Lenovo Group Limited, 2013 Case #: 20

Name: Zainuddin Shamsir Ali

Student ID: 021-19-46528
Subject: Strategic Management
Program: MBA
Case #: 20 (Lenovo Group Limited, 2013)
Submitted to: Abdul Mujeeb Farooqi
Dr. ShahnawazAdil
Dr. Shahnawaz Adil
 Lenovo Group Limited, 2013 Case #: 20

Lenovo Group Limited, 2013

1.Identification of vision, mission, objectives, and strategies:

1.1 Vision and Mission:
Lenovo’s vision statement reads as follows: “To create personal devices more people are inspired to
own, a culture more people aspire to join and an enduring trusted business that is well respected
around the world.” Lenovo’s mission statement reads as follows: “To become one of the world’s great
personal technology companies.”
1.2 Objectives
Lenovo core objective in this study is to acquire most of the production in-house. Lenovo began to
accentuate vertical integration after a meeting in 2009 in which Yuanqing, and the head of Lenovo’s
supply chain, analyzed the costs versus the benefits of in-house manufacturing and decided to make at
least 50 percent of Lenovo’s manufacturing in-house.
1.3 Strategy
After analysis the case Lenovo is primarily a PC company, but globally demand for PCs is going
down; however, demand for smartphones is rapidly growing, so Lenovo is shifting gears. In
smartphones, Lenovo is competing with Chinese rivals, such as Huawei Technologies Co Ltd. and
ZTE Corp that are already among the top-five smartphone companies globally. Although the second-
biggest Smartphone vendor in China, Lenovo has begun selling smartphones in Russia, Indonesia, the
Philippines, and Vietnam, but the company faces stiff competition globally from Samsung Electronics
Co. Ltd. and Apple Inc. Lenovo’s manufacturing operations are a departure from the usual industry
practice of outsourcing to contract manufacturers. Lenovo instead focuses on vertical integration to
avoid excessive reliance on suppliers and to keep down costs.
 Lenovo Group Limited, 2013 Case #: 20

2. Re-Write Vision and Mission statement:

2.1 Vision:
Lenovo vision is to create personal devices more people are inspired to own, a culture more people
aspire to join and an enduring, trusted business that is well respected around the world. The vision
statement for Lenovo move around the groups of people thinker, and innovations in pursuit of mission
to become one of the world's great personal technology companies.
2.2 Mission:
“Lenovo mission is to become one of the world’s great personal technology companies”. Aspire
people to achieve its objective by the mean of these key areas: Personal Computers: Lead in PCs
market and to be respected for product innovations and qualities. Convergence: Lead in the industry
with an ecosystem of service, device, application and content for people to seamlessly get
communicated with people and e-content. Culture: Recognized as best among the market, trusted and
well-respected companies to work with and for business.

3. External Factor Evaluation (EFE) Matrix

EFE
Opportunities
Factors Weight Rating Score
i. Changing behavior of consumers
according to the new trends can open up new
gates for the Lenovo. Lenovo can build new
streams of revenue and diversify into new
product categories. 0.05 4 0.2
ii. New sales channel can be open by
investing in online platforms; it will engage
more people attraction. 0.02 2 0.04
iii. Government free trade agreement has
provided an opportunity to enter a new emerging
market 0.03 3 0.09
iv. Effective supply chain will decrease the
cost of transportation and can also bring down
the cost of products 0.02 3 0.06
v. Apple lacks consistent global service and
support on many products 0.08 2 0.16
vi. The study shows that Hewlett-Packard
lost $12.6 billion in year 2012 0.09 2 0.18
Lenovo Group Limited, 2013 Case #: 20

vii. New policies for environment are an

opportunity for Lenovo to drive home
advantages in new technologies and gain market
share in the product categories. 0.25 2 0.5
viii. Rapid changing market segments and
developments enable competitiveness compare
with competitors 0.05 2 0.1
ix. The global smartphone market was
increased by 39% in terms of shipped units. 0.15 3 0.45
x. Asia is the world’s biggest market. 0.05 3 0.15

