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Growth of Laptop market in

India.
• Indian Laptop market is now in sync with global
market.

• In 2005 that sales of laptops surpassed the sales


of desktop computers for 1st time.

• Laptop market has registered 79% Year-on-Year


(YoY) growth during 2006.

• Market share of laptops would be 35-40% in the


next two years.

Present Market scenario
The major players in the laptop category are:

• Hewlett Packard (HP)


• HCL
• Toshiba
• Compaq
• Dell Computers
• Sony
• Lenovo.

• HP has the largest market share of 21 per cent in the Indian


laptop market, followed by HCL and Lenovo.





Legend to Lenovo
• 1984: Chinese Academy of Science founded the
New Technology Developer, Inc (NTD).
• 1987: Legend character card which translated
English language operating systems into
Chinese.
• 1989:NTD renamed Legend Computer Company.
• 1990: Legend launched its own computer.
• 1996: Legend introduced itd first laptop model.
• 2004: Legend renamed Lenovo (Le + novo) the
same year a deal with IBM PC.


4 Ps of Marketing
Pro d u ct P la ce
• Desktops Le n o vo h a s th e
• Laptops h ig h e st m a rke t
(scratch sh a re in C h in a ,
resistant, o f o ve r 3 5 %
protective &
titanium C u rre n tly it h a s
cover). th e th ird p la ce in
• Servers G lo b a lP C
• Client base is m a rke t
small business
and Its m a rke t sh a re
customers. is co n sta n tly
Product Map

Everyone
Putting more innovation in the hands
of more people so they can do more
amazing things.

 Few

 Innovation
Commodity
Price Promotion
• Reasonable rates of Promotion in India –
laptops ‘’Who wants to be a
millionaire.
• Follows competitive
pricing strategy Turin Olympics
sponsorship
• Prices for all range of
Product oriented
customer base messages in advertising.
• Follows a different price Public relation
range for products in campaigns.
India and China Advertisements focused
• Accessories and After- on quality and
innovation
sales services is very
cheap compared to 
its competitors.
Branding decisions
•Customers concern:
i. Innovation
ii. Quality
iii. Service and support


•Branding alternatives:
i. Master brand
ii. House of brands
iii. Synergy approach
iv. Lenux/toyota strategy
v.
Building the Masterbrand
• “one-two punch” ; build up Lenovo as a strong
Master brand
 and continue to strengthen the ThinkPad product
brand
• Three phase advertising plan
• Worldwide advertising campaign
• “ThinkPad Unleashed” during Turin Olympics opening
 ceremony
• Lenovo as a Masterbrand for innovation

i.
ii.
Innovations
•Think Pad 60 –needed something appealing .
•Titanium cover
•Protection
•Scratch resistant
•Built-in EVDO wireless broadband card and antenna.

BCG Matrix
The BCG matrix method is based on the product
life cycle theory that can be used to determine
what priorities should be given in the product
portfolio of a business unit.
Categories of BCG Matrix
Lenovo in BCG Matrix
GE Matrix

T h e G E M a trix w o rks in 3 x3
M a trix
Market Attractiveness
Market size
Market growth rate

Market profitability 

Pricing trends 

Competitive intensity / rivalry 

Overall risk of returns in the industry

Entry barriers 

Opportunity to differentiate products and services

Demand variability

Segmentation 

Distribution structure

Technology development 
Competitive Strength
Strength of assets and competencies
Relative brand strength (marketing)

Market share

Market share growth

Customer loyalty

Relative cost position (cost structure compared with

competitors)
Relative profit margins (compared to competitors)

Distribution strength and production capacity

Record of technological or other innovation

Quality

Access to financial and other investment resources

Management strength 
Lenovo in GE Matrix
Michael Porter’s
FIVE COMPETITIVE
FORCES
The purpose of
Five-Forces Analysis
• The five forces are environmental
forces that impact on a
company’s ability to compete in
a given market.
• The purpose of five-forces analysis
is to diagnose the principal
competitive pressures in a
market and assess how strong
and important each one is.
Porter ’ s Five Forces
Model of Competition
Threat of
Threat
New of New
Entrants
Entrants

Bargaining Rivalry Among Bargaining


Power of Competing Firms Power of
Suppliers in Industry Buyers

T h re a t o f
S u b stitu te
Pro d u cts
Threat of New Entrants
Economies of Scale

Product Differentiation

Capital Requirements

Switching Costs

Access to Distribution Channels

Government Policy
Bargaining Power of
Suppliers
Suppliers are likely to be powerful if :

Supplier industry is dominated by


a few firms
Suppliers’ products have few
substitutes
Buyer is not an important customer
to supplier

Suppliers’ product is an important


input to buyers’ product

Suppliers’ products are differentiated


Suppliers’ products have high
switching costs
Bargaining Power of Buyers
Buyer groups are likely to be powerful if :

Purchase accounts for a


significant fraction of
supplier’s sales
Products are undifferentiated
Buyers face few switching
costs
Buyer presents a credible
threat of backward integration
Product unimportant to quality

Buyer has full information


Threat of Substitute Products
Keys to evaluate substitute products :

Products with Products with improving


similar price / performance tradeoffs
function relative to present
limit the industry products
prices firms
can charge

Example :

Electronic security systems in


place of security guards

Fax machines in place of


overnight mail delivery
Rivalry Among Existing
Competitors
Cutthroat competition is more likely
to occur when :
Numerous or equally balanced competitors
Slow growth industry
High fixed costs
High storage costs
Lack of differentiation or switching
costs
Capacity added in large increments
Diverse competitors
High strategic stakes
High exit barriers
Porter’s

Five
forces
New World, New
Thinking.

