Individual Assignment – Situation Analysis

Current Marketing Situation For Lenovo Tablets

TABLE OF CONTENTS

Table of contents ---------------------------------------------------------------------- 2

1. Introduction ------------------------------------------------------------------------- 3

2. Marketing Situation Analysis ----------------------------------------------- 3

a) Internal Environment Analysis ------------------------------------------- 3

b) Major Competitors Analysis -------------------------------------------- 6

c) The Customer Analysis ----------------------------------------------------- 7

d) The External Environment Analysis ------------------------------------- 8

3. SWOT Analysis ---------------------------------------------------------------------- 10

4. Marketing Objectives ---------------------------------------------------------- 11

5. References ---------------------------------------------------------------------------- 12

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1. Introduction

Lenovo is a Chinese person computer manufacturer which founded in 1984 and it

has become the world’s third largest manufacturers formed after its acquisition of

the IBM Personal Computing Division in 2005. Early this year, Lenovo jumped into

the tablet fray with its ThinkPad and IdeaPad K1 tablets.

This document will analysis in detail the current marketing situation for Lenovo

tablets. The first part will present the internal, customer and external

environments. The second part will be the SWOT analysis. And the last part will

define the Marketing Objectives. The references are also included in the the

document.

2. Marketing Situation Analysis

a) Internal Environment Analysis

1) Current Marketing Objectives

Building the leadership team, developing strategies and taking people

with you (Liu, 2011).

Lenovo will be one of the strongest of the players in tablets area (Yang,

Y.D., 2011)

2) Current Marketing Strategy

Focus on mid and low-range devices

Apple only covers the top tier. Lenovo’s strategies are aim to cover different

market segments, as well as the low salary class (Yang, Y.Q., 2011).

Price Strategy

Although the tablets market is created by iPad, Lenovo’s tablets sale is still

very good. Lower price is a major selling point for Lenovo. Comparing with

Apple’s iPad which pricing $599 for 32GB, Lenovo selling K1 tablet for only

$499 for the same amount of storage.

Protect and Attack Strategy

The biggest competitor of Lenovo, Apple Tablet PC achieved a remarkable

performance, but a product can not meet all the requirements of the

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consumers. (Tang, J. 2011) .

Lenovo PC in mature markets has reached 80% coverage in urban centers.

Lenovo decided to put the main market on emerging market. Now Lenovo

has step in the first place in global emerging markets. In this area Apple does

not have good products.

3) Current Performance

The global PC market grew 7% during the first quarter of this year –

largely fueled by tablets (Canalys, 2011). Lenovo had a 9.5% share of

shipments which has increased by 17% from the same time last year.

The Growth rate is on the second place that only behind Apple.

After expanded into emerging market, the net profit for the quart er

ending in March is US$42 million which is more than tripled.

4) Human Resources

Government Relations

Lenovo maintains good relationships with local governments around the

world. Lenovo strives to adhere to the highest standards of integrity and

accountability when dealing with government rules and regulations

Lenovo Sustainability Report, 2010) .

Employees

Lenovo had 27,039 employees at 31 March, 2011.

Lenovo implements remuneration policy, bonus and long -term incentive

schemes with reference to the performance of the Group and individual

employees. The Group also provides benefits such as insurance, medical and

retirement funds to employees to sustain competitiveness of the Group

(Lenovo 2010-2011 Annual report, 2011)

5) Financial Resources

At March 31, 2011, Lenovo had bank deposits, cash and cash

equivalents totaled US$2,997 million.

Lenovo had a 3-year US$300 million loan facility with a bank in China,

a 5-Year US$300 million loan with a bank of on July 17, 2009, and

another 5-Year US$500 million loan.

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6) Global Supple Chain

Logistics

Lenovo is a member in SmartWay, and with being a partner with the U.S.

Environmental Protection Agency (EPA), Lenovo measures and maintains an

efficient Canada and U.S. shipping tasks.

Supplier Engagement

Lenovo is actively engaged with their suppliers as a responsible corporate

citizen to promote improvements in their entire supply chain that improve

the quality of life at work and at home.

b) Major Competitors Analysis

Competitors

Strengths

Weaknesses

Apple iPad

• Strong brand

loyalty

• Simple, easy to

use

• More Applications

• Limited product

range

• Less choice

• Expensive

• Can not read

Adobe Flash files

• Advanced

technology

• Easy to take with

• Long battery life

• Able to read Adobe

Flash files

• Small screen

Samsung Galaxy

Tab

http://www.thinkofus.c

om.au/SearchResults.

5

asp?Search=samsung

Blackberry Playbook

• Security and

reliability

• True multi-tasking

• Able to read Adobe

Flash files

• Less applications

available due to

new QNX

operating system

• No 3G networking

c) The Customer Analysis

There are five main reasons why people buy tablets:

1) Portability

Tablets are lighter and easier to carry compares to the normal computers.

Comparing with the Smartphone, people would like to have a bigger screen

to view the entire Web page and videos.

2) Productivity

For the business person, a tablet will be very useful for handling some basic

tasks, such as checking E -mails, making plans, managing schedules, etc.

3) Entertainment

A better way to have a rest.

4) Adaptability

Installing applications on a tablet is much simple than customize a computer.

