Lenovo is the number one PC maker in Chinese PC industry which gained 35.8 percent of market share in 2007. In recent year, it started to operate businesses out of greater China such as Asia Pacific, Americas, Europe, Middle East and Africa.
Lenovo’s current pillar strategy is that strive to grow faster and more profitably than the industry by delivering best-engineered PCs and unequaled ownership experience in the global PC market.
Since the Lenovo decided to go international, the Europe becomes as part of battle for Lenovo to explore. In this paper, the market of Lenovo in Europe will be focused on the UK.
The growth of in UK was achieved through improve sales to large firms and growth ...view middle of the document...
6% PC market share, which is in the third position after Dell (16.8%) and HP (15%)” (Fan, 2006, p 15-16). Today, Lenovo holds 35.8% of the market share in the second quarter 2007 in China (Technology…, 2007). In 2008, “Lenovo becomes the China’s first non-monopoly private company to be ranked among Fortune top 500 enterprises” (Lenovo leaps…, 2008).
In 2003, Lenovo defined globalization as company goal for the following year company development. There were two reasons for Lenovo go global. One was Lenovo has 30% share of Chinese market. It has nearly 20% share ahead of HP. Lenovo therefore realized that their opportunity for further domestic expansion was quite limited.
The second one was that the global PC market was estimated at around $200 billion, it could be an immense potential for Lenovo (Shenzhen Daily, 2004 as cited in Liu, 2007). There were two ways for Lenovo to globalize. One was to grow organically. Another way was expand through mergers and acquisition. For the first way, Lenovo was aware. Thus, they decided to go global with second approach (Liu, 2007).
There were two events which could stand for Lenovo decided to go abroad. First, due to Lenovo was lacking of brand recognition, “it adopted a new brand name, Lenovo. The first two characters, ‘Le’, were taken from ‘Legend’, to reflect its heritage, and ‘novo’ (‘new’ in Latin) to signify the ‘spirit of innovation’ that is central to the company’s mission” (Liu, 2007, p 573).
The second event can be described as a milestone of Lenovo in its history. It acquired IBM’ PC business for $1.75 billion in 2004. Although the creator of world’s largest PC company, Michael Dell commented simply: “it won’t work” (Johnson, et al.. 2008), the result is that “Lenovo’s sales grew 17 percent year-on-year to approximately $16,352 million during the 2007/08 fiscal year especially Lenovo’s sales in the Americas grew 9 percent driven by strong growth in the transaction business” (Lenovo, 2008, p 16-17). Besides, Lenovo adopts five pillar strategies in order to implement globalization. They are Pursue operational excellence, Enhance customer intimacy, Win in priority businesses, Gain scale profitably, and Build the brand (Lenovo, 2008).
For the global market, Lenovo focuses on five segments all over the world in order to adopt international expansion. They are Greater China, Asia Pacific, Americas, Europe, Middle East and Africa. Lenovo PCs would be directed at consumer market and the majority of small and medium-sized business.
That is the target market of Lenovo. For the European market, Lenovo saw a huge potential of PC sales in the UK because it has largest PC market in the Europe which generated 21.4% of regional market’s revenue especially the desktop PC (PCs…, 2006). Therefore, this paper aims to analyze the potential of the UK’s PC market which can provide an opportunity for Lenovo to gain the largest market share in the UK.
Five aspects will be issued
* Identify Lenovo’s strategic...