eats of new entrant Threats of substitute


N,

Easy Rivalry among existing firms


entrant
Ultra light
Profitabl laptop’s
e sector mobile pc’s
Think pads
New PDS
technolog Desktop
ppda
,
y Smartphone
Cont..
it has excellent supply chai
Intel corp.
 Supplier’s power
Seagate's technology etc

Customers who
B u y e r’ s p o w e r are
enterprises
have less power
as compared to
individual
buyers.
The Five Forces of Competition Model
HIGH

INTENSE

LOW

MODERATE
High
SWOT
Strength Weakness
Lean cost structure Unable to maintain sustained
Effective business model growth rate in all market
Innovation leadership segment
Event sponsoring Ignoring potential market

Good marketing and Retaining of largest shares by

distribution strategies competitors


Quick responsiveness Poor global perception

Strong R&D Globally not well known.

National image.
Opportunity Threat
Increasing globaldemand Competition threat from both
for PC local and international
Specialty shops proving one market
stop platform for distribution Industry reaching maturity

Government organizations Software piracy and clone

increasing their spending on IT market


Internet boom Price war

Increase product lines Emerging small firms

Converting manual orders to International competitors

automotive orders. forming alliance with local


competitors.
Product Map

Everyone
Putting more innovation in the hands
of more people so they can do more
amazing things.

 Few

 Innovation
Commodity
Lenovo’s growth Strategy
• Changed its name Lenovo from Legend in 2003.
• In 2004 LENOVO acquired IBM’s PC division.
• Adopted direct distribution technique leaving
traditional technique.
• Lenovo established new Innovation center in 2005.
• Lenovo introduced the first Dual-core ThinkPad
notebook PCs in 2006.
• Sponsored 2006 Olympic Winter Games in Torino, Italy,
supplying 5000 desktops.
• Increasing the range of product categories
(diversification) in order to maximize the number
of customers and to face fierce competition
• Efficient international management.

PROFIT IMPACT OF MARKETING
STRATEGY
(PIMS MODEL)
 The PIMS (Profit Impact of Market Strategy) of the
Strategic Planning Institute is a large scale study
designed to measure the relationship between
business actions and business results.

 The project was initiated and developed at the


General Electric Co. from the mid-1960s and
expanded upon at the Management Science
Institute at Harvard in the early 1970s.

 Since 1975 The Strategic Planning Institute has


continued the development and application of the
PIMS research
continued
 The comprehensive profiles of over 3,000 strategic
experiences constitute this unique data pool.. The data
covers the important characteristics of the MARKET
ENVIRONMENT, THE STATE OF COMPETITION, THE
STRATEGY PURSUED BY EACH BUSINESS AND
THE RESULTS OBTAINED.
 PIMS is:
• a database of business strategies, used to generate
benchmarks and identify winning strategies.
• a set of data-derived business strategy principles to
guide strategic thinking and strategic measurement.
• a methodology for diagnosing business problems and
opportunities, and for measuring the profit potential
of a business.
 
PIMS
• The data constitute a key resource for such
critical management tasks as evaluating
business performance, analyzing new
business opportunities, evaluating and reality
testing new strategies, and screening
business portfolios.
 
• The primary role of the PIMS Program of the
Strategic Planning Institute is to help managers
understand and react to their business
environment. PIMS does this by assisting
managers as they develop and test strategies
that will achieve an acceptable level of winning
as defined by various strategies and financial
measures.
 
KEY STRATEGIC FACTORS INFLUENCING
BUSINESS PERFORMANCE
• Relative Price
• Competitive Position
• Market Environment • Industry Concentration
• Stage of Lifecycle • Capital and Operating
•  Market Share Structure
• Marketing/Sales •  Investment / Sales
• New Products/Sales • Receivables /
• Relative Market Share Investment
• Customer • Investment / Value
Concentration Added
• R & D/Sales •  Capacity Utilization
• Relative Quality • Gross Book Value of
• Customer Purchase P&E/Total Investment
Amount •  Value Added / Sales
• Real Market Growth
• Operating Effectiveness
THE STATISTICS
• Lenovo market share 0.01% (November 2009)
  Devices  Market
Share  
• Lenovo i966   0.01% 
•  Lenovo V800  <0.01%   
• Lenovo P780  <0.01%   
• Total market share  
0.01%  (0.01%)   
• Other than Lenovo devices,
 unknown
 devices and PC browsers   99.99% 
•  Total market share  
100%  (99.99%) 
Consumer satisfaction index
CRITERIA OF PIMS-QUESTIONS TO BE
ASKED
• Return on Investment Report - What level of
profitability is "expected" for comparable
businesses? (106.42%)
 

• Market Share Change Report - What level of share


gain/loss is "expected" for comparable
businesses? (.01%)
 

• Marketing Budget Report - What level of


marketing expenses is "expected" for
comparable businesses?
 

• Market Attractiveness/Competitive Strength


Report - How attractive is the
market/competitive position of comparable
CONTINUED
• Important Strategic Principles Derived From PIMS
 

• In the long run, product quality is the single most


important factor affecting performance
 

• Market share and profitability closely correlated


 

• High-investment intensity reduces profitability


 

• Cash implications of growth rate and relative


market share are affected by many factors
 

• Vertical integration is profitable for some


businesses only

LIMITATION OF PIMS

• Key market-share variable is sensitive to product-


market definition
 

• Other variables depend on subjective judgments


 

• Inherent limitations of cross-section analysis


 

• Sample biased toward larger firms that are


industry leaders
 


• THANK YOU

PRESENTED BY:
HARSHA

ABHISHEK

MUKESH

MANALI

PANKAJ

PRIYANKA