Lenovo: A Chinese Dragon in a Global Village SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Lenovo: A Chinese Dragon in a Global Village
The fast rise of Lenovo among its competitors in the computer industry raised a series of questions regarding the sustainability of its competitive position, as well as the choices it had made in its efforts toward globalization. First, how could Lenovo establish and sustain a leadership role in an industry where competitive positions were increasingly unstable? Next, how could the Chinese firm build a solid competitive position in an industry characterized by smaller and smaller margins? Finally, after the acquisition of IBM's PC business and the subsequent accelerated international expansion, could Lenovo still be considered an entirely Chinese entity or was it a truly global enterprise of Chinese origin?A video interview with Lenovo's strategy and corporate development vice-president, Lenovo: A Chinese Dragon in the Global Village - DVD, is also available. Author Pascal Vidal is affiliated with Skema Business School and Pierre-Xavier Meschi is affilaited with IAE Aix-En-Provence
Swot Analysis of "Lenovo: A Chinese Dragon in a Global Village" written by Pascal Vidal, Pierre-Xaxier Mesch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Lenovo Chinese facing as an external strategic factors. Some of the topics covered in Lenovo: A Chinese Dragon in a Global Village case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Lenovo: A Chinese Dragon in a Global Village casestudy better are - – increasing commodity prices, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Lenovo: A Chinese Dragon in a Global Village
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lenovo: A Chinese Dragon in a Global Village case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lenovo Chinese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lenovo Chinese operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Lenovo: A Chinese Dragon in a Global Village can be done for the following purposes –
1. Strategic planning using facts provided in Lenovo: A Chinese Dragon in a Global Village case study
2. Improving business portfolio management of Lenovo Chinese
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lenovo Chinese
Strengths Lenovo: A Chinese Dragon in a Global Village | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lenovo Chinese in Lenovo: A Chinese Dragon in a Global Village Harvard Business Review case study are -
High switching costs
– The high switching costs that Lenovo Chinese has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Highly skilled collaborators
– Lenovo Chinese has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Lenovo: A Chinese Dragon in a Global Village HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Lenovo Chinese is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Lenovo Chinese in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Lenovo Chinese is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Lenovo Chinese has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Lenovo: A Chinese Dragon in a Global Village - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Lenovo Chinese has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lenovo Chinese to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Lenovo Chinese is present in almost all the verticals within the industry. This has provided firm in Lenovo: A Chinese Dragon in a Global Village case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Lenovo Chinese is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Lenovo Chinese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lenovo: A Chinese Dragon in a Global Village Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Lenovo Chinese in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Lenovo Chinese has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lenovo Chinese has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Innovation driven organization
– Lenovo Chinese is one of the most innovative firm in sector. Manager in Lenovo: A Chinese Dragon in a Global Village Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Lenovo Chinese are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Lenovo: A Chinese Dragon in a Global Village | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lenovo: A Chinese Dragon in a Global Village are -
Workers concerns about automation
– As automation is fast increasing in the segment, Lenovo Chinese needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, Lenovo Chinese has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Lenovo Chinese even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Lenovo Chinese products
– To increase the profitability and margins on the products, Lenovo Chinese needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lenovo Chinese supply chain. Even after few cautionary changes mentioned in the HBR case study - Lenovo: A Chinese Dragon in a Global Village, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lenovo Chinese vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lenovo Chinese is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lenovo: A Chinese Dragon in a Global Village can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Lenovo Chinese has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Increasing silos among functional specialists
– The organizational structure of Lenovo Chinese is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Lenovo Chinese needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lenovo Chinese to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Lenovo: A Chinese Dragon in a Global Village, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Lenovo: A Chinese Dragon in a Global Village, it seems that the employees of Lenovo Chinese don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Pascal Vidal, Pierre-Xaxier Mesch suggests that, Lenovo Chinese is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study Lenovo: A Chinese Dragon in a Global Village has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lenovo Chinese 's lucrative customers.
Opportunities Lenovo: A Chinese Dragon in a Global Village | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Lenovo: A Chinese Dragon in a Global Village are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lenovo Chinese can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Lenovo Chinese can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Lenovo Chinese can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Lenovo: A Chinese Dragon in a Global Village, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Lenovo Chinese can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Using analytics as competitive advantage
– Lenovo Chinese has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Lenovo: A Chinese Dragon in a Global Village - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lenovo Chinese to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lenovo Chinese can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Lenovo Chinese to increase its market reach. Lenovo Chinese will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Lenovo Chinese to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Lenovo Chinese has opened avenues for new revenue streams for the organization in the industry. This can help Lenovo Chinese to build a more holistic ecosystem as suggested in the Lenovo: A Chinese Dragon in a Global Village case study. Lenovo Chinese can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Lenovo Chinese can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Lenovo Chinese can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Lenovo Chinese can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lenovo Chinese in the consumer business. Now Lenovo Chinese can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lenovo Chinese to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lenovo Chinese to hire the very best people irrespective of their geographical location.
Threats Lenovo: A Chinese Dragon in a Global Village External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lenovo: A Chinese Dragon in a Global Village are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Lenovo Chinese in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Lenovo Chinese needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lenovo Chinese can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Lenovo Chinese with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Lenovo Chinese high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lenovo Chinese can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Lenovo Chinese is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Lenovo Chinese.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lenovo Chinese can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Lenovo: A Chinese Dragon in a Global Village .
Increasing wage structure of Lenovo Chinese
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Lenovo Chinese.
Regulatory challenges
– Lenovo Chinese needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Lenovo: A Chinese Dragon in a Global Village, Lenovo Chinese may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Lenovo Chinese can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lenovo Chinese in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Lenovo: A Chinese Dragon in a Global Village Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Lenovo: A Chinese Dragon in a Global Village needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Lenovo: A Chinese Dragon in a Global Village is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Lenovo: A Chinese Dragon in a Global Village is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Lenovo: A Chinese Dragon in a Global Village is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Lenovo Chinese needs to make to build a sustainable competitive advantage.
