Lenovo Case Study
Lenovo Case
Situation Analysis
The Lenovo Company, as shown in the case Lenovo: Building a Global Brand, is rooted in product innovation and rapid growth; starting off as a small distributor of imported computers, it grew to become China’s leading computer firm within its first 20 years. After maintaining market leadership in China for several years the company expanded into international markets in 2003, and in 2004 they signed on for two ambitious transactions; joining the Olympic Partner Program, an $80 million agreement that made Lenovo the exclusive provider of computing equipment and services for the Olympic games in 2006 and 2008, and a deal in which they acquired IBM’s Personal Systems Division. The former allowed Lenovo to have access to “exclusive worldwide marketing opportunities”; however it also presented them with the challenges and costs of using those opportunities effectively. In the IBM deal, Lenovo gained use of the IBM brand name (for up to five years), the well-established IBM Think-family products, and some difficult questions on how to move forward.
Lenovo, with the acquisition of the IBM PC business, first had to come up with a plan that would raise awareness for the Lenovo brand name while capitalizing on the established brand IBM. Lenovo decided to go with a “master brand” strategy, focusing most of their efforts on building the Lenovo brand worldwide while also continuing to strengthen the ThinkPad product acquired through IBM. After deciding on their strategy, Lenovo then had to decide what its brand “essence” would become and viewed the competition in two types of business models; those who sold products with little or no innovation and focused on inventory turns, or those who focused on product innovation and less on market share. To stay true to both Lenovo’s and IBM’s innovative roots, as well as attempting to stay current in the evolving PC business, Lenovo decided to position themselves against competitors that focused
Situation Analysis
The Lenovo Company, as shown in the case Lenovo: Building a Global Brand, is rooted in product innovation and rapid growth; starting off as a small distributor of imported computers, it grew to become China’s leading computer firm within its first 20 years. After maintaining market leadership in China for several years the company expanded into international markets in 2003, and in 2004 they signed on for two ambitious transactions; joining the Olympic Partner Program, an $80 million agreement that made Lenovo the exclusive provider of computing equipment and services for the Olympic games in 2006 and 2008, and a deal in which they acquired IBM’s Personal Systems Division. The former allowed Lenovo to have access to “exclusive worldwide marketing opportunities”; however it also presented them with the challenges and costs of using those opportunities effectively. In the IBM deal, Lenovo gained use of the IBM brand name (for up to five years), the well-established IBM Think-family products, and some difficult questions on how to move forward.
Lenovo, with the acquisition of the IBM PC business, first had to come up with a plan that would raise awareness for the Lenovo brand name while capitalizing on the established brand IBM. Lenovo decided to go with a “master brand” strategy, focusing most of their efforts on building the Lenovo brand worldwide while also continuing to strengthen the ThinkPad product acquired through IBM. After deciding on their strategy, Lenovo then had to decide what its brand “essence” would become and viewed the competition in two types of business models; those who sold products with little or no innovation and focused on inventory turns, or those who focused on product innovation and less on market share. To stay true to both Lenovo’s and IBM’s innovative roots, as well as attempting to stay current in the evolving PC business, Lenovo decided to position themselves against competitors that focused