Module Title: Strategic Marketing Management

Module code: NBS-7025A

Academic year: 2021-2022
Student name: HUYEN Thi Thanh PHAM
Student number: 100367197
Word count: 3106 words
Executive Summary
The growth of the information technology industry in general, and the computer industry in particular, has
been one of the world economy's positive indicators over the last two years. According to Catalyst, the
personal computer market concluded 2021 well, with fourth-quarter shipments exceeding 90 million for
the second consecutive year. Thus, technology organisations must have a strategic plan in place to have
an understanding of the market and their competitors in order to build a development strategy. Lenovo is
a technology business that manufactures a variety of goods, including personal computers, smartphones,
and other technological solutions. However, this study will analyse and provide guidance for Lenovo's
PCs area, as this is one of the company's strengths. While we can identify good conditions for Lenovo's
growth in terms of revenue and market share through situational analysis, Lenovo currently lacks brand
awareness in comparison to other competitors, particularly in the European market. The research suggests
that the corporation continue to focus on gaining market share, diversifying product lines, and using
marketing and sponsorship tactics to improve brand perception.
 I. INTRODUCTION: COMPANY OVERVIEW

Lenovo, a Chinese multinational technology company that is also a spinoff of Legend Group, was
incorporated in 1984 by eleven scientists who had the vision to establish a company to offer the benefits
of information technology to the Chinese community. It has now two headquarters, one in Beijing, China
and the other in Morrisville, North Carolina, USA. Lenovo delivers a full portfolio of PCs and tablets,
monitors, accessories, smartphones, smart home and smart collaboration solutions, augmented and virtual
reality, commercial Internet of Things, software, services, and smart infrastructure data centre solutions
worldwide. Lenovo serves more than 180 markets, and it owns the majority of its facilities, giving
unrivalled scale, efficiency, and control of its supply chain. It includes more than 30 manufacturing
facilities, including in-house, joint venture, original design manufacturer, and contract manufacturer sites
in Argentina, Brazil, China, Germany, Hungary, India, Japan, Mexico, and the USA.

II. SITUATIONAL ANALYSIS

1. PESTEL ANALYSIS

1.1 Political Factors

Since 1970, the Chinese government has been committed to maintaining a stable political environment,
which has aided the country's economic growth. A democratic political environment and a well-
developed governance system improve the business climate for multinational corporations like Lenovo.
Additionally, the Communist Party of China stated in its manifesto that it desires scientific growth for
China, which simplifies Lenovo's expansion plans. Lenovo is a global company, and as such, its business
strategy must be compatible with both international and local politics.

1.2 Economic Factors

The economic crisis was a low point for all businesses, and Lenovo was one among those that suffered.
But after surviving that period, thanks majorly to lenient Chinese laws that helped the company
overcome, Lenovo has since been rising. This was possible due to the economic conditions that favour
trade and the growth of technology. China is one of the leaders in the IT market, and Lenovo is a major
company from China. The IT market is constantly growing, and this, in turn, helps Lenovo to grow. On
the global level, most countries provide benefits that help in the growth of the IT market, thus facilitating
the development of Lenovo. Moreover, to take advantage of economies of scale, it has established
manufacturing facilities in low-labour-cost nations such as China, Argentina, and Brazil, which enables it
to maintain a competitive edge and minimise price volatility in the event of an economic shock.

1.3 Social Factors

The Covid -19 epidemic has negatively affected most business areas, production stagnation, supply chain
disruptions, high freight rates, etc. However, in that context, the Technology Information industry still
emerges as a bright economic spot during the epidemic season.

Figure 1. Global spending on devices (PCs, tablets, mobile phones, and printers) from 2012 to 2022 (in billion U.S. dollars)
(Source: statista.com)
As we can see from the table, 2021 witnessed a dramatic increase in global spending on technical devices,
and it predicts that the demand for 2022 will be even higher than that in 2021. According to Ishan Dutt,
Senior Analyst at Canalys: “2021 was a watershed year in the history of the PC market, with the PC’s
place at the centre of work, learning and leisure truly cemented.”

