Lenovo: Risk Thinking and Risk Taking Essay

Lenovo: Risk Thinking and Risk Taking Essay

The Information Technology industry is unstoppable, with its persistent growth in innovation and market efficiency. Where can technology be absent these days? We have it in our homes, business, schools, medical institutions, banks, government and even in museums, who doesn’t need these data processing computers? Indeed, there is a cutthroat competition among the leading and the emergent brand names. Consumers will be wise to choose, which of which is true to its promise.

The industry like any other else is not as big as it is today. The big players have been sturdy enough to retain its share in the world. Lenovo, the third largest, had to do an offensive strategy to prove itself as a globally competitive brand. Carrying a Chinese –brand reputation can be so predictable for the company. What risks does it have to encounter? What solutions are they willing to make?

Yang Yuanqing, the CEO and Deepak Advani, the CMO, were the brains behind Lenovo’s past and current reputation. The company through their own efforts to push hefty research had proven computer solutions to be innovative enough to hold up a respectable image in China. 20 years of leading computer industry in the economy giant, China, the company would only have its next step to make: a global venture. Thus, a shortcut to break in the global scene would be the opportunity of acquiring IBM PC Division. Risky, and was even predicted to be a possible failing move according to some analysts, the new Lenovo company is set to make their laptops lined with the leaders, Dell and Hewlett-Packard.

Micheal Dell, CEO of Dell, Inc. had foreseen Lenovo and IBM’s move as something that will never work. But this was contrary to what Advani picture, he is certain that the two companies were a match made in heaven, a perfect collaboration of East and West. It was a tough challenge for Lenovo to build a new reputation, a new brand without impairing IBM’s legacy. The new company struggled internally (organizational complexity) and externally as the old market of IBM had reservations about Lenovo as a Chinese brand. Advertising plans were aggressive, mostly focused on product-oriented messages, but the budget was more sparing than the leading computer brands. The partnership with the Olympics must be the company’s biggest advertising investment, and the best timing for introducing the brand. The market surveys revealed that the Olympics sponsorship was seen as a major positive to the brand’s reputation primarily in China and Brazil. However, the Olympics were not seen as a key buying motivator. The dilemma was pointed primarily on product differentiation. Resulting sales figures were not as perceptible to what the company forecasts. It is certain that consumers were looking for more innovation, tighter security, better quality and reliability, and better design.

IBM ThinkPads won the status as a premium business notebook. Lenovo, on the other hand, is China’s top-performing computer. Now the 3000, the series of laptops that was born from intensive efforts to research and innovation, will be targeted to small business markets. Indeed, the company is an image of a restless warrior of technology. There will be endless risk and more challenging dilemma to come. Lenovo’s destiny in the computer industry will be dependent on the company’s advancement efforts. No one can tell how far Lenovo will be going. This busy company is just preparing for its next big step.



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