TASK2Porter’s five forces and

value chain model: LenovoName: Wu DiyiMatrix No: P68508

Lenovo like others big laptop and desktop supplier who did not manufactures its own materials.

The raw materials like boards and chips supplier is fewer and powerful, they are not easy to drive up prices.

Supplier Power:

Buyer bargaining power in this market is relatively low in this market, since the store sales mode.

improving product and service quality, offering extra features and maintaining strong customer relationship is still key to success.

Buyer Power

Currently, there are three major players in the PC corporate market, Dell, HP and Lenovo, which take up around 43% of the market share, second in the world market share 15.7% in 2012.(showing on next page).

Competitive Rivalry

Vendor

4Q12

Shipments

4Q12 Market

Share

4Q11

Shipments

4Q11 Market

Share

4Q12/4Q11

Growth

HP 15,023 16.7% 15,113 15.8% -0.6%

Lenovo 14,105 15.7% 13,040 13.6% 8.2%

Dell 9,482 10.6% 11,967 12.5% -20.8%

Acer Group 6,959 7.8% 9,692 10.1% -28.2%

ASUS 6,467 7.2% 6,126 6.4% 5.6%

Others 37,753 42.0% 39,974 41.7% -5.6%

All Vendors 89,789 100.0% 95,913 100.0% -6.4%

Top 5 Vendors, Worldwide PC Shipments, Fourth Quarter 2012

Source: IDC Worldwide Quarterly PC Tracker, January 10, 2013

According to the customer satisfaction survey, there are relatively few differentiations among these top five players in terms of product features and product quality.

Lenovo has the best customer satisfaction and innovation and overall score among them. But design and displays and audio below average level.

Competitive Rivalry

Competitive Rivalry

The most probable substitute products are tablet (like ipad and sumsung note) and smartphones. Despite the rapid development of mobile devices, enterprises don’t see them as useful to their organization.

The consumer market can not be replace by next few years.

Threat of Substitution

“With the growth of the PC corporate market, there are foreseeable potential entrances in this market. However, the entry barrier is relatively high – enterprises generally seem to be satisfied with their current notebook providers, with little incentive to look beyond their current suppliers. However, in technology markets, it is generally considered a constant possibility for a new company to leapfrog the competition with a new invention. “

“As a result, existing companies are rigorous about attracting new engineering talent and attempt to use complementing to make major changes in IT providers unprofitable. This is a significant reason that Dell, HP and Lenovo maintain their dominant positions in the corporate market.” (Source: Lenovo: Competitive Strategies for Dominance In the Corporate Market )

Threat of New Entry:

Force Key Determinants Strength of the force

Rivalry competitors Concentration (number) and size of competitors

Medium to high

Brand identity

New entry Economies of scale high

Brand identity

Capital requirements

Threat of substitutes Price/Performance of substitutes

Low to medium

Switching costs

Buyer Power Buyer concentration Medium to high

Buyer size (volume)

Switching costs

Supplier Power Supplier concentration Low

Supplier size (volume)

Switching costs

Computer supplier five force analysis

Table 1

Like others big laptop and desktop supplier raw material receiving from other supplier.

Inbound Logistics

Operations

Lenovo's OEM partners are mainly Wistron, Quanta and Compal three, including the IdeaPad, Thinkpad, and Tin Yat other original series models are apportioned to three foundry.

Outbound Logistics

Marketing & SalesTo adapt the new environment, Lenovo mobile device new products cellphone and tablet came out.

Services and warranty

Lenovo delivers the quality, reliability and peace of mind to get you and keep you up and running, no matter where you are, no matter when you need us.

Procurement Technology Development Human Resource Management Firm Infrastructure

Support Activities

Drive Quality Improvements from our suppliers of goods and services

Deliver lowest overall cost and greatest competitive advantage

Improve client perception of our values through increased influence and exemplary customer service and support

Procurement

Lenovo must learn to innovate to become the true high-tech leader

Technology Development

This is the technique of employment management that can create positive improvement and add value by the combination of employment policies, programs and practices. 

Human Resource Management

Lenovo has consistently outgrown the worldwide PC market in unit shipments and gained market share across all geographies, products and customer segments, making it the fastest growing major PC company in the world for three years running.

Firm Infrastructure