Recognizing the latest business trends and moving forward Lenovo Essay
LENOVO: Recognizing the latest business trends and moving forward
In the age of globalisation, product name recognition has been widely accepted as the way to fast track the recognition of developing countries in the world market. For instance, in the computer industry, the name-recall of consumers of a particular brand associated to a particular country-manufacturer increases the target market reach. Noteworthy, is the eagerness of developing countries to emerge as a top player in the field of investment and trade. Aiming to rise to the ranks of countries having formidable economic growth and dominance in the international community, developing countries step up by highlighting their capacity to emerge victorious in the battle for sustainable growth and development by becoming a potential key economic player in the world of business.
Lenovo Group Limited is making its presence felt in the international market. It cannot be gainsaid as it ranks third among all other companies engaged in similar products to date. To loyal clients, Lenovo is formerly known as the Legend Technology Group Ltd and Developer Incorporated, which was originally founded in 1984. It is considered the largest manufacturer of personal computers in People’s Republic of China. Its advantage over other manufacturer is rooted
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IBM has always dominated the market for electronic consumer products. It enjoyed a time where competition is not a word to be feared of, since they rule the market. With the advent of technological advancements, IBM remains one of the most formidable players in the field of business and electronics. With its affiliation with IBM, Lenovo acquired the right and privilege to use the IBM brand name for five years, such as the “ThinkPad”. Given the fact that IBM is a world leader in PC products, Lenovo’s purchase and use of its brand names, can only mean success and increased profitability.
Lenovo: Strategy and Market Recognition
Lenovo’s market recognition started when it made its mark in 1990 when it became recognized as the “producer” of the very first personal computer in the market. No longer is Lenovo just an importer of computers but it turned it into a producer and seller, opening more areas of opportunity for expansion. This has brought recognition for Lenovo as one of the pioneers in producing computers that captured the Chinese market. Lenovo continued the development of innovative products and entered into the “Pentium era” of computers with such consistency that it merited continues success for the company.
From there, Lenovo has become unstoppable in creating a name that captures a significant market share. Inevitably, its success would mean a boost for the political image of the country of origin, which is China. Political image in the sense that a strong economic player is easily associated to a better governed state, much more recognizable is the fact that where there is good political condition, economic stability follows. In 2000, Lenovo has been recognized as one of the world’s best managed PC companies, as depicted in their success. What made Lenovo a very much-loved company by the consumers is their ability to identify the consumer needs and to immediately provide to satisfy such demands. Aside from that, Lenovo has exuded a sense of responsibility and accountability to its consumers, owing their success to them. This is especially true when despite possible disadvantages to their company image, Lenovo, made known to the public that they are recalling laptops and replacing them due to a report that a failure in battery performance has led to an inconvenience to the users. This more clarifies the fact that Lenovo stands for innovation, dedication, and consumer friendliness. To date, Lenovo continues to be true to its promise of delivering high quality products.
Expanding business: choosing the right target market
The expansion of businesses and various types of enterprise require careful analysis and familiarization of its target market. This is very much relevant in order to assess the company performance with respect to its chosen group of would-be consumers in the future. When thinking of going international and expanding a business, it is a primary consideration to evaluate the strength and weaknesses of the company with respect to its marketability in a large scale. This is attributable to the fact that going global means getting out of its home base and inching a step away from its “comfort zone”. Similarly, entering a relatively different market offers an adjustment phase that the company needs to overcome in order to fully establish itself as operational. While deciding which market to enter, a good selection of information can reduce the perceptions of risk in international operations as well as the arising from managers’ lack of familiarity with overseas markets and the higher level of uncertainty in international business. However, in the reality, most enterprises have their own preferences, predictions and biases, which correctly or incorrectly will dramatically reduce the number of potential target countries.
Identifying suitable market opportunities should be an integral component of the international marketing process. This is because of the underlying reason that the distinction between countries and markets is an important one, because real market differences may be unrelated to political boundaries and small and medium-sized firms do not have the resources to develop profitable operations on a national scale in the largest countries.
International market selection entails that, companies usually start with screening. Proper selection of international market to penetrate is important. In this stage, firm is seeking the right market, which will eliminate some countries from the list of possible markets. The next important step is to identify variables and determine weight or impact of importance. In this stage, it seeks to identify market potential and growth of the country and of the specific product market. By evaluating the strength of potential competition and identify the risks associated with operating in a given national or product market. The last stage is the country assessment wherein both internal and external factors are taken into consideration.
The choice of market entry strategies is crucial to the success and development of the company.
This is mainly because market entry could be the end and be all of a company. This means that it becomes a “one shot deal” in that its outcome is a determining factor as to the future success of the company. It is therefore imperative to choose the right market entry strategy by weighing the positive effects and the detrimental impact of such strategy.