1.4 Technological Factors

This is the period of current technology breakthroughs; businesses constantly produce new items and
update existing ones. Those who cannot keep up, such as Blackberry and Nokia, are either liquidated or
fall behind in the race. Lenovo, too, must accomplish this feat; it must develop and seek strategic par tners
to establish a reputation for product quality and distribution. The company is associated with innovation
 and quality. While evolution is critical, it is even more critical to build talents that are difficult to
replicate, as this provides businesses with a competitive advantage.
1.5 Legal Factors
Lenovo is subject to several rules due to its multinational company. These rules vary by state and country,
and compliance is more than necessary everywhere. Lenovo is subject to various regulations relating to
taxation, labour, intellectual property, and even the environment, all of which must be adhered to. Any
litigation might result in unpredictably huge fines, damaging the financial sustainability of a worldwide
organisation. Thus, legal risks are a significant aspect of Lenovo's macroeconomic climate, resulting in
substantial pressures.
1.6 Environmental Factors
Sustainability is a critical theme in the twenty-first century. Both large and small businesses invest in
sustainable practices to cut costs and build a sustainable brand image that can be highly beneficial.
Lenovo has been devoted to sustainability from the start, and in 2016 it reaffirmed that commitment by
increasing its carbon emission reduction target to 40%. Apart from these initiatives, Lenovo concentrates
its efforts on extending its renewable energy portfolio and reducing energy use throughout its supply
chain.

2. SWOT ANALYSIS

STRENGTHS WEAKNESS
- Global presence: Data published in 2022, it serves - Poor brand perception in the developed economies:
more than 180 markets all over the world. Lenovo’s primary market is Asia, where it sells most
- Mergers and acquisitions of its production. The company finds it hard to access
- Strong sale position in China US and European markets as its brand perception is
- Good marketing and distribution strategies low.
through a network of channel partners, retail stores, - Low differentiation: Apart from the low price,
Teleweb. Lenovo products are little differentiated from
- Lenovo authorised dealers across the globe helps it competitors’ products and are at competitive
to lead disadvantage if the price offered by competitors is
- Strong R&D, which taken over from IBM lower
- Diversification of products - After-sale services
- Low-cost production
- International workforce
- Mass production capacity
OPPORTUNITIES THREATS
- Increasing global demand for PC: Since the onset - Competition threat from both local
of the pandemic, a larger than normal proportion of and international markets/ Price war
PCs shipped have been new additions to the installed - Software piracy and clone market
base rather than replacement devices, especially in - Fluctuating foreign exchange rate
areas such as education and remote work
- Competitors alliance
- Increasing governmental spending on IT
- European markets’ exploration

Table 1. SWOT analysis of Lenovo

3. MARKETING MIX
3.1 Product
Lenovo's strategy has been to provide a varied range of technology-driven products to address the varying
needs of the business sector. It has offered machines and upgraded them on a continual basis. It has
strayed into functioning frameworks and consistently made adjustments to them to stay up with the
business sector. The company's goods are renowned for their durability and reliability, earning the
company an enviable reputation among its consumers.

3.2 Price
Lenovo's pricing strategy is based on the different levels of consumers, so the company has developed a
variety of prices for its products. As a result of its exports and wide range of products, Lenovo has been
able to avoid becoming embroiled in the price wars that have plagued the domestic market in recent
years. The most crucial consideration for Lenovo is ensuring the price and brand value balance. Lenovo
runs the risk of losing its customers' trust if its products are sold at too low a price. On the other hand,
Lenovo risks losing customers to Dell and HP if its products are overpriced.

3.3 Place and distribution

Lenovo has exclusive showrooms as well as multi-brand showrooms. It uses modern retail, E-commerce
chains, and many IT and peripheral shops located all over the country to promote its products. Most of
Lenovo's sales are conducted via third-party channels, such as authorised distributors. Individual retailers
and channel dealers receive their supplies from these distributors, then distribute them to others.
Additionally, Lenovo sells its products via modern retail outlets and online channels. Lenovo has been
 able to gain a worldwide audience for its products thanks to the channel marketing concept. Now, Lenovo
has 60000 employees and operates in 160 countries.

3.4 Promotion
Lenovo has hit the right promotional mix by using the proper marketing communications and by targeting
geeky customers who enjoy a little zing in the products they use. It has always advertised its products as
being a good match for the needs of its customers, and as such, they have always been successful.
Lenovo’s goal is to make machines that do the work for their customers. The company uses a variety of
ATL and BTL channels to reach its target audience.

4. COMPETITORS ANALYSIS
Some of the main competitors of Lenovo are briefly summarised in the table below.
Company name Market Cap Company overview
Apple Inc. $1.4 trillion Apple is a technological company that makes and sells a wide range of
consumer electronics and The Mac computers are one of the company's
most popular products. Apple's revenue from services has also
skyrocketed.
Samsung Electronics Co. $325.4 billion Consumer electronics, information technology, and
Ltd. telecommunications are just some of the industries it serves. This
South Korean tech giant is best known for its Galaxy smartphone lin
but not personal computers.
Dell Technologies Inc. $31.2 billion Dell is a well-known maker and supplier of computers. Direct
marketing is its most distinguishing feature. Its near-perfect supply
chain enabled it to keep costs low and delivery times short. Dell
became one of the world's leading vendors due to its low prices and
elastic response to market conditions.
HP Inc. (HPQ) $21.3 billion HP was reborn in 2002 as a result of the merger of Compaq's original
retail channel and HP's conventional corporate channel. HP has always
been a trustworthy corporation, and its healthy and pleasant reputation
has helped it maintain a high level of competitiveness. Since 1996, HP
has been one of the top five PC vendors. HP has devoted clients, a
distinct identity, and a sizable market.
Table 2. Lenovo’s main competitors
5. SUMMARY OF THE FINDINGS
As illustrated in the PESTEL framework, practically all external factors contribute to Lenovo's operation
and expansion. Lenovo's SWOT analysis indicates that it has more strengths and opportunities than it
does weaknesses and threats. Lenovo's market position dictates whether it will be a growing organisation,
and hence the overall orientation of the strategy it chooses should be growth-oriented. Its growth plan
should place a higher premium on enterprise development and market share expansion than on product
diversification or marketing hurdles. Moreover, it should focus on improving brand perception.

