Apple and Lenovo’s Technology Stratagy

The engineering science Strategy Comparison of Lenovo and orchard apple tree MG 8673 Technology strategy professor Oded Nov Xiaofei Li Table of Contents c eitherer-up Profile 3 Company Vision and Misson 4 SWOT Analysis5 Porters Five Forces6 ingathering grocery store matrix 7 exploitation Sh be Matrix8 Technology accomplishment of Lenovo and orc punishing apple tree9 First Mover/ governing design 9 Government regularization10 Lock-in and shift Cost10 Strategy operation of Lenovo and apple11 Conclusion12 Company Profile Lenovo is a Chinese transnational computer hardw are and electronics community.The corporation was formed in mainland China and co-ordinated in HK and would grow to be the largest PC ships caller-up in China. And in 2005 Lenovo acquired the former person-to-person calculator Division of IBM. Its proceedss include personal computers, anovulatory drug computers, runny phones, workstations, servers, electronic storage devices, IT management software an d smart televisions. Today, Lenovo is a US$21 million personal engineering company and the orbits second-largest PC vendor1, it has to a greater extent than 26,000 employees in more than 60 countries function customers in more than 160 countries2.Apple is an American multinational skunk, incorporated on 1977. It engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. Apple sells a range of iPhone, iPad, Mac and iPod congruous returns, including a portfolio of consumer and professional software applications, the iOS and Mac OS X in operation(p) systems, iCloud, and a range of accessory, service and support offerings. It also sells and delivers digital core and applications through the iTunes origin, App Store, iBookstore, and Mac App Store.Also Apple is the worlds third-largest mobile phone maker later onward Samsung and Nokia3. As of November 2012, Apple has 394 retail stores in fou rteen countries4. It is the largest publicly traded corporation in the world by market capitalization, with an estimated value of US$626 billion as of September 2012. It currently has 72,800 permanent regular employees and 3,300 temporary full-time employees worldwide5. Lenovo Companys vision and mission 1. Lenovo has a long-term intent of proper the leading personal technology company in the world.It aspires to carry through this goal by leading in three key areas Personal Computers Lead in PCs and be respected for its harvest-tide innovation and quality. crossing Lead the industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and net content. Culture Become accreditd as one of the best, approximately certain(p) and most well-respected companies to work for and do barter with. 2 2. Lenovo is building a style of viewing the world and doing businessit introduces the in the alto stirherest intersection points i n China and and so spread crosswise the globe.Also Case Study will key out why Apple Inc. is a very successful company.Lenovo believes that the new way of expansion from East to West is the way of in store(predicate) 3. Lenovos business is built on crossing innovation, a highly efficient worldwide supply chain and strong strategic execution. The company develops, manufactures and markets reliable, high quality, take prisoner and easy-to-use technology products and services for customers who want technology that does more. Apple Companys vision and mission 1. Apple believes that they are on the face of the background to make great products and thats not changing. They are constantly stressing on innovating.They believe that we exact to own and control the primary technologies behind the products that we make, and move gibely in markets where they can make a significant contribution. 6 2. Apple is committed to protecting the surroundings, health and safety of their emplo yees, customers and the global communities where they operate. They recognize that by integrating sound environmental, health and safety management practices into all aspects of their business, they can offer technologically innovative products and services while conserving and enhancing recourses for future generations.Apple strives for continuous improvement in the environmental, health and safety management systems and in the environmental quality of their products, processes and services. 7 Lenovo Company SWOT Analysis Strengths Weaknesses * plurality and strong relationship with domestic mainland Chinese customer * Mass Manufacturing and clinical depression production cost. * Excellent marketing and distribution strategy. * Merge with IMB Personal Computer * Mundane Outlook * Relative weak Global Brand cognition * Relative weak On rootage Sales * Not qualifies After-gross revenue Services * Limited fel scummyship of global market Opportunities Threats Chinese Government Association * Fast festering Personal Computer market * The neighbor hood Indian is becoming the fastest growing PC market in the world * write of memorandum of understanding with USA * Specialty shops providing one stop plan for distribution * Appreciation of RMB will increase product price away(p) of Chinese market * Competition threats from local and international competitor * price war * International competitors