Lenovo is one of the most prominent PC manufacturers in the world especially in Asia. It is headquartered in Morrisville, North Carolina and has more than 25000 employees in the world. In 2004, Lenovo purchased IBM’s Personal Computing Division, its global PC (desktop and notebook computer) business. The acquisition made Lenovo one of the leading global PC makers. In addition, Lenovo is a Worldwide Olympic Partner and the Official Computing Equipment provider for the Beijing 2008 Olympic Games. Lenovo recorded revenues of $16.4 billion during the fiscal year ended March 2008, an increase of 17% over 2007. The net profit of this company was $484 million in fiscal year 2008 compared with only $161 million in 2007, an increase of 201% (lenovo.com). Lenovo is now in the process of international development. This essay will use SWOT analysis to analyse Lenovo Company in the areas of strengths, weaknesses, opportunities and threats respectively. Generally speaking, the international competition between Lenovo and other IT companies is intense, and it may point out some weaknesses and threats of Lenovo. However, international development can bring Lenovo unprecedented opportunity to receive great benefit in the global market.
2. SWOT Analysis
2.1 Probable strengths
Compared to main competitors, Lenovo has three strengths. Firstly, Lenovo’s market share in China is dominant compared to other competitors like Dell and HP. Lenovo is one of the leading brands in China and has maintained this leading place for over 10 years. The company’s overall PC market share in China reached 34.6% in the 2007 fiscal year, an increase of 0.7% over the record in 2006. Moreover, Lenovo’s greater China division has been achieving 24% year-on-year growth in PC shipments during recent years and this helps to strengthen its leading market position in China (lenovo.com).
Secondly, the company’s product brand combination achieves greater recognition amongst consumers than many of its competitors. Lenovo is selling the ThinkPad brand notebooks which are considered to be the most engineered and reliable PCs in the world. The Think brand has a large numbers of loyal customers all over the world. On January 3, 2008, Lenovo officially announced the entry into the global consumer PC market with its new consumer-oriented computer brand, “Idea”. The new series of desktop and notebook computers (laptops for IdeaPad, desktop computers for IdeaCentre) are developed for the demand of personal consumers and they will be complementary with the Think brand computers which are focused on commercial market (Deffree＆Suzanne, 2008). Lenovo’s Strong brand combination has propelled the company to occupy a leading position in the global market.
Lastly, Lenovo’s strong engineering and manufacturing capabilities make its PCs reliable and secure enough to satisfy the users. The Think brand series PCs are prestigious on a global scale. Furthermore, Lenovo has a superior distribution network across China which enables it to provide contract manufacturing services to customers worldwide. This distribution network gives Lenovo a competitive advantage over other PC makers. Generally speaking, the company’s strong engineering and manufacturing capabilities enhance its rapid growth in PC market.
2.2 Probable weaknesses
Although Lenovo has become an international company, its corporate brand awareness is still relatively low compared to transnational corporations like HP and DELL outside China. When Lenovo purchased IBM’s Personal Computing Division at $1.75 billion in the year of 2004, many Western people did not even hear of this IT enterprise whose business was concentrated in China before(Deffree＆Suzanne, 2008). Now, through a series of propaganda means, Lenovo has already gained considerable attention all over the world, but compared with major competitors of Lenovo like DELL and HP, this is not enough. What Lenovo...