Can Lenovo Regain Glory with New Strategy?
Case Code: BSTR540
Case Length: 21 Pages
Period: 1984 - 2018
Pub Date: 2018
Teaching Note: Available
Organization: Lenovo Group Limited
Industry: Computers, Smartphones
Countries: China, Global
Themes: Growth Strategy, Business Model Innovation, Blue Ocean Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smartphones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smartphones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smartphone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei Technologies Co. Ltd. (Huawei), Xiaomi Inc. (Xiaomi), Oppo Electronics Corp. (Oppo), and Vivo Electronic Corp. (Vivo) were rolling out stylish and inexpensive smartphones and gaining market share in China.
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