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Lenovo: Countering the Dell Challenge                                                                                                                                                                                                                                            
Product Ref: 05/212C Company: Lenovo

Product Type: Case Industry: Technology Hardware

Related Product(s): Teaching Note
Authors: Pan Yigang   Kavita Sethi
Since its inception in 1984, Lenovo Group Limited had grown from a company engaged primarily in the distribution of imported computers to being the largest IT Corporation in the People's Republic of China (PRC). While Lenovo was able to hold onto its market leadership position, competitive pressure from Dell, IBM, Toshiba and HP was increasing, with the Group taking large hits, mainly at the hands of Dell. Engaging in a series of price wars to retain the low end of the consumer segment, Lenovo was also struggling to maintain its stronghold in corporate sales to Chinese government ministries and schools. With the PC market in China maturing rapidly, Lenovo's main challenge was to develop a business model that would not only combat Dell's direct selling model but would also take advantage of the Group's traditional strengths. With a view to meeting the Group's projected target of becoming a member of Fortune 500 by 2010, it seemed that Lenovo was looking towards tapping international markets, as well as exploring alternate product diversification strategies in the local market. Lenovo's predicament highlighted the growing pains faced by many Chinese companies, as they strove to become global players while defending their domestic market share from foreign rivals.
Functional Area : Marketing
Strategy & General Management

Issues: Competitive advantage, business models, distribution channels, product pricing product branding, entering international markets
Length: 19 pages Country: China (People's Rep. of)

Pub. Year: 2005 Level of Difficulty: 2
This product type is available in the following language(s):      English   Simplified Chinese
Related Information: N/A
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