Strategic Strategy Of Lenovo

5. In trying to become a global brand, does Lenovo have a problem coming from China?

A cost leadership strategy focuses primarily on “producing products and/or services that are the lowest in the industry” (Turban, Rainer, & Potter, 2003). This type of organization forms business alliances that support their inventory management through computers and computerized purchasing. A differentiation strategy focuses on being unique within the industry and provides high-quality products at a competitive price (Turban, Rainer, & Potter, 2003). These types of companies “provide their customers with a

Considering the conducted research and analysis, it can be clearly seen that the international strategy is not effective, that is why, needs to be fixed. Moreover, the company has a success in the local market, so it may be reasonable to put the efforts to promote inside the country.

The cost leadership strategy seeks to improve profit margins by bringing down the costs of producing while enabling the organization to still charge market prices. They also focus on increasing the market shares through lower pricing, enabling the organization to continue to reach profits because of reduced costs. As with any organization the goal is to minimize cost directly to the organization providing the delivery of products or services. According to Barney (2007) low cost leadership strategy takes pride in initiating its costs advantage abilities to charge lower prices while reaping the rewards of higher profits.

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

In cost leadership a firm will set out to become a low cost producer in its industry. A low cost producer must find and exploit all sources of cost advantage. If a firm can achieve and sustain overall cost leadership then it will become an above average performer within its industry. The sources of cost advantage are varied and depend upon the

Change in one of the market risk may result in changes in another, which can affect how Walmart price the product for consumers and it also affect the value of the cost leadership initiatives. By using cost leadership to leverage operating expenses, increasing productivity and sourcing goods globally at low, low cost will maximize returns on capital invested. Walmart execute a tight financial expense control and a strong inventory management along with cost leadership and financial discipline will gives Walmart more profitable returns (Walmart 2010 annual report).

Cost leadership strategy is used by firms to surpass their competitors by reducing their cost from production of goods or services and is part of the business level strategy (Hills et al, 2007). There are four factors that influence a company’s ability to build and sustain a competitive advantage: efficiency, quality, innovation and responsiveness to customers. These factors allow a company to (1) differentiate its product offering to create greater perceived customer value and (2) lower its cost structure, which will then build a competitive

Also, they have very efficient logistics and a low cost base such as labor, materials and facilities (Ibid, 1985). Essentially, if a firm can achieve and maintain cost leadership, it can obtain above average performance whilst the prices are still affordable in that industry. Hence, the cost leader does not try to be the industry innovator, it seeks to position its products to appeal to the average customer taste. The aimed goal is to increase efficiency and lower its costs in relation to competitors. Some of the

Lenovo’s biggest business is PCs and it is the world’s number 1 PC maker. But the sales of PCs isn’t growing which makes it imperative for Lenovo to focus on its mobile phone segment in order to be a tech leader.

The main objectives of this report is to identify and critically evaluate the strategies used by a chosen Multinational Company (MNC) to internationalize. Firstly, this report will clearly analyzed the current internalization strategies that being used by the chosen Multinational Company (MNC) which is Lenovo Group Limited and its relationship with the theory of internalization.

The cost Leadership strategy is able to provide products and services at a lower rate than competitors. The reason for Amazons strength is the fact that Amazon has a large variation of products to achieve economies of scale.

The purpose of this writing is to explain the cost/price leadership strategy of a company that has established a strong base in spite of facing competition from various established brands. The company’s focus strategies as well various aspects of strategy clock such as economies of scale is explained. It talks about the key resources the company employs in this cost leadership strategy to cover the market segment, the threats it faces in the foreseeable future with regard to the market share, price and innovation. Also, the counter measures applied by the company in order to counter balance the opportunities, threats and maintaining sustainability.

A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.

Strategic retail management plays a vital role in developing the success of a company’s brand on the market. It supports the company in its bid to enter into different markets and successfully meet the market demand creating an opportunity for the company to boost its performance and increase its sales position. It also supports the company in creating a competitive edge developing it above the ranks in the competition. Lenovo for the past years since its coming into the market has grown to become China’s biggest PC maker. It has also gained recognition in the international market to become the third largest PC maker worldwide coming third to Dell and Hewett Parkard standing at a $12 billion in annual revenues (Quelch & Knoop, 2006, p.1). The company focused on its local China market for a long time developing strength for its brand locally before embarking on a bid to have it gain global recognition. The desire to go global was backed by many needs including the need to have brand development strategies that would have the brand succeed on the international market. The entry of Dell into China and Asia created pressure on the company on its local market leading to an effect on the sales the company registered. It is