Strategy and Change

Assignment # 1
Course Instructor : Dr. Rana Zeeshan

Maham Ahmed – 19501

Mubashir Hassan – 19507
Asrah Ali – 19681
Muhammad Naveed – 19682
Muhammad Anas Iqbal – 19623
Mohsin Rauf Sheikh – 19507

Hyderi Campus
MBA (R)
Document 1:
1. A brief overview of the selected corporation
Brief Overview:
Lenovo Group Limited, founded in 1984 in Beijing, China by Liu Chuanzhi, initially named
"Legend," is a multinational technology company specializing in designing, manufacturing, and
marketing a wide range of electronic products including personal computers (PCs), smartphones,
tablets, workstations, servers, and smart televisions. It is the world's second-largest PC vendor,
renowned for its ThinkPad line of notebook computers and ThinkCentre line of desktops.
Headquartered in Beijing, Lenovo operates in over 60 countries and sells its products in around
160 countries.
2. Key milestones, turning points, and strategic decisions made in the past.
Key Milestones and Strategic Decisions:
 In 2005, Lenovo acquired IBM's PC division, propelling it to become the third-largest
computer maker worldwide.
 Lenovo formed a PC joint venture with NEC in 2011, aimed at expanding its presence in
Japan.
 Acquired Medion, a German electronics manufacturing company, in 2011, strengthening its
position in the German computer market.
 In 2012, Lenovo entered the smartphone market and quickly became a significant player in
the Chinese market.
 Strategic partnerships and acquisitions in cloud computing, software, and technology
ventures aimed at diversifying its product portfolio and expanding globally.
3. Updated vision, mission, values, goals and details on key strategies.
Vision:
To create personal devices more people are inspired to own, a culture more people aspire to join,
and an enduring trusted business that is well respected around the world.
Mission:
To become one of the world's great personal technology companies.
Values:
Not explicitly mentioned in the provided text.
Goals:
Expand globally, innovate in product development, dominate in both PC and smartphone
markets.
Key Strategies:
Vertical integration, diversification into emerging markets (smartphones, tablets, smart TVs),
aggressive pricing, and investment in research and development.
4. External Factor Evaluation Matrix
To construct an External Factor Evaluation (EFE) Matrix for Lenovo Group Limited, we need to
identify key external factors affecting the company and assign weights and ratings to each factor.
The factors are typically grouped into opportunities and threats. Here's a simplified example:
External Factors:
Opportunities:
 Growing demand for smartphones and tablets.
 Expansion into emerging markets.
 Strategic partnerships and acquisitions.
 Technological advancements.
 Increasing global PC market.
Threats:
 Intense competition in the PC and smartphone markets.
 Rapid technological changes.
 Economic downturns affecting consumer spending.
 Trade tensions and geopolitical risks.
 Potential backlash against Chinese companies in certain markets.
Weights:
Assign weights to each factor, indicating its relative importance to Lenovo.
Ratings:
Assign ratings to each factor, indicating how effectively Lenovo is responding to or capitalizing
on each factor.
External Factor Evaluation Matrix for Lenovo:
External Factors Weight Rating Weighted Score
Opportunities:
Growing demand for smartphones and tablets 0.15 4 0.60
Expansion into emerging markets 0.10 3 0.30
Strategic partnerships and acquisitions 0.10 4 0.40
Technological advancements 0.15 3 0.45
Increasing global PC market 0.10 3 0.30
Threats:
Intense competition in the PC and smartphone markets 0.15 3 0.45
Rapid technological changes 0.10 3 0.30
Economic downturns affecting consumer spending 0.10 2 0.20
Trade tensions and geopolitical risks 0.15 2 0.30
Potential backlash against Chinese companies 0.10 2 0.20
Total 1.00 3.40

Interpretation:
 The total weighted score is 3.40, indicating that Lenovo is responding reasonably well to the
identified external factors.
 Lenovo's strengths lie in capitalizing on opportunities such as growing demand for
smartphones and tablets and strategic partnerships, but it faces significant threats such as
intense competition and rapid technological changes.
5. Competitors Profile Matrix
Key Competitors:
 Apple Inc.
 Dell Inc.
 HP Inc.
 Samsung Electronics Co., Ltd.
 Huawei Technologies Co., Ltd.

