, 2013). Furthermore, with the expansion and
popularity of e-commerce sites, Lenovo is making all of its products available through e-
commerce sites, which is helping them cut costs (Olenski, 2013).
Lenovo distinguishes between two approaches for determining relationships. First,
Lenovo deals with and interacts with business associates through supervisor relationships, in
which they provide additional discounts, sales incentives in terms of zone selection, and
training to their employees in order to promote their products (TestMyPrep, 2018).
Furthermore, they offer a free demo discount in which they give a free product to advanced
customers based on the volume of the transaction they requested. Second, while Lenovo was
dealing with small business associates, they offered this small business a reduction on rebate
requirement, allowing both Lenovo and the small business to keep their relationship and
connection and there is also a LenovoPRO available for small businesses that shows in figure
three (TestMyPrep, 2018).
Figure 3: LenovoPRO (Lenovo, 2021)
Talking about how Lenovo maintain its relationship with their customers and
business, they provided an easy to access and comfortable for them to purchase or solving an
issue through their website. They provided a secure and protected password for each of their
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business customers to make them feel safe and they able to purchase their orders directly
without even need to go to the offline stores (Sivadasan, 2019). Moreover, Lenovo website
provide an easy access for the customers to look and search for the products they want.
Lenovo website provided a search feature where customers able to just put the product model
or products serial number and the system bring it right away to the page. In addition, Lenovo
have designed their website very attractive and segmented every of their products including
the information and the price that shoes in figure four and five.
Figure 4 Lenovo Products Line (Lenovo, 2021)
Figure 5: Lenovo Products Categories (Lenovo, 2021)
Four Types of Customer Bonds and Lenovo Retention Strategies
1. Financial Bonds
Lenovo have applied this bond for their customers that can be found before in the
relationship marketing strategies where Lenovo provide a program benefit for businesses.
Lenovo using this approach through LenovoPRO that shows in figure five and need to
become a member before an individual can access it. There are three categories with different
benefits each program that gives different discount and rebates. In addition, there is also for
student where they can get student discount once they become a member that shoes in figure
six.
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Figure 5: Three LenovoPRO Program Benefits (Lenovo, 2021)
Figure 6: Lenovo Students Program Benefits (Lenovo, 2021)
2. Social Bonds
Lenovo have built a strong relationship with their customers with the method of direct
selling approach and marketing strategies that Lenovo applied to maintain their relationship
with the customers from the start. This social interaction that between Lenovo employees and
the customers able to create a strong social bond due to the need and want that each customer
can be provided by the employees and gain an insight of the customers.
3.Customazation Bonds
Talking about customization bond, Lenovo offers a customization service for their
personal computer and laptops products line that meets their needs and wants. This
customization services can be access through Lenovo website to make it quick, convenient,
and easy for the customer to customize according to their preferences. This customization
bond approach that Lenovo implemented have successfully maintain its relationship with the
customers as the customers satisfied and giving a uniqueness for the products.
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Figure 7: Lenovo Customization Laptops (Lenovo, 2021)
4. Structural Bods
Lenovo have applied this structural bond where Lenovo repurchase the outstanding
perceptual securities, as well as unsecured notes that will happened in 2022 and 2023, and for
working capital purposes (Lenovo , 2020). Where this Lenovo closes successful debut 144A
notes offering joint global coordinator are Citigroup, Morgan Stanley, Credit Suisse,
JPMorgan, BNP Paribas, and Goldman Sachs (Lenovo , 2020). Lenovo will benefit from this
structural relationship by establishing a long-term business and capital structure that is both
sustainable and optimized.
Mass Production and Mass Customization in Lenovo
The continuous production of standardized products, usually along an assembly line,
is known as mass production (Boyce, 2021). It entails producing large quantities of products
in order to provide them to the masses while maintaining output quality and, in most cases,
utilizing automation technology to maximize manufacturing efficiency (Boyce, 2021). As for
the Mass Customization is the combination personalization and flexibility of custom-made
business manufacturing and takes it to another level of mass production, which offers a lower
unit cost (Luenendonk, 2019). However, keep in mind that not every part and piece can be
customized instead, on the things that are important to customers and are determined to be
necessary.
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