Topics: Supply and demand, Economics, Porter generic strategies Pages: 3 (723 words) Published: May 1, 2011
Lenovo computers: east meets west

1. What national sources of competitive advantage might Lenovo draw from its Chinese base? What disadvantages derive from its Chinese base? To identify the main national sources of competitive advantage that Lenovo might derive from Chinese based, first we should look more closely to the economy as for the long run. We can notice that china is near to become a globalized economy so this was so helpful for china to become a market leader through a rapid expansion in its economy and access to several markets like US. Second, the low labor cost that has offered $3 a lot of opportunity, raw materials and land in china. Third, the Chinese have the knowledge of what they are doing and what their market demand and customer needs that the nature of domestic national demanding customers related with low price PC. Fourth, Innovations and knowledge in technology businesses like PC and IT. Fifth, Human Assets, providing staff with an excellent living and working environment helps their creativity. Now in my opinion there is no disadvantage from the Chinese based that Lenovo might draw from them.

Finally to mention for something else, which is the Porter’s Diamond? Porter has mentioned in his diagram for three things that considered as a competitive advantages for Lenovo.

* Conditional Factors: cheap labor cost, raw materials and land. * Home Demand Conditions: as china and India have the hugest population in the world so this will increasing demand in the market and thus the countries have to minimize cost on PCs. * Related and supporting industries: strategic alliance.

* Firm Industry itself: provide professional and excellence IT, strong rivals with IBM, Lenovo has achieved its market sales.

2. In the light of the CAGE framework and the Mac Milan et al. Competitor Retaliation framework, comment on Lenovo’s entry into the American market. CAGE is a framework cultural and economic differences between...
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