Critical Success Factors:

 Market Share
 Financial Strength
 Product Quality and Innovation
 Brand Reputation
 Global Presence
Competitors Profile Matrix for Lenovo:
Critical Success Factors Apple Dell HP Samsung Huawei Lenovo
Market Share 4 3 3 4 3 3
Financial Strength 4 3 3 4 3 3
Product Quality/Innovation 4 3 3 4 3 3
Brand Reputation 4 3 3 4 3 3
Global Presence 4 3 3 4 3 3
Total 20 15 15 20 15 15
Interpretation:
 The total scores for each competitor represent their overall competitive positions.
 Apple and Samsung have the highest total scores, indicating stronger competitive positions
overall.
 Lenovo's score suggests it is on par with its competitors in terms of critical success factors.
6. Internal Factor Evaluation Matrix
Key Internal Factors:
 Strong brand recognition
 Vertical integration in manufacturing
 Diverse product portfolio
 Geographic presence
 Technological expertise
Critical Success Factors:
 Financial Management
 Product Quality and Innovation
 Marketing Effectiveness
 Operations Efficiency
 Human Resource Management
Internal Factor Evaluation Matrix for Lenovo:
Internal Factors Weight Rating Weighted Score
Strengths:
Strong brand recognition and global presence 0.10 4.0 0.40
High market share in PC and smartphone markets 0.08 4.0 0.32
Vertical integration strategy 0.07 4.0 0.28
Strategic acquisitions and partnerships 0.07 3.5 0.245
Innovative product portfolio (ThinkPad, IdeaPad,
LePad) 0.08 3.5 0.28
Extensive R&D capabilities 0.07 3.5 0.245
Robust financial performance and growth 0.08 4.0 0.32
Effective marketing and sponsorships (NFL deal) 0.06 3.5 0.21
Diverse geographical operations 0.06 4.0 0.24
Strong supply chain management 0.07 4.0 0.28
Weaknesses:
Dependency on PC market with declining demand 0.08 2.5 0.20
High competition in smartphone market 0.08 2.5 0.20
Confusing product branding and overlap 0.05 2.0 0.10
Limited profitability in aggressive pricing strategy 0.07 2.5 0.175
Potential risks in acquisitions and integrations 0.07 2.5 0.175
Challenges in maintaining innovation pace 0.06 2.5 0.15
Reliance on Chinese market for smartphones 0.06 2.5 0.15
Total 1.00 3.79
Interpretation:
The total weighted score of 3.79 indicates that Lenovo is in a strong internal position. Scores
above 2.5 generally signify strengths outweigh weaknesses. Lenovo’s strategic focus on
innovation, vertical integration, and global presence are key drivers of its internal strength,
although it must address market dependencies and competitive pressures in the smartphone
segment.

Document 2:
1. SWOT Matrix
Strength Weakness
1. Operations in over 60
1. Despite diversification, PCs
countries and products sold
remain a significant part of
in around 160 countries.
the business.
2. Offers PCs, smartphones,
2. Overlapping product brands
tablets, servers, and smart
can confuse customers.
TVs.
3. Faces strong competition
3. In-house manufacturing to
from Apple and Samsung in
control costs and supply
premium segments.
chain.
4. High revenue dependence on
4. Multiple research centers
China, which can be risky.
globally.
Opportunities SO Strategies WO Strategies
1. Growth potential in countries 1. Use Lenovo’s extensive 1. Focus on growing segments
like India, Russia, and global reach and strong like smartphones, tablets,
Indonesia. R&D capabilities to tailor and smart TVs to reduce
2. Increasing demand for products for emerging reliance on PCs.
smartphones presents markets like India, Russia, 2. Simplify and clarify product
significant growth and Indonesia. branding to avoid customer
opportunities. 2. Utilize the acquisition of confusion.
3. Potential to expand cloud Stoneware to enhance and
computing services expand Lenovo’s cloud
following the Stoneware computing services globally.
acquisition.
4. Collaboration with major
companies like NFL can
enhance brand visibility and
market penetration.
5. Growing markets for these
products provide
opportunities for expansion.
Threats ST Strategies WT Strategies
1. Strong competitors like HP, 1. Continue investing in R&D 1. Reduce dependency on the
Dell, Apple, and emerging to stay ahead of competitors Chinese market by
Chinese brands like Xiaomi. like Apple and Samsung by expanding aggressively into
2. Declining demand for PCs bringing innovative products other high-growth regions.
could impact revenues. to market quickly. 2. Implement a flexible product
3. Global economic downturns 2. Use vertical integration to development strategy to
or political issues could manage supply chain quickly adapt to
affect operations. disruptions and control costs. technological changes and
4. Need to keep up with fast- market trends.
paced technological changes
and consumer preferences.
5. Risk of IP theft, especially in
international markets.

2. SPACE MATRIX:
Financial Strength (FS)
 Revenue Growth: +4
 Net Income Growth: +4
 Profit Margins: +3
 Global Market Share: +5
 Strong Cash Flow: +4

Competitive Advantage (CA)

 Brand Recognition: -5
 Innovation and R&D: -3
 Vertical Integration: -2
 Strategic Acquisitions: -1
 Market Position in China: -5

Environmental Stability (ES)

 Market Competition: -3
 Economic Conditions: -2
 Technological Changes: -1
 Regulatory Challenges: -3
 Consumer Preferences: -4

Industry Strength (IS)

 Growing Smartphone Market: +5
 IT Industry Growth: +4
 Emerging Markets: +3
 Corporate Demand: +4
 Technological Integration: +3

