1.

Porters 5 forces: We can use Porters Six Forces to analyze the

state of the current international corporate PC market to get a better
sense for the environment in which must approach our problem.
Threat of New Entry:
With the growth of the PC corporate market, there are foreseeable potential
entrances in this market. However, the entry barrier is relatively high
enterprises generally seem to be satisfied with their current notebook
providers, with little incentive to look beyond their current suppliers. However,
in technology markets, it is generally considered a constant possibility for a
new company to leapfrog the competition with a new invention.
As a result, existing companies are rigorous about attracting new engineering
talent and attempt to use complementing to make major changes in IT
providers unprofitable. This is a significant reason that Dell, HP and Lenovo
maintain their dominant positions in the corporate market.

Buyers Bargaining Power
The buyers bargaining power in this market is relatively low in this market,
since the customers are enterprises, which purchase bulk volume of PCs to
their employees. The cost to switching to another PC suppliers is high to our
customers, and the RFP process consumes too much of the office of the CTOs,
PC sourcing analysts, and desktop managers time. However, improving
product and service quality, offering extra features and maintaining strong
customer relationship is still key to success.

Suppliers Bargaining Power
This does not apply to Lenovo, who manufactures its own materials to a great
degree mainly, raw materials like boards and chips have reasonably standard
prices.

Substitute products
The most probable substitute products are ultralight laptops and ultramobile
PCs. Despite the heavy advertisement of these products in the media,
enterprises dont see them as useful to their organization. These products tend
to be produced as a fashion statement, which get more attention from
younger customers. The consumer market is more promising for these
products.

Rivalry
Currently, there are three major players in the PC corporate market, Dell, HP
and Lenovo, which take up around 90% of the market share. According to the
customer satisfaction survey, there are relatively few differentiations among
these top three players in terms of product features and product quality. While
Lenovo has the best product support and strongest business relationship with
customers among the three, for Lenovo to catch up
with the other two competitors, keeping the brand name is the key, especially
when the IBM trademark rights are lost.

Complements
The complements for PCs include operating systems, software and hardware
that will be used most by our customers. By integrating complements into their
products, PC manufacturers are able to meet more customers needs, increase
satisfaction and potentially reach out for more customers.
SWOT:
2. SWOT Analysis of Lenovo
In order to propose and justify a forward strategy for Lenovos goods, we use the method of
SWOT (strength, weakness, opportunity and treat) to analysis the Lenovo in the follow:
Table 1: SWOT Summary of the Lenovo
STRENGTHS
WEAKNESSES

- The Lenovo goods and services have good
quality
- The brand recognition and traditional
reputation of Lenovo are very good
- Expanding global markets strategy of the
marketing
- The diversification of products
- Owns very convenient and beautiful images
- Good public relationship and sponsorship


- Single marketing channel, the products and
services are mainly sold by monopolized stores
- Large number of product lines lie in the
expansion of overseas
- Product styles are too fewer to choose
- Marketing sources are not rich
- Prices are not cheap


- Takeover Lenovo to become the largest
computer seller
- Specialty business computer industry takes
larger market in the world
- European countries market exploration,
such as England, France, Italy, Germany, and
so on
- Division of products


- There are too many cheap products
appearing in the world
- Competition from other shoppers embedding
on form factors more pleasing to the
consumer
- The market protect in some countries is
strong
- Foreign exchange rate fluctuations

OPPORTUNITIES THREATS


SWOT
In order to get a better sense for Lenovos outlook in terms of the corporate market and
the impending loss of the IBM branding, it is helpful to analyze the companys strengths,
weaknesses, opportunities and threats in terms of the problem. These key parameters are
summarized here.
Strengths
Lenovos major strengths lie in its current brand image and market share. On the
international scale, Lenovo ranks third in corporate sales behind Hewlett-Packard and
Dell. It shows tremendous capability for improvement, however, due to its clearly
superior reputation for high quality, high end products inherited from IBM. In addition,
executives maintained from IBMs notebook division provide the valuable experience
that a relatively new foreign player normally would not have in the corporate (especially
US) market. However, Lenovo already has a strong base in China, with a 29% share of
Chinas PC market.
There is limited competition for existing IBM/Lenovo corporate customers, because of
existing reputation and connections formed by transferred IBM staff. The historic brand
image and continuing innovation in the high-end market makes products like the
ThinkPad X300 a must-have for a CEO to show off and use. The strength here lies in
the capability for creativity in producing a high-end product with all the bells and
whistles necessary for a corporate executive.
Lenovo provides a highly versatile notebook product line, in addition to its high-end
ThinkPad. As a one-stop shop company, Lenovo shows promise its product lines
covers mid to high end products, now supporting Linux products. In addition, in-house
manufacturing specialization allows for lower marginal costs this leads to a more
competitive position for a price war.

Weaknesses
Since Lenovo is a new player in the international stage it has plenty of weaknesses in its
outlook. In general, its team has less market knowledge than local experienced players in
the US market like HP and Dell. Lenovo has just begun to develop its service team in the
US it still manages to provide top of the line customer service, but the system is not
optimized.
Lenovos major weakness, however, is in the stigma associated with Chinese products
and companies with a reputation for skimping on quality to achieve low costs. A
customer in the states is likely to mistrust the Lenovo brand in favor of the more wellknown
and trustworthy, American IBM logo. It is this weakness that Lenovo must
overcome in the next year as the IBM branding disappears from its products.