III. OBJECTIVES

Following SMART (Specific, Measurable, Achievable, Realistic and Timebound) objectives which are
formulated using 5 S’s objectives from SOSTAC Planning system is suitable for Lenovo PCs.
 Sell: Assume the role of the largest shipping vendor. By the end of 2022, the business expects to
have shipped 93 million desktop, notebook, and workstation computers worldwide ( increase
1,000,000 units compared to 2021) (See Appendix 1)
 Serve: Improve after-sales service by continuing to enhance Support Services, Services and Asset
Recovery Services, Managed Services. By the end of 2022, the performance across three
segments contributed to a rapid 41% growth in deferred revenue (increase 10% compared to
2021 – according to Lenovo annual report). By the end of 2022, the customer satisfaction should
be 80% (increase 2% compared to 2021) (See Appendix 2)
 Speak: By the end of 2022, increased engagement on social platforms 20% over last year.

 Save: Use cost-effective targeted communication strategies and Reduce marketing cost per sale
by 5% by end of 2021.
 Sizzle: improve brand image by continuing to execute its strategy to become the leader and
enabler of Intelligent Transformation and increase FORTUNE’s annual Global 500 List ranking
from 159th in 2021 to 100 in 2022.
IV. STRATEGY
1. SEGMENTATION

Lenovo segmented the global market into four distinct segments: the Chinese market, the North American
market, the Europe, Middle East, and Africa (EMEA) market, and the Asia Pacific-Latin American market.
Between these four segments, the Chinese market has a sizable population. However, entering North America
is relatively challenging due to the region's greater loyalty to well-known brands such as HP and Dell. Lenovo
consolidated its marketing activities across nations and areas with comparable populations and product usage
trends.
According to David Roman, a former Lenovo chief marketing officer, the company's primary target
demographic looks to be the 18-35 age group. When it comes to computer use, Generation Z is more likely to
use it for schoolwork and online gaming, while Generation X is more likely to use it for work and socialising
In the family life cycle, Lenovo laptops can be regarded as being economical but still luxurious; sophisticated;
and intelligent, encompassing and catering to a wide range of people. So, it doesn't matter if you're married,
single, have kids, or use an outdated Lenovo laptop; the company's services are available to everyone.

When it comes to psychographic segmentation, Lenovo recognises that consumers in China are more
concerned with the product's performance, whereas consumers in the United States are more concerned with
the spirit conveyed by the product. Additionally, the majority of Chinese PC buyers enjoy comparing products
before parting with their money, but European consumers want to pursue high-quality products and make
speedy decisions.

2. TARGETING

Due to the COVID-19 outbreak, millions of people have been forced to work from home, increasing
workers' and businesses' reliance on digital technology, enabling them to handle personal and professional
activities via mobile phones, laptops, and personal computers, resulting in a boom in sales of PCs,
displays, and accessories. Consequently, it is evident that the primary target audience consists of young
people between the ages of 18 and 36 who require it for work purposes, students, or skilled gamers.

3. POSITIONING

Lenovo, as demonstrated in the SWOT analysis, has a number of strengths but a weakness in mature
markets due to low perception. Thus, in addition to retaining a competitive edge and benefiting from a
large market share, Lenovo must conduct brand awareness efforts. Lenovo's marketing strategy is
primarily focused on three factors: high-end, mid-range, and middle-high-end product combinations for
optimal market placement. Not only does middle and high-end positioning provide market consistency,
but it also helps establish the image and status of Lenovo products in the minds of consumers.
 Figure 2. Perceptual map of recommended positioning of Lenovo PCs (Author generated)

V. TACTICS
1. PRODUCT

Lenovo's product strategy should be largely consistent with its target market and positioning. When it
comes to Lenovo's PCs, market research indicates that their refrigerators are mostly targeted at the middle
and high-end segments. Lenovo holds a 65% market share in high-end products, a 40-50% market share
in mid-range items, and less than a 10% market share in low-end products. By segmenting the market,
interacting with consumers, and identifying unmet demand, you can gain an advantage over competitors
by producing entirely new items from the market, allowing you to further acquire the market's prime
share. Lenovo should continue its campaign to capitalise on unmet customer demand, thereby pre-
empting competitors from developing wholly new goods and capturing an exclusive piece of the sector
market.

