In order to get a better sense for Lenovo’s outlook in terms of the corporate market and the impending loss of the IBM branding, it is helpful to analyze the company’s strengths, weaknesses, opportunities and threats in terms of the problem. These key parameters are summarized here.
Lenovo’s major strengths lie in its current brand image and market share. On the international scale, Lenovo ranks third in corporate sales behind Hewlett-Packard and Dell. It shows tremendous capability for improvement, however, due to its clearly superior reputation for high quality, high end products inherited from IBM. In addition, executives maintained from IBM’s notebook division provide the valuable experience that a relatively new foreign player normally would not have in the corporate (especially US) market. However, Lenovo already has a strong base in China, with a 29% share of China’s PC market.
There is limited competition for existing IBM/Lenovo corporate customers, because of existing reputation and connections formed by transferred IBM staff. The historic brand image and continuing innovation in the high-end market makes products like the ThinkPad X300 a “must-have” for a CEO to show off and use. The strength here lies in the capability for creativity in producing a high-end product with all the bells and whistles necessary for a corporate executive.
Lenovo provides a highly versatile notebook product line, in addition to its high-end ThinkPad. As a “one-stop shop” company, Lenovo shows promise – its product lines covers mid to high end products, now supporting Linux products. In addition, in-house manufacturing specialization allows for lower marginal costs – this leads to a more competitive position for a price war.
Since Lenovo is a new player in the international stage it has plenty of weaknesses in its outlook. In general, its team has less market knowledge than local experienced players in the US market like HP and...