Calculations

FS Average: 20
CA Average: -16
ES Average: -13
IS Average: 19

SPACE Matrix Quadrant

Based on the averages calculated
Financial Strength (FS): 4
Competitive Advantage (CA): 3.2
Environmental Stability (ES): -2.6
Industry Strength (IS): 3.8

Y-axis average: 7
X-axis average: 3

FS

7
5 (7, 3)
3
CS 1 IS
1 3 5 7

ES
INTERPRETATION:
Lenovo's strategy falls into the Aggressive Quadrant of the SPACE matrix. This quadrant
suggests that Lenovo should pursue aggressive growth strategies, leveraging its competitive
advantages and industry strengths

3. The Grand Strategy Matrix

1. Quadrant I: Strong competitive position and rapid market growth.
 o Strategies: Market development, market penetration, product development,
integration, diversification (related or unrelated).
2. Quadrant II: Weak competitive position and rapid market growth.
o Strategies: Market development, market penetration, product development, horizontal
integration, divestiture.
3. Quadrant III: Weak competitive position and slow market growth.
o Strategies: Retrenchment, divestiture, liquidation.
4. Quadrant IV: Strong competitive position and slow market growth.
o Strategies: Diversification (related or unrelated), joint ventures, concentric
diversification.
Lenovo’s Position in the Grand Strategy Matrix
Assessment:
1. Market Growth Rate: The technology industry, particularly the PC and smartphone
sectors, shows moderate to rapid growth.
2. Competitive Position: Lenovo has a strong competitive position with a solid market
share in the PC industry and expanding presence in the smartphone market, although
facing stiff competition from other major players like Apple, Samsung, and HP.
Based on the provided analysis, Lenovo likely falls into Quadrant I.
Strategic Recommendations for Lenovo
Given Lenovo’s strong competitive position and the moderate to high growth rate of the
technology market, it should pursue aggressive growth strategies:
1. Market Penetration: Increase market share in existing markets through enhanced
marketing, competitive pricing, and improved customer service.
2. Market Development: Expand into new geographic regions, especially emerging
markets with high growth potential.
3. Product Development: Invest in R&D to innovate and develop new products,
particularly in fast-growing segments such as smartphones, tablets, and other smart
devices.
4. Horizontal Integration: Acquire or merge with other companies in the same industry to
consolidate market position and achieve economies of scale.
5. Related Diversification: Expand into related product lines or services that complement
the existing business, such as smart home devices or enterprise solutions.

STRONG
COMPETITIVE
POSITION
Quadrant III Quadrant II

1. Retrenchment 1. Market Penetration

2. Diversification 2. Market Development
3. Divestiture 3. Product Development
4. Liquidation 4. Horizontal Integration
5. Divestiture

RAPID MARKET GROWTH

RAPID MAR

Quadrant I
Quadrant IV 1. Market Penetration
2. Market Development
1. Diversification (Related or
3. Product Development
Unrelated)
4. Integration
2. Joint Ventures
5. Related Diversification
3. Concentric Diversification

STRONG
COMPETITIVE
POSITION

3. QSPM Matrix
FACTOR WEIGHT AS TAS
STRENGTH
Global smartphone market growth 0.10 4 4
Emerging market penetration 0.1 4 3
Brand recognition and loyalty 0.1 3 3
Competition intensity 0.1 3 4

WEAKNESS

Market demand for diversified products 0.1 4 3

Technological innovation potential 0.1 4 3

Market expansion opportunities 0.1 4 3

OPPORTUNITIES

Brand perception and awareness 0.1 4 3

Marketing and advertising effectiveness 0.1 4 3

Market penetration strategies 0.1 4 3

THREATS

Supply chain management efficiency 0.1 4 3

Cost-effectiveness in production 0.1 4 3

Adaptability to market changes 0.1 4 3

Now, let's calculate the Total Attractiveness Score (TAS) for each strategic alternative:

1. Focus on Smartphone
Market: TAS=(0.10×4)+(0.10×4)+(0.10×3)+(0.10×4)=1.6+1.2+0.9+1.2=4.9
2. Diversify Product Portfolio: TAS=(0.10×4)+(0.10×4)+(0.10×4)=1.6+1.2+1.2=4.0
3. Enhance Brand Image: TAS=(0.10×4)+(0.10×4)+(0.10×4)=1.6+1.2+1.2=4.0
4. Optimize Operational
Efficiency: TAS=(0.10×4)+(0.10×4)+(0.10×4)=1.6+1.2+1.2=4.0

Interpretation:
Based on the QSPM analysis, focusing on the smartphone market appears to be the most
attractive strategic alternative for Lenovo, with the highest Total Attractiveness Score (TAS) of
4.9. This suggests that Lenovo should prioritize its efforts on expanding its presence and market
share in the smartphone industry while continuing to leverage its strengths in PC manufacturing
and operational efficiency.