2. PRICE

Lenovo should maintain the differential pricing strategy that has enabled it to navigate smoothly through
the economy of excess capacity, as Lenovo's pricing strategy is aligned with brand value, physical value,
and the incorporation of additional digital technology features achieved through the IBM merger. These
qualities set Lenovo apart from its competitors and instil an independent cognitive value in consumers'
brains (Dowling 2005).
 3. PLACE AND DISTRIBUTION

Lenovo should push sales through E-commerce platforms like as Flipkart, Amazon, Ebay, and Croma, as
well as through its own website, in light of the present pandemic. Additionally, Lenovo should continue
to maintain unique showrooms in various places from which items can be purchased directly, as well as
multi-brand showrooms that enable comparisons of product features, pricing, and other characteristics
between two or more brands. Additionally, the organisation should continue to function via channel sales
channels such as dealers or retailers such as Costco, Walmart, and Bestbuy, among others

4. PROMOTION

The company should continue to focus on digital marketing, especially Social Media marketing. Studies
have shown that Social media marketing is highly effective for gen Z and gen X (Silvia 2019). Due to the
company's success in sponsoring the Olympics, it should leverage several platforms to establish distinct
tactics that appeal to a diverse range of audiences. Lenovo, for example, can expand its brand in Europe
by focusing on football, Formula One, cricket, skiing, auto racing, and other winter sports competitions.
Additionally, the corporation should concentrate on the NBA in North America, while in China, Lenovo
should continue to sponsor table tennis and badminton. Allocating resources to sponsoring international
events that need less investment but give greater returns would be a prudent and practical choice for the
company, as sports marketing programmes clearly benefit the Lenovo Company. Apart from worldwide
sports marketing, the corporation must promote low-cost marketing channels such as sponsorship of
popular television serials, participation in school and college sports and cultural events, and active
participation in charity activities conducted by various communities.

VI. EVALUATION & CONTROL

To guarantee that the marketing strategy's objectives are met, it is advised that Key Performance
Indicators (KPIs) be assessed on a regular basis. It is critical to generate monthly, quarterly, and annual
reports defining the KPIs, as this will enable the organisation to establish if they are on pace to meet their
targets, as well as undertake comparative analysis with past periods to determine if improvements have
been achieved. (See APPENDIX 3)

VII. CONCLUSION

At first, the report provided an overview of Lenovo. The author then conducted an analysis of the
external and internal aspects affecting the firm using three frameworks: PESTEL, SWOT, and
4P. The findings summary includes the author's observations regarding the overall situation as
well as development directions for Lenovo PCs in the coming years. It is apparent that Lenovo
has done an excellent job of maintaining a competitive edge in the face of a pandemic and that
the company is growing. It is presented in this report that the company's marketing strategy will
be based on not monitoring competitors and only seeking market share. It is critical to identify
the appropriate target markets and market positions. This position must be conducive to the
development of a long-term competitive advantage in the market, and the development of
marketing strategies must support the market and assist enterprises in the voluminous and
complex competition in the market environment in finding a way forward for the development of
enterprises. Additionally, the article demonstrates that the company possesses numerous
strengths and development chances; hence, the company's strategy should be built around those
strengths in order to maximise revenue potential and brand perception in mature markets.
Finally, this research proposes that the company expand its social media presence and make
better use of social media data to have a better understanding of its customers' requirements and
preferences.
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APPENDIX 1
APPENDIX 2
 APPENDIX 3

Monitoring & Evaluation of the effectiveness of the marketing strategy

Sale KPIs - Number of New Contracts Signed

Per Period
- Dollar Value for New Contracts
Signed Per Period
- Number of Engaged Qualified
Leads in Sales Funnel
- Hours of Resources Spent on
Sales Follow Up
- Average Time for Conversion
- Net Sales – Dollar or Percentage
Growth

Customer KPI - Number of Customers Retained

- Percentage of Market Share
- Net Promotor Score
- Average Ticket/Support
Resolution Time

Marketing KPIs - Marketing qualified leads (MQL)

- Net promoter score
- Average time of conversion
- Monthly website traffic
- Returning vs. new visitors
- Pages per visit
- Traffic from social media

Financial KPIs - Growth in Revenue

- Net Profit Margin
- Gross Profit Margin
- Operational Cash Flow
- Current Accounts Receivables
- Inventory Turnover
- EBITDA
-