The External Competitive Environment at Lenova

1593 Words6 Pages
The proper planning and execution of strategy is crucial for any company to develop, especially when the industry is extremely competitive or volatile. Industry evolution brings change in sources and nature of competition (Porter 1979). This essay will analyse the external competitive environment and critically evaluate the strategies employed by Lenovo, a Chinese technological corporation, in dealing with the overall declining trend of the PC (personal computer) market.

Case study overview
Recent years saw the worldwide PC market growth rate undergoing a drastic plummet (Arthur 2013). The latest statistics from market research firm Gartner, showed an 8.6 percent decline in PC sales in the third quarter of 2013, with shipments dipping for sixth consecutive quarters (Hachman 2013). This trend underscored challenges confronting PC manufacturers as customers favour mobile devices such as tablet computers and smartphones.
After suffering a US$226 million loss in 2008, Lenovo attempted to improve its profitability through innovation and efficiency by initiating the Protect and Attack strategy in 2009, which aimed to guard its core PC business and strived to compete in emerging markets with high levels of growth (Lenovo 2010). In response to the recent decline in PC sales, Lenovo placed emphasis in executing the Protect and Attack strategy by evolving and innovating its product portfolio, conducting strategic acquisitions and implementing novel marketing schemes.
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