Threats
Factors Weight Rating Score
xi. PC are becoming out of fashioned 0.05 4 0.2
xii. Demand for innovative product will
affect sales periodically over a time. 0.04 3 0.12
xiii. Different policies for liabilities in
various countries may affect to Lenovo global
distributions. 0.09 4 0.36
xiv. Horizontal integration by competitors is
a threat in long term. 0.02 2 0.04
xv. New small companies have easy access
to market is a threat in order to compete in
economical market. 0.04 2 0.08
xvi. Policies for increment in employee
salaries can affect the product cost of Lenovo 0.03 3 0.09
xvii. Apple and Android operation systems
gained more popularity then windows operating
system in smartphones. 0.02 2 0.04
xviii. Lenovo is threaded by China’s ZTE Corp.,
which plans to become one of the world’s top-three
smartphone brands. 0.02 3 0.06
xix. All Competitors reported higher sales in given
year of 2012/2013 than Lenovo 0.05 3 0.15
Xx. Changing in foreign exchange rates is a
threat for Lenovo in order acquires position in
global market. 0.05 1 0.05
1 3.12
Lenovo Group Limited, 2013 Case #: 20

4 construct a Competitive Profile Matrix (CPM) for the target firm.

Lenovo Apple Dell

Critical Success Factors weighted weighted weighted

Weight Score scores Score scores Score scores

I. Shares in the 4 2
Market of PC 0.06
1 0.06 0.24 0.12

II. Shares in the 2 4 1

Market of 0.08
Smart Phones 0.16 0.32 0.08

III. Coverage of 3 4 2
markets all over 0.08
the world 0.24 0.32 0.16

IV. Customer 2 4 3
loyalty with 0.04
brand 0.08 0.16 0.12

V. steady global 2 4 3
service and 0.04
support on
many products 0.08 0.16 0.12

VI. Product 2 4 4
durability 0.12 0.24 0.48 0.12

VII. Net worth of 3 4 3

the firm 0.06 0.18 0.40 0.24

VIII. Higher sales of 2 4 2

products 0.100 0.20 0.40 0.30
Lenovo Group Limited, 2013 Case #: 20

IX. Capital of the 3 4 2

firm 0.10 0.30 0.40 0.20

X. Price 2 4 3
competiveness 0.10
of products 0.20 0.12 0.30

XI. Customer 3 4 4
loyalty with the 0.10
firm 0.30 0.20 0.40

XII. Brand 1 4 2
awareness
through strong
0.06
advertising and
promotion 0.12 0.48 0.24

Total 1.00
2.16 3.68 2.40

5 construct an Internal Factor Evaluation (IFE) Matrix for the target firm.
Strengths Weightage Rating weighted
scores
No.

1 The second-largest smartphone seller in China, Lenovo has 0.12 4 0.48

begun sales smartphones in all over the big Asian countries
as well.
2 Lenovo applications on vertical integration in order to 0.05 3 0.15
sidestep extreme dependence on dealers and to keep down
expenses.
3 Lenovo had become the NFL's "Official Laptop, Desktop 0.07 4 0.28
and Workplace Supporter."

4 Lenovo has capitalized $793 million in the production of a 0.04 2 0.08

mobile phone engineering and R&D capability in Wuhan,
China.
5 Lenovo ranks 4th in the worldwide tablet market by 0.05 3 0.15
capacity.
6 Sales increased 17% and 20% respectively in FY 2013. 0.02 2 0.04
7 Strong strategies - Protect its commercial global PC 0.04 3 0.12
business and its China business and Attack three high
growth opportunities in emerging markets with
Lenovo Group Limited, 2013 Case #: 20

smartphones, tablets, and smart TV’s.

8 Strong sales in China 2012 0.02 3 0.06

9 Net income grow rapidly from $129 million in 2010 to 0.02 4 0.08
$631 million in 2013.
10 Lenovo acquired the Brazil-based electronics company 0.03 2 0.04
CCE.

Weaknesses

1 0.10 4 0.36
Inventory Revenue of 20 with Apple over 70.

2 2 0.14
Lenovo had Low profits in 2013 0.07

3 Lenovo smartphones are not available in Europe, USA, or 4 0.2

Latin American marketplaces.
0.05

4 Lenovo is mainly Chinese PC company with 34% of all 0.10 3 0.06

revenues from PC sales in China and 81% of all Chinese
sales being derived from PCs.

5 Europe Middle East and Africa segment reported only $24 0.05 2 0.06
million in operational profits in 2013.

6 Sales in North America were lesser than any marketplace 0.10 1 0.02
work for.

7 No COO and regional divisions 0.07 3 0.15

Tota 1.0 3.16

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