Lenovo International Business

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1) NAMING

On April 28, 2003 Lenovo changed its English name from "Legend," which had been utilized for almost fifteen years to “Lenovo” and registered this new name globally. It is basically a combination of ' Le ' from Legend and ' Novo ' which is a Latin word that means new. Nevertheless, it was more than simply changing the name. It was actually the first and principal move towards its internationalization. There were initially no plans for internationalization or even sales abroad when Lenovo was newly established. Their objective was just to survive in the Chinese PC market. 15 years later, Lenovo began its internationalization, and the main thing it expected to do was to change its official English name. Since there were excessive amounts of organizations called "Legend" that had officially enlisted the name in various nations, and in order to build up its business abroad and possess a trademark that secures the company by law, Lenovo changed its English name. Based on a research made, Lenovo's marketing manager identified and pointed out three issues within the brand. First, their brand image was vague to its customers. Next, due to lack of brand strategy, the company did not have a general branding direction. Then, there was a structural disorder. Lenovo owned 40 different brands and had no general structure between those

brands. Mindful of the issues, the organization built up a clear brand identity and approved its brand image. It set a direction for its internationalization and incorporated its many brands before it changed its name. Changing its name was the first step of the internationalization procedure for Lenovo. It gave Lenovo a brand to offer items, as well as another image and identity in the market to begin its internationalization. This strategy concentrates on not just the shallow name changing, but also the internal brand culture evolving. The brand reconstruction guaranteed Lenovo a superior begin on the global stage.

2) PRICING

Lenovo's brand strategy concentrates on making an image of its goods with great quality and high technology, however at a moderate cost along with excellent services. Most of Lenovo's market shares are in the USA, China and Asia. The majority of its targeted markets consist of middle class people. In order to pull in buyers from this segment, Lenovo conveyed messages through advertisements, campaigns and websites to position its products for the middle class in the market. Using this specific brand strategy, more than 50% of its PCs sold are middle end and the net revenue was around 60%. A large portion of Lenovo's profits are generated from this segment. Lenovo made its position clear in the market and as a result, the company successfully managed to attract more targeted customers. This gave the company a superior personality and a better identity in the international market.

3.3 MARKETING STRATEGY

Gaining sustainable competitiveness and increasing sales are the two main marketing objectives of a company. In order to accomplish these two targets, the organization needs to concentrate on every opportunity it has in the market and pick the correct plan based on its resources. Among all the different marketing strategies Lenovo used, sports event marketing is a very remarkable strategy that Lenovo has been utilizing and it turned out to be a successful one. Sports, being a universal language, helped Lenovo to additionally build up its internationalization and allowed it to shine. Most of the sports event involved are targeted on the European, American and Chinese markets. For Europe, Lenovo implemented its strategy by sponsoring the Formula One, where as in the US, it took part in the NBA and in China they invested in the Olympics. However, there was another sports event strategy made by Lenovo that gave them a huge return and success :-

1) FIFA WORLD PLAYER OF THE YEAR

Ronaldinho ( FIFA World Player of 2005 ) was sponsored by Lenovo in 2006. Lenovo selected him to be their product ambasador and the aftereffect of this sponsorship has brought Lenovo some shocking news. Initially, there were more than a million new customers enlisted for Ronaldinho's intuitive section on Lenovo's site. In addition, the commercial Ronaldinho did for Lenovo was the third most recognized commercial in China with 19.3% of the general population acknowledging it. This number was considerably higher than that of a portion of the official World Cup advertisements. Then, Lenovo's Chinese market share achieved another high of 36% while the European market moreover expanded. In India, the PC that Ronaldinho promoted had a 100 percent development in a month. There is deffinitely no doubt that by sponsoring Ronaldinho, the company had a massive improvement in sales and brand recognition.

QUESTION 2(B)

4.0 RECOMMENDATIONS

A company sustaining its competitive advantage is very important as it is one of the factor for a longer life span in the international market. It is crystal clear that the organization is doing amazing and served an important part in the PC business. The report beneath will additionally clarify how Lenovo can maintain its strengths and sustain its competitive advantage.

1) CONTINUOUS DEVELOPMENT

In a nutshell, being a company with high competition in the industry, Lenovo's business strategies are strong in research and development activities, innovation in designing and producing high quality and distinct goods and also enhancing collaboration and relationships with involved parties to decrease cost and to achieve cost advantage in order to win the price war. In order for the company to survive and succeed longer in the international market, Lenovo have to realize that it needs to keep up the strength it has by utilizing practical strategies to lessen the expenses and share the cost benefit with its customers. Lenovo should make maximum utilization of those cost leadership advantages with its solid partnership in labour and material. The process of strengthening Lenovo's competitive advantage in the market may occur if the company concentrates more on the development and advancement of its products and services instead of focusing on what it has earned. Therefore, the advancement of its products should be done in a manner that the production is more cost effective. This is possible by carring out operations from countries where the goods are less expensive to make, while not risking its quality.

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