Core Competencies These entail organization proficiencies in efficient resource allocation and effective coordination to generate competitive edge difficult to duplicate. Lenovo did so by integrating resource-based view strategy with diverse production skills and access to emerging markets to drive its initial success. The strategic capabilities that pushed Lenovo include association with values of distinctive innovation and management capabilities (Johnson et al, 2008, p. 102). a) Value These entail the benefits perceived by customer and Lenovo provide through low cost, innovation and comparable quality with competitors. Lenovo competes based on low price, as it can produce with a lower cost structure by leveraging on the components suppliers in China giving quality that is comparable to multinational competitors (Xie & White, 2004, p. 412). Competitive advantage is enhances through customer support excellences, high quality and low-cost innovation. Innovation summary is provided: Table 5: Summary of Lenovo’s product features innovation (Xie & White, 2004, p. 412) b) Rarity Rarity can be in the form of a tangible or intangible resource. It is likely to be short-lived if attributes are not maintained (Johnson et al, 2008, p. 102). Lenovo achieved rarity through its brand name and intellectual property from IBM-PC division (Callahan, 2005). Such made Lenovo-IBM co-branding a powerful combination. c) Inimitable The inimitable strategic capabilities are durable and unique
There are a number of ways a business can gain a competitive edge: excellent service, top of the range products, professional sales techniques and efficient and effective marketing strategies can contribute to the business and make us a market leader. Listening to our customers and acting on feedback can not only keep our loyal customers but encourage new customers. Having a recipe that incorporates all the above is a simple but effective method.
As a global leader in the PC market, Lenovo’s success rests on its ability to deliver consumer centric innovations in products that deliver a blend of mobility, performance and price. Design is an infrastructural element that helps define every aspect of a company, including Web site, stores, customer support, packaging, and messaging as well as its products. Lenovo has a well-earned industry reputation for delivering superior quality products. Quality is a fundamental component and commitment to customer satisfaction by delivering products that are of superior quality to comparable offerings from their competitors is the key to Lenovo’s success. In recent years, Lenovo relies heavily on local manufacturing strategies to shorten
market in that sense, and not use it in the more general sense of a marketplace
Adapted with the permission of Michael E. Porter from Competitive Advantage: Creating and Sustaining Superior
Riordan Manufacturing is a leader in the industry of plastic injection molding. Business strategies require assurance that the organization can anticipate business conditions for the future that will improve performance and profitability. Organizations should create a strategic framework for a noteworthy achievement. The framework entails formulating a mission that defines the business product of the organization. This paper will discuss competitive advantages Riordan has in common with Nike and T–mobile and what Riordan can use to improve innovation. Competitive strategies can have an effect on the long term organizational performance. Riordan will also
The one constant capability with companies from emerging markets is their willingness and capability to learn. Transforming this learning and the abundance of low cost resources allows these companies to execute a low cost strategy. This low cost strategy has provided the inlets into both emerging and developed markets. Using a strict resource based analysis consisting of value, rarity, imitability and organization (VRIO), suggest such an imitation strategy will lead to parity and average returns. An example of this would be Lenovo’s ability to imitate other successful PC manufactures capabilities. Lenovo model adds value but their resources are not rare which means it can be imitated and exploited by another firm. If this is the case why can Lenovo continue to grow?
Lenovo Group Ltd. (Lenovo) is a Chinese multinational technology corporation that founded in Beijing in 1984. Specifically, Lenovo is one of the top enterprises that produces and sells consumer electronics and computer hardware, with a focus on producing personal computer (PC). Currently, the headquarter of Lenovo is in Beijing, China, with a second headquarter that located in Morrisville, North Carolina, United States. As a multinational enterprise, Lenovo currently have operations in more than sixty countries and has its products sold almost all over the world.1 Becoming a multinational enterprise especially making it to the top of the industry is not an easy thing for any company due to numerous predictable and unforeseen challenges. However, Lenovo has successfully expanded its business and reached to the top. Therefore, the present paper aims to analyze Lenovo’s operational/managerial strategies and provide a better sense of what has Lenovo done for reaching to the current position in the global market.
Innovation, localization and customization, and an efficient and environment-friendly global supply chain are the pillars of growth for Lenovo. Cost-innovation, efficient execution of strategy and a strong presence in China support its global endeavours. In-house manufacturing reduces costs and strategically located manufacturing facilities in China, Mexico and India enhance the efficiency global supply chain. It spends adequately on R&D to move ahead with the times. The R&D centres are located in North America, Japan, and China. Joint ventures and local-level innovation supports its customer oriented focus. Over the years, it has leveraged its strong presence in China, pursued incremental innovation and used inorganic growth strategies to its advantage (Ahrens & Zhou 2013). Further, geographical diversity helps it avoid overdependence on a particular market or product. Cultural diversity, supported by an inclusive organisational culture, facilitates Lenovo’s efforts to build a sustainable competitive advantage (Lenovo
All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved. By Sun Tzu
Strong position as a technology leader – Even if Lenovo is ranked as the world’s No. 1 PC maker it would not be able to achieve success without being a mobile tech leader. The smart-phone business will prove to be a key for success for Lenovo
As the main reason for Lenovo using the new strategy is to attain competitive advantage, the company first have to gain economic of scale which can done by reducing production cost and selling product with lower price. As Lenovo is manufacturing their product in China which is one of the low cost country in the world, they can easily cut down their production cost there. Hence, the pressure of global integration in cost reduction is identified there. The advantages of global integration for Lenovo is the company can achieve global efficiencies and also improving the quality of product and processes. As high quality product will promotes global brand recognition and gives rise to customer preference and efficient international marketing programs. This will eventually create economies of scale, which can result in lower operational costs, higher quality standardized product and homogenization consumer
Product Offering: Over the years, the features that are demanded by consumers has drastically changed and assuming that change would be constant, Lenovo can invest heavily in research and development of new products and technology offering features such as mobile form factor and high-speed internet access. Lenovo also needs to form strong partnerships with other manufacturers and retailers so that it can bundle products together to increase the total value for the user in a single
Lenovo’s typical brand proposition is ‘more for the same’. Therefore, it has to have some competitive advantages that can leave customers greater value than the other companies. And the following factors are Lenovo’s main competitive advantages.
The market itself is growing at a greater than 50% rate for the past couple of years.
A successful brand is the most valuable resource a company has. In fact, one authority speculates that brands are so valuable that many companies include a “statement of value” addendum to their balance sheets to include intangibles such as the value of their brands. Brands are used as external cues to taste, design, qualify, prestige, value and so forth. In other words, consumers associate the value of a product with the brand. For example, the value of Kodak, Sony, Coca-cola, Toyota and Microsoft is indisputable. One estimate of the value of Coca-cola, one of the world’s most valuable brand places it at