LENOVO CASE ANALYSIS
LENOVO CASE ANALYSIS
Facts Surrounding the Case Competing at a global scale requires profound brand equity. Lenovo is a well-known brand in China (as Legend) but it cannot become a global technology giant like Dell or Hewlett-Packard, by merely acquiring the Personal Systems Division of IBM, whose products are popular across the world. Normally, the key challenge in establishing global brands lies in devising the manner in which a company can position its brands in customers’ mindsets, while taking into account global competition that comes from national and international suppliers (Wright, Millman & Martin, 2007, p. 139). Lenovo has to engage in intelligent marketing to attract consumers and make itself a force to reckon with in the global personal computer industry. According to the case study, the global PC industry is highly competitive with the leading performers being Dell, HP, Lenovo and its IBM acquisition, and Acer and Fujistu-Siemens among other corporations and vendors locked in tight competition (Quelch & Knoop, 2006, p. 2-3). Therefore, Lenovo has a daunting task to create brand equity to thrive at a global scale.
The Key Issues
The issue that Lenovo is principally dealing with is how it can effectively enter into the global market, where it is not only struggling against the competition, but is also dogged by an incredulous market. On the surface, the deal between Lenovo and IBM seems to give the former a platform for success due to the complementary nature of the operations of the two firms and because the deal facilitates the expansion of Lenovo’s operations from China and Asia to over 138 countries in the world, where IBM is established (Quelch & Knoop, 2006, p. 6). However, in a marketing research that the company conducts among 4,000 IBM customers, the concerns raised are that the innovation, quality, and service and support are going to be negatively impacted by the takeover of IBM brands by Lenovo (Quelch & Knoop, 2006, p. 9). The
Facts Surrounding the Case Competing at a global scale requires profound brand equity. Lenovo is a well-known brand in China (as Legend) but it cannot become a global technology giant like Dell or Hewlett-Packard, by merely acquiring the Personal Systems Division of IBM, whose products are popular across the world. Normally, the key challenge in establishing global brands lies in devising the manner in which a company can position its brands in customers’ mindsets, while taking into account global competition that comes from national and international suppliers (Wright, Millman & Martin, 2007, p. 139). Lenovo has to engage in intelligent marketing to attract consumers and make itself a force to reckon with in the global personal computer industry. According to the case study, the global PC industry is highly competitive with the leading performers being Dell, HP, Lenovo and its IBM acquisition, and Acer and Fujistu-Siemens among other corporations and vendors locked in tight competition (Quelch & Knoop, 2006, p. 2-3). Therefore, Lenovo has a daunting task to create brand equity to thrive at a global scale.
The Key Issues
The issue that Lenovo is principally dealing with is how it can effectively enter into the global market, where it is not only struggling against the competition, but is also dogged by an incredulous market. On the surface, the deal between Lenovo and IBM seems to give the former a platform for success due to the complementary nature of the operations of the two firms and because the deal facilitates the expansion of Lenovo’s operations from China and Asia to over 138 countries in the world, where IBM is established (Quelch & Knoop, 2006, p. 6). However, in a marketing research that the company conducts among 4,000 IBM customers, the concerns raised are that the innovation, quality, and service and support are going to be negatively impacted by the takeover of IBM brands by Lenovo (Quelch & Knoop, 2006, p. 9). The
References: Aaker, D. A. & Joachimsthaler, E. (2000). The brand relationship spectrum: The key to the brand architecture challenge. California Management Review, 42(4), 8-23. Kotler, Philip. (2012). A Framework for Marketing Management, P. Kotler and K. L. Keller (Ed). Upper Saddle River, NJ: Pearson education Inc. Quelch, J. & Knoop, C. (2006). Lenovo: Building a global brand. Harvard Business School. Rajagopal & Sanchez, R. (2004). Conceptual analysis of brand architecture and relationships within product categories. Brand Management, 11(3), 233–247. Wright, L. T. Millman, C. & Martin, L. M. (2007). Research issues in building brand equity and global brands in the pc market. Journal of Marketing Management, 23(1-2), 137-155.