Like any other decision-making, business strategy cannot be executed by pure whim or caprice. It needs to be based on facts that would determine or predict a certain future for the company. Trial and error has little room with respect to marketing the company. This is highly attributable to the fact that company means investments and it ultimately translates to money. A single mistake could cost a fortune. Although business success is a risk, a company needs to select the risk they are to take. Calculated risks, backed-up by data and study are more likely to produce expected results for the company.
SOCIAL ASPECT OF MARKET STRATEGY
In relation to Lenovo, its origin being in the east, the necessary action would be to formulate steps in order to create a plan that would add up to its success once it conquers the western market. Lenovo was able to analyze the western market and from there recognized the fact that western market offers more stringent competition when it comes to the electronics industry. Upon establishing this fact, Lenovo sought ways to create an opportunity in the form of buying IBM and taking advantage of being able to use its name for a period of five years. This period would allow Lenovo enough time to integrate its product and services to the western market. By having that period, Lenovo can would be able to establish rapport with its consumer base and create name-recall as time goes by.
Taking all of this into consideration, the final phase would be country assessment. Take for example, the United States of America. As a western country, its culture would be more adaptable to change and innovation. By capitalizing on this information, Lenovo has created laptops having up to 11 hours standby mode, which is perfect for the fast-paced lifestyle of the west.
Lenovo: Creating a working corporate culture
Leadership has no formulas. It requires the ability to be able to connect with your employees and establish rapport and camaraderie. A harmonious working environment is a breeding ground for successful leadership. Logically, a corporate culture would be something that is acceptable to all working in the organization. It has not always been like that of course. But the main idea is the adaptability of the people working in particular company, to the culture practiced and adhered to in that organization.
Lenovo is made up of people from all lifestyles. It can be observed that some started from entry-level positions, dating back when the company is just starting. It consists of employees working in different locations around the globe. Lenovo has obtained a stronghold in different markets in country locations worldwide. It success is rooted in the increase of needs and potential business growth is attributable to the capacity to anticipate consumer needs and appropriately answer them. As the needs grow and the consumer wants develop, Lenovo increased marketability and expanded their business scope (Mc Namara, 1999).
Lenovo has evolved from a simple business to a network of subsidiaries and a wide expanse of business opportunities. What drives Lenovo to continue growing, like most companies, are the people working for them. This is where corporate culture comes into play. The overwhelming number of employees under the roof of Lenovo speaks a lot about the corporate culture of the organization.
A leadership style that relies on employee input is very advantageous. Through employee input, management involves the employee’s in developing and administering the reward system. This is because employees know more than anybody else does the tasks and requirements of their respective jobs. Together with a cooperative group of employees, the employer to better encourage the employees of the organization to work hard could establish a reward system. In this manner, criteria of what the company looks for are clearly established. By making them understand that the company needs them and does not in any way intend to replace them with machines, the ease with which employees accept the change is overwhelming.
Leadership is being on top of everything else without sacrificing the good working relationship with employees. On top of everything means that knowledge to what the company is about and what the needs it has are is a necessity. In E-60s situation, the existence of fear among employees, that they might lose their job and machine will replace them is a serious issue. As a leader, the following needs to be done in order to foster harmonious relationship geared towards the benefit of the company:
Lenovo: placing the company at the heart of consumers
To exemplify the nature of corporate value of a company in the world would mean to look deeply into each and every existing business or corporation there is, whether small enterprise or as big as a conglomerate (Wilson, 2003). This of course is highly difficult if not impossible. To better illustrate, it would seem natural to choose a company that has been in the business for a long time, covering a multitude of areas and managing hundreds, even thousands of employees.
This is exactly what Lenovo, a relatively new company compared to others, capitalized on. Recognizing the need to better situate the company in a level-playing field and go head to head against computer-industry giants, Lenovo found a way to fit in and apparently, to make the people easily accept them as an important name in the computer business.
It success is rooted in the increase of needs and potential business growth is attributable to the capacity to anticipate consumer needs and appropriately answer them. As the needs grow and the consumer wants develop, Lenovo is slowly planting firm its name and reputation in the international market. By embracing their respective strengths and weaknesses, Lenovo and IBM eliminated the risk of “career sabotage” common to unsuccessful mergers and acquisitions. Lenovo, in essence has eliminated the east vs. west type of trend in business enterprises. By combining Lenovo’s dynamic nature and IBM’s world-renowned leadership in business, the two companies has successfully made this mark in the PC industry and in the process eliminating international gaps in business.
The company assures that their best is given in terms of quality output by conducting extensive research in order to understand the people who continue to patronize IBM products since understanding what IBM did right in the market segmentation and targeting could mean a huge information asset for Lenovo. If it could bring to the people what IBM did and continue to do, Lenovo would no longer be just an affiliate of IBM but a company name capable of standing on its own. Knowing what drives people to be at their best is the key to ensure long-term success in the field of business. The company prides in its ability to build trust through honesty, integrity, and communication.
Lenovo: Company characteristics at its best
Combining the people-centered work environment, with the high level of individual capacity and the desire to succeed as one, Lenovo is on the right track in achieving continued growth and success. Over the years its dominance in the world market is recognizable if a company is thriving and continues to do so for a long period, it cannot be denied that the corporate structure of the organization is well formed and established. The basic needs of employees in work related issues a re addressed, leaving them satisfied and desiring for more high level of quality work performance.
The need to accommodate clients falls heavily on the capacity to attend to their every need. Companies create ways and develop strategies to maximize growth potential and marketability. Managing a business without the aid of modern tools is like driving a car bound to have a head on collision and sustain irreparable damage. Similarly, a thriving business can easily go down the slope if it fails to adapt to certain acceptable mode of conducting business in the modern world.
Lenovo recognized the need to make its name known to consumers. The role of a company in a given community is very important. The degree of human interaction between the company and the community to which it is situated projects a certain image to the world. To reflect a positive image would mean to get the approval of consumers. Such approval would mean continued success for the company. A company’s life is very much dependent on the perception it projects to people.
As it familiarized with its consumer base, Lenovo products can only speak for themselves in terms of quality. Lenovo did its job well by developing innovative computer products worthy of appreciation and praise. It has developed laptops that could have a standby time of up to 11 hours, something which caters to the businessman on the go. By providing extended battery life, the business sector recognized the importance of Lenovo in their day-to-day tasks.
The thrust of companies today is to offer unparalleled service and manufacture products that would exceed the market expectations of consumers. In order to fully succeed, reliance on modern day tools is necessary. Businesses that have been established long before introduction of modern technology came have a considerable amount of adjustments to make. More specifically if the company caters to a relatively small market, usually by a group of enthusiasts for that particular consumer good. Thus, taking proper care of established consumer relationship is vital to the longevity of the company and the existence of loyal consumes who serves as bridges to future potential market.
Lenovo: Making its mark in the International market
If a company is thinking of to be internationalized, the first thing it needs to do is to evaluate the marketability of the company’s products outside its home base and the choice of markets to enter. While deciding which market to enter, a good selection of information can reduce the perceptions of risk in international operations as well as the arising from managers’ lack of familiarity with overseas markets and the higher level of uncertainty in international business. However, in the reality, most enterprises have their own preferences, predictions and biases, which correctly or incorrectly will dramatically reduce the number of potential target countries.
This would entail creating a strong product line worthy of international recognition by consumers. This would mean that stages of development and market approach are given emphasis. For instance, the economics approach capitalizes on rational behaviour by comparing costs and benefits derived from different market entry. By using such approach, a delineation as to high profitability can be clearly identified. Another would be the business approach where there exists an uncertainty as to which market entry strategy should be applied. This focuses on the decision-making of the company in terms of the risks worthy to venture into as a means to expand the business and sustain its development. This is very important, as profit is the lifeblood of the company. Without beneficial actual and realized profits, the company would deteriorate and soon cease to exist, such that everything else that is attached or connected to it like different products would also lose its economic value and appeal to the consumers.
To be able to render fast and innovative responses to a competitive market, the company needs to be flexible, and backed up by a “design” that define its policies, company goals, and vision. Most organizations today profess their mission to satisfy customer demands and provide high quality service. This can only be done through the proper identification of the organization’s essential purpose—-the very reason why it operates and continue to exist. This is attributable to the fact that the fast-paced lifestyle everyone is accustomed to has brought about a rapidly changing business climate. That is why there is a need to develop strategic objectives and plans in order to have a better foresight of what a particular company or organization will be in the next five to ten years.
However, devising a set of objectives and company plans is one thing. The execution is quite another. To be able to lead the organization forward and create a recognizable position in the industry, perfect execution of plans is necessary. Thus, the whole process of identifying problem areas, finding key solutions, and integrating the entire organization into a suitable system of management is needed.
It is of course common knowledge to all business owners that one cannot eliminate all possible causes of customer dissatisfaction. If it is possible, there would be no need for competition among business organizations for customer attention. This exemplifies the positive impact of establishing relations in various countries, potentially increasing economic growth and development. Opening the market to various industries increases the level of economic competence and it becomes more evident when internationally known firms express interest in the development of businesses in the country. Thus, there is the existence of constant need to please the clients and potential customers.
Increasing profitability: Market entry and strategy
Internationalization is commonly used to describe the developmental process of increasing involvement in international business. International businesses in its trade form have been about for a long time. The foreign market is often been seen have extra source that would bring the business a higher marginal profit. Aiming to cover a wider market would mean to get customers’ attention towards the product sold. To do this, it requires an effective information system to provide the management information on who among the customers is leaving and why. This could be used to determine what to do next in order to address the issue.
Capturing wider target market would entail extending the reach of the product across the globe. This process commonly referred to as the Market entry strategy is utilised by businesses to establish threshold in a particular country. This market entry strategy signifies the importance of penetrating various markets in order to achieve the status of a globally competitive company. This is because internationalization within a much-changed global environment is viewed as an almost inevitable occurrence (Yong and Hamil, 1989). Similarly, the competitive market has encouraged entrepreneurs to widen their scope and expand business all over the globe. Innovation as a mode of expanding business and gaining millions of profit returns is recognized by multinational corporations as a way to create ties with other countries by gaining access to their economy, emphasized by what Lenovo have now. It all adds up to injecting new products to the market based on the consumers needs wants and preferences.
The choice of market entry strategies is very important to the internal marketing. It has a significant impact on the company’s performance overseas and over the whole corporate performance. Therefore, choosing the most effective entry and development mode, is one of the most complex decisions facing the international firm. Furthermore, while choosing the strategies, we also need to consider that each strategy has its advantage and disadvantage, and between each strategy, conflicts can usually appear.
Market entry strategy seeks to promote and achieve the company goal of corporate expansion through the market segmentation and development in the firms and companies overseas. To cater to the necessary changes in corporate expansion, an environmental change pertaining to market entry is needed. The company seeking to get a stronghold of the international market would have to make changes and adjustments suitable to the consumer preferences and needs of a particular country. It is important to take into account that in the exercise of market entry, certain conditions, which may be true to a particular market, may not be necessarily the same compared to another market. This is relevant in determining specific marketing options to choose and to implement. Knowing the market environment is vital in identifying the right approach to be implemented in catering to the needs of the consumers and in the process slowly integrating the brand name or product name through successful market entry.
Another important factor is Budgeting or financial resource allocation. The budgeting process is not just filling out blank worksheets every month and providing classification as to what type of spending it falls under the classification. The budget becomes worthwhile only when it is reviewed in light of what are the actual revenue, cost, and expense categories. In this manner, all things are highlighted and given ample time to be explained and reviewed.
The cost and expense budget is based on intelligent assumptions related to the nature of the category. Budgets will be directly affected by sales levels and marketing performance. Properly documenting budget allocations lead to a much easier task when everything is well accounted for come auditing time.
Withstanding pressures of International Market Competition: PORTER’S FIVE FORCES
It has long been recognized that competition puts pressure among companies that deal with the same industry. This prompts corporations around the globe to create ways to fend off such competition and remain strong and profitable. According to Porter’s five forces, competitive advantage is what drives the business sector. Take for example, Supplier power. The ability of the company to produce parts of what they are selling for repair purposes is a plus factor. There is no threat that the company would have a difficult time in obtaining supplies, thus they become complacent by the mere mention of brand and company name. Lenovo has done its part in terms of assuring the consumers that what they get is top of the line (Agrawal, 1992).
Another of Porter’s five forces is the barriers to entry. This problem has been encountered by Lenovo when it tried for the first time to penetrate the western market. Access to distribution, brand identity, capital requirements were among the concerns. However it found the solution by tying up with IBM which had a stronghold of the western market (Fellner, 1990). This led to porter’s threat of substitutes. By using IBM as spring board, it successfully penetrated the western market. But it became successful in its own right since, the consumers are looking for alternatives, substitutes and Lenovo presented itself by letting people know that it has a distinct identity apart from IBM.
Thus, Lenovo was able to capitalize on the “buyer power” of consumers. They have been interested ever since to what Lenovo could offer apart from its affiliation to IBM. The degree of rivalry is downsized to a few well established companies. But Lenovo has successfully captured the preference of many consumers (Sherman, 1998).
In recent years, while the companies expanding abroad in a significant rate, Asia brands are also taking the advantages and opening its door, moving into the Global market. However, when Asia brand is trying to go international and choosing the market entry strategies, there are a few things necessarily need to be considered.
Domestic and International economic relations are inevitably related to one another. The trends and patterns in international trade and investment greatly affect the international community. This is because economic issues such as foreign direct investment produce both domestic and international economic consequences for the host country and the foreign direct investor. The interplay of relationships that economic issues create astoundingly affects the entire system of trade, investment, and economic development.
Therefore, Lenovo successfully identified factors that could bring advantage to the company’s growth such as affiliating itself with IBM. Continued progress can be expected if the market strategy implemented coincides with what the current market demands. It necessarily means that Lenovo\s marketing strategy and market entry plan worked supplementary with the previous company decisions of affiliating itself with well-renowned IBM bran
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