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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, geopolitical disruptions, wage bills are increasing, 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%, increasing transportation and logistics costs, 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 -
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Lenovo: A Chinese Dragon in a Global Village firm has clearly differentiated products in the market place. This has enabled Lenovo Chinese to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Lenovo Chinese to invest into research and development (R&D) and innovation.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Lenovo: A Chinese Dragon in a Global Village Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
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.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Lenovo Chinese digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lenovo Chinese has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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 -
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 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Lenovo: A Chinese Dragon in a Global Village HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Lenovo Chinese has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Lenovo Chinese has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Aligning sales with marketing
– It come across in the case study Lenovo: A Chinese Dragon in a Global Village that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Lenovo: A Chinese Dragon in a Global Village can leverage the sales team experience to cultivate customer relationships as Lenovo Chinese is planning to shift buying processes online.
Need for greater diversity
– Lenovo Chinese has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Lenovo: A Chinese Dragon in a Global Village, in the dynamic environment Lenovo Chinese has struggled to respond to the nimble upstart competition. Lenovo Chinese has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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 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.
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 -
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.
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.
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.
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.
Buying journey improvements
– Lenovo Chinese can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lenovo: A Chinese Dragon in a Global Village suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Lenovo Chinese to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lenovo Chinese can use these opportunities to build new business models that can help the communities that Lenovo Chinese operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lenovo Chinese in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Leveraging digital technologies
– Lenovo Chinese can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Lenovo Chinese can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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 -
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 .
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.
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 .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Lenovo Chinese will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Lenovo Chinese business can come under increasing regulations regarding data privacy, data security, etc.
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.
Consumer confidence and its impact on Lenovo Chinese demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.