Opportunities
With low marginal costs and a wide product spectrum, Lenovo has the opportunity to
become a one-stop powerhouse in the corporate market, providing high-end executive
computers with the IBM ThinkPad line, and high-quality, middle-spectrum computers for
lower level employees on the corporate ladder. In addition, a developed electronics
department allows Lenovo the opportunity for creating synergies between corporate add-
ons like cell phones and Pocket PCs.
Threats
In general, the weakness of the US economy and the dropping value of the dollar might
pose a threat to Lenovos growth. Rivalry between Lenovo and other companies in the
corporate market like HP and Dell already pose a significant challenge, but Apple is
showing a growing strength in the corporate market that must be addressed as Lenovo
seeks to become the dominant international corporate player.
3. Business strategy of Lenovo:
Porters generic strategies:
Porters generic strategy is used for helping a company pursues its competitive advantage in the
market scope it has chosen. There are three types of strategies. They are given below:

Cost leadership:
In this type of strategy it involves the business organisation to gain the cost leadership by being the
cheapest in the market. This can be gain by reducing the cost of production and having enough profit
to produce large amount of product which are cheaper than the rest of the organisation and its
rivals.
Differentiation:
This strategy involves developing your own product or service which are different or more attractive
than the competitors. This strategy focus on the products which enters into a new market with a
unique quality and resources which help the organisation to gain profit.
Focus:
This focus strategy can be two types: cost focus and differentiation focus. Cost focus strategy
involves minimizing cost in a focused market and differentiation focus strategy involves pursuing a
strategic or product or service differentiation in a focused market.


Price strategy of Lenovo
In recent years, the production capacity of IT enterprises seriously exceeds, and this causes
to expand market share and the price war has become worse. As a large computer
manufacturer, of course, Lenovo is subject to the impact of the price war. However, Lenovo
was demonstrated most vividly in this price war, Lenovo did not reduce price, while the
corporate image enhanced, sales grew and market share expanded, the effective price
strategy has enabled Lenovo to exceed in the economy of excessive capacity.
Based on different levels of consumers, Lenovo developed different prices, by creating
differentiated products to meet different consumer groups, formulating differential price
discrimination. Lenovo domestic market sales operator, Yang (2006) said, Lenovo's
production line is continuity, so prices of their products are also of continuity, from more
than 10,000 Yuan to more than 2000 Yuan. Almost every 500 Yuan there are two products
to serve the different needs and purchasing power of consumers. Lenovo now has 19
species, 200 various models of products; Lenovo's exports and diversified product enable it
to avoid involvement in domestic plague of the price war impact of its competitors.
We can see that Lenovo's price strategy can according to products in accordance with the
best performance of the physical value, brand value, the value of service and other form of
value make Lenovo establish an independent cognitive value in the eyes of consumers,
which can be the base of the price of Lenovo products and achieve the relatively
independent cognitive value system. This awareness of the value system is not set up like
the prices can be as simple imitation. Such an independent value and the price of Lenovo
model are built on years of accumulated brand and the concept of service. This created a
core competitiveness of Lenovo brand and Lenovo is still invincible in the fierce competition

Differentiation Strategy
A differentiation strategy is based upon persuading customers that a product is superior to
that offered by competitors. The major benefits to Lenovo of a successful differentiation
strategy are:
(1) Its products will command a premium price.
(2) Demand or its product will be less price elastic than that for competitors products.
(3) Above average profits can be earned.
(4) It creates an additional barrier to entry new business wishing to enter the industry.
Lenovo is seeking to differentiate itself which will organize its value chain activities to help
create differentiated products and to create a perception among customers that these
offering are worth a higher price.

Focus Strategy
A focus strategy is aimed at a segment of the market for a product rather than at the whole
market or many markets. The major benefits of Lenovo focus strategies are: (1). It requires
a lower investment in resources compared to a strategy aimed at an entire market or many
markets. (2). It allows specialization and greater knowledge of the segment being served.
(3). It makes enter to a new market less costly and much simpler.
Since Lenovos is regarded to adopt cost leadership as its development strategy which share
some features of differentiation in the current by the author, the Lenovos competent
advantage is developed from differentiation and cost saving through value chain. Its core
competence is illustrated:
Improved supply chain;
A cheaper price through lower transaction costs;
Convenience and twenty-four-hour access;
Good reputation among customers;
Quick and efficient search capability;
The personality of the service;
Wide selection and one-stop shopping;
First mover in the market stronger than average and well-known.
Lenovo famous brand names makes Lenovo stay well in the fierce market competition,
Lenovos lot of advertising budgets provided a strong guarantee for the material in order to
maintain the competitiveness of Lenovo brand. Over the years, Lenovo brand and Lenovo
advertising leave a deep impression in peoples minds, enhancement of brand recognition,
is actually the acceptance of Lenovo cultural diffusion.
4. Strategic Group:
Strategic
5. CSF and KPI:
Table Of Key Performance Indicators(KPI)

KPIs are measures of business performance. They are used to check performance against targets,
or as benchmarks to signal areas of performance in need of improvement. They are, therefore,
measures of a firms Critical Success Factors (CSF).
In any enterprise there may be dozens of CSFs and literally hundreds of KPIs to track their
performance. Which ones are significant for any particular firm at any particular time depends on
what the business is planning to achieve and what its current situation is, so a SWOT (Strengths,
Weaknesses, Opportunities, Threats) paradigm provides a way of classifying CSFs as in the Table
below.

TABLE 1. MOST
COMMONLY USED KPIS

BUSINESS AREA CRITICAL SUCCESS
FACTOR
KPIS




Service quality
management
1. Cost for administrative error /
management revenues ($)
2. On time delivery (%)




Cycle time
Order to delivery time (time, % of standard)


Customer satisfaction Satisfied customer index (#)

IT Investment in IT()


Market penetration Market share (%)


Revenue
1. Revenues per employee ($)
2. Revenues to total assets (%)
3. Revenues resulting from new business
operations