5) Battery Life

A major reason why customer would buy a tablet is the longer battery life.

d) The External Environment Analysis

1) Political Analysis

After computers discovered from last century, they have been used in almost

everywhere and been useful for our lives. But new problems come up such as

pollutions. Due to this issue, the EUP instruct of The European Union which

control the pollution of computer industry formal effective in 2007. The China

government also encourages the green IT which leads to lower noise pollution

and lower energy consumption. In noise pollution section, Lenovo has achieved

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(Lenovo, 2005).

Most of the Lenovo products meet the requirements of the following

environment programs:

Electronic Product Environmental Assessment Tool (EPEAT)

ENERGY STAR

TCO Certified EDGE

GREENGUARD

Restriction of Hazardous Substances (RoHS) Directive

2) Economic Analysis

There appears a downturn in the world economic due to the influence by the

2008 economic crisis. Chinese government published the new economic

policy and offered 400 million RMB to encourage economic development. It is

a good chance to develop Chinese IT industry.

There is also a negative impact by globalization opening up more markets,

because it will bring more competitors for Lenovo Tablets. Increasing income

of the society will benefits the technological developments.

3) Social Analysis

Lenovo’s main industry is located in China, and China has a large population

which means lower labor costs.Much more competitors enter into the market

to satisfy higher cust omers demanding which is led by the increasing

globalization.

By the increased income and increased educational levels, people have

become more service sensitive as well as technique and quality orientated .

4) Technological Analysis

11 scientists who worked in Chinese Academy created the Legend of Lenovo.

They have offered a good technology support. Lenovo has completed the

acquisition of IBM, so the technology of IBM also supported Lenovo by

making high quality products (Lenovo, 2005).

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3. SWOT Analysis

Strengths

• Lenovo Tablets got bigger screen size and it

is a core competitive point

• Two series of tablets target two different

consumer group

• Branding influence and consumer loyalty in

China

• Great organizational resources offer

reasonable products

• Focusing on emerging markets

gives more potential rises in the

sales.

• Great global supply chain

• Lower pricing

• Low labor and production cost

Weaknesses

• Lenovo Tablets are still too heavy compare with

iPad

• Competitors such as Apple and Samsung

• Poor brand influence globally

• Limited knowledge of global market

• Low global market share

Opportunities

• Lenovo will benefits from the Chinese

Government Policy.

• Rapid growing of global market and emerging

market

• Increasing global demand

• Developing more products with the technolo

gy of IBM

Threats

• Heavy competition

• Price with other competitors

• Low popularity

• New entrants to the market

4. Marketing Objectives

a) Target at least 20% tablet market share in China at the end of this year.

b) Release series of new tablets within one year.

c) Double the sales of tablets at the end of this year.

5. References

Lenovo, 2011. Annual report 2010 -2011.

Lenovo, 2010, Sustainability report 2010.

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Lenovo, 2008, Environment report.

Reisinger, D., 2011, Lenovo Jumps into Tablet Market: 10 Features They Need

to Succeed. [online] Available at: <

http://www.eweek.com/c/a/Mobile-and-Wireless/Lenovo-Jumps-into-T ablet-

Market-10-Features-They-Need-to-Succeed-658802/> [Accessed 3 October

2011].

Laptop Buying Guide, 2011. Lenovo's three strategies in Tablet PC market.

[online] Available at: <

http://www.deliton.com/2011/04/21/lenovos -three-strategies-in-tablet- pc-

market/> [accessed 3 october 2011].

Haselton, T., 2011, Tablets fuel 7% growth in global PC market, report says

.[online] Available at:<http://www.bgr.com/2011/04/28/tablets -fuel-7-

growth-in-global-pc-m arket-report-says/> [Accessed 2 October 2011]

Scribd, 2011,RIM Playbook SWOT analysis . [online] Available at :

http://www.scribd.com/doc/47019712/RIM -Playbook-SWOT-Analysis

[Accessed 4 October 2011]

ITBloggen, 2011, Lenovo tablet in China market. [online] Available

at:<http://itbloggen.se/cs/blogs/xulixia/archive/2011/09/08/lenovo -tablet-i n-

china-market.aspx> [Accessed 5 October 2011]

Wright, R. and Yeraswork, Z., 2011, With No U.S. Lauches, What Exactly Is

Lenovo's Tablet Strategy? [online] Available at: http://www.crn.com/news/client

-devices/229202770/with-no-u-s-launc hes-what-exactly-is-lenovos-tablet-

strategy.htm?pgno=3&itc=refresh[Accessed 5 October 2011]

Lenovo, 2011, Lenovo's commitment to social responsibility. [Online] Available

at: <http://www.lenovo.com/social_responsibility/us/en/index.html > [Accessed

5 October 2011]

Wong, W.M., 2011, Acquisition of Medion. [e-book] Available through: Lenovo

website <http://www.lenovo.com/ww/lenovo/investor_relations.html >

[Accessed 5 October 2011]

Parrish, K. 2011, Lenovo Says Apple Can't Dominate Tablet Market

Forever.[Online] Available

at<http://www.tomshardware.com/news/ThinkPad -iOS-honeycomb-

Yan g-Yuanquing-Tablets,13266.html> [Accessed 5 October 2011]

Rodriguez, A., 2011, The Top 5 Reasons to Buy a Tablet . [Online] Available

at:<http://www.pcworld.com/article/219883/the_top_5_reasons_to_buy_

a_tablet.html> [Accessed 6 October 2011]