| | | | | | | | | | | - Computer hardware and Electronics
| | | | | | | | | | | | | | | | | | | | | - Apple Inc., Samsung Electronics Co., Microsoft Corporation, Dell Inc., Hewlett-Packard Company, Sony Corporation, Fujitsu Limited and many others.
| | | | - 1. Vertical integration 2. Knowledge of China’s market 3. Low cost production 4. Strong patents portfolio 5. Competency in mergers and acquisitions 6. Synergy of knowledge and diverse workforce
| - 1. Poor brand perception in the developed economies 2. Low differentiation 3. Commodity (computer hardware) products
| | | | - 1. Growing India’s smartphone market 2. Growth of tablets market 3. Obtaining patents through acquisitions 4. Tablet market growth
| - 1. Profit margin decline on hardware products 2. Slowing growth rate of the laptops market 3. Saturated smartphone markets in developed countries 4. Rapid technological change 5. Intense competition
| - Strengths
- Vertical integration. Lenovo’s strategy to vertically integrate has paid off. The business can keep costs low, keep up with the pace, control inventory and rely less on original equipment manufacturers (OEM).
- Knowledge of China’s market. Lenovo has emerged in China and continues to be one of the largest players in homeland market. The firm’s knowledge of China’s market and the ability to suit Chinese tastes resulted for the wide acceptance and support for the business’ products.
- Low cost production. Lenovo manufactures nearly half of its hardware and has set up production plants in low cost regions such as China, Brazil and Argentina to benefit from higher margins. It is also able to manufacture low cost products that are price competitive.
- Competency in mergers and acquisitions. Lenovo has been continuously acquiring firms to bring patents, new capabilities, assets and skills to the company. Most importantly, through successful acquisitions and joint ventures, Lenovo accessed new markets and distribution networks. Compaq is the most notable and successful Lenovo’s acquisition to date.
- Strong patents portfolio. With an acquisition of Compaq and Stoneware and a help of firm’s R&D, Lenovo has gathered an important patents portfolio related to its PC and software businesses.
- Synergy of knowledge and diverse workforce. Instead of traditional headquarter model, Lenovo manages 3 centers of excellence around the world (US, China and Singapore). Combining different skills and resources results in synergy and premium quality products.
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