12 Success story A case study of Lenovo

Transcription

1 ITS442 Entrepreneurship for IT Business Development 12 Success story A case study of Lenovo Teerayut Horanont, PhD Sirindhorn Interna=onal Ins=tute of Technology (SIIT) Thammasat University E: teerayut@siit.tu.ac.th 10/16/14 ITS442 1

2 Today outline A case study: Lenovo brand building strategy Ref: Vahab Mirrokni, Google Research, New York 10/16/14 ITS442 2

3 A CASE STUDY LENOVO S BRAND BUILDING STRATEGIE: TAKING THE COMPETITION TO COMPETITORS WITH TRANSACTIONAL MODEL

4 Agenda Brief Summary about the case Global PC Industry Lenovo: From Emerging to Surging Key Challenges of Lenovo from the case Recommenda=ons

5 Agenda Brief Summary about the case Global PC Industry Lenovo: From Emerging to Surging Key Challenges of Lenovo from the case Recommenda=ons

6 Overview of Global PC Industry

7 Overview of Global PC Industry Since early 1980s, PC industry has been the most dynamic electronic industry sector The global PC industry reached mature level by mid- 1990s Dell and Gateway starts their build- to- order strategies, resulted to the total supply chain respond swialy to change Emerge of e- commerce (online sales) hastened PC industry s clock speed

8 Overview of Global PC Industry PC- makers enjoys high profits 1990, however, they experiences an extreme downfall in early of 2000 In 2004, in order to maintain PC vendor s market posi=on, vendor consolida=on can develop economies of scale in order to go into a global presence Global PC industry currently affected by two major trends; commodi=za=on which is about mass- produced and the absence of mid- market, which separate to the customers that demand cheapest products and that of exclusive products

9 Agenda Brief Summary about the case Global PC Industry Lenovo: From Emerging to Surging Key Challenges of Lenovo from the case Recommenda=ons

10 About Lenovo: From Emerging to Surging 1984 Established as Legend Group in Beijing Had product and distribu=on facili=es in US, UK, Mexico, Malaysia, Hungry, China, and Brazil 2003 Changed its brand from Legend to Lenovo 2005 Acquired IBM s PC division and became the world s third biggest PC- maker 2006 Lenovo started becoming a partner sponsor in sports events and sigh the contract to become the sponsor of Beijing Olympic Started implemen=ng a worldwide expansion plan by building the second plant in India. Lenovo tried to solidify its presence in US by selling both brand Lenovo and ThinkPad (a brand of IBM) In August announced the taking over Packard Bell BV, the 5th biggest PC- maker in Western Europe

11 About Lenovo: From Emerging to Surging 2008 Lenovo enters the Worldwide consumer PC market with the new "Idea" Brand Launched the new strategy Protect and Anack 2010 Lenovo introduced over 20 new devices at the consumer Electronic show in Las Vegas 2011 In January Lenovo formed a PC joint venture with Japanese IT company NEC, In quarter 3 Lenovo acquired Medion, a German electronics manufacturing company Lenovo took the 2nd place in global PC market share with the share around 15%

12

13 LENOVO S GLOBAL BRAND BUILDING STRATEGIES TRANSACTIONAL MODEL

14 LENOVO S GLOBAL BRAND BUILDING STRATEGIES China RelaJonship model: bulk orders from big enterprises TransacJonal model: serving customers with common requirements and who need lesser customiza=on. Target small- to mid- size companies and individual customers

15 LENOVO S GLOBAL BRAND BUILDING STRATEGIES Global RelaJonship model: acquire IBM PC division TransacJonal model: become tech- sponsor for Turin & Beijing Olympic games, partner with NBA, offer both ThinkPad and Lenovo brand complement the product offering China- based supply chain model: fulfills every order on =me with bener IT system

16 Agenda Brief Summary about the case Global PC Industry Lenovo: From Emerging to Surging Key Challenges of Lenovo from the case Recommenda=ons

17 Key Challenges of LENOVO raise from the case

18 Key Challenge #1 Brand Building Challenges Building a global brand in highly commodi=zed PC industry Hurdles in building strong brand in the US market

19 Key Challenge #2 The Backyard Counterfeits Chinese counterfeits of IT products & components

20 Key Challenge #3 Intense CompeJJon Growing compe==on from interna=onal players At home compe==on with local PC producers & companies with lower prices

21 Key Challenge #4 Cost- CuUng is the only solujon to profit margin Supply chain network interna=onally Outsourcing Trends (CMs: Contract manufacturers)

22 Key Challenge #5 ProliferaJon of technologies Dual! Mul=ple! All in One Func=ons and Interconnected digital technologies

23 Agenda Brief Summary about the case Global PC Industry Lenovo: From Emerging to Surging Key Challenges of Lenovo from the case Recommenda=ons

24 How Lenovo, as a state- owned Chinese company, could prevent the nega=ve viewpoint as endanger to US na=onal security?

25 How Lenovo, as a state- owned Chinese company, could prevent the nega=ve viewpoint as endanger to US na=onal security? Brand PorXolio Strategy - Focusing more on Product brand rather than Corporate Brand PR & Sponsorship/CSR Campaign - Marke=ng and Partnership with world- class events and exhibi=on i.e. Olympic Games, World Cup, or even NBA in US - Dona=ons, Social Responsibili=es Program in US to gain good corporate image

26 How Lenovo, as a state- owned Chinese company, could prevent the nega=ve viewpoint as endanger to US na=onal security? Focus on Quality and InnovaJon - Build key competencies on quality and innova=on to to overcome state owned Chinese company image and narrow the gap of country of origin effect Household PC market in US - Bener penetrate to household PC market segment in US where low loyalty to US origin brand and concern more for affordable price and efficient features

27 How to build a global brand in a highly commodi=zed PC industry?

28 How to build a global brand in a highly commodi=zed PC industry? Customized products and services higher value added, unique product design, new product category Con=nuous R&D for new innova=on Efficient resource u=liza=on Effec=ve distribu=on channels

29 How to build a global brand in a highly commodi=zed PC industry? Create strong brand loyalty such as excellent customer service, aaer sales service Rebranding Lifestyle products not discounted products Adver=sing and sponsorship for global event - Olympic games - Na=onal Basketball Associa=on

30 How to cope with Counterfeits?

31 How to cope with Counterfeits? ConJnuously deliver new innovajon to its products R&D investment Building Brand loyalty Trust in quality Secure intellectual property when outsourcing more operajons to suppliers partners Transi=on of technology and know- how to suppliers should be done appropriately

32 How to improve SUPPLY CHAIN interna=onally?

33 How to improve SUPPLY CHAIN interna=onally? Why is supply chain important? IT product: depreciate and become outdated easily Past: 30- day shipping from China to USA Present: Fully integrated global supply chain

34 Global Supply Chain

35 Current Supply Chain Management Lean Six Sigma: To eliminate 7 kinds of waste: Defects, Overproduc=on, Transporta=on, Wai=ng, Inventory, Mo=on and Over- Processing SAP Sobware: To deal with wide range of customers Key KPIs: Cost, On- =me delivery, Cash conversion, Quality

36 Lean Six Sigma

37 How to sustain in Global CompeJJon?

38 How to sustain in Global CompeJJon? Maintaining compe==ve advantage on low cost Con=nue with global brand image Make use of the strong B2B market to expand to B2C market Quickly adapt to any customer change

39 Other Recommenda=ons ForecasJng System Risk Management: Sensing and Responding Known- Unknown Risk Commitment Review by ExecuJve Management Be Prepare Collaborators turning to compe=tors Foreign governments Exchange rate fluctua=on

40 10/16/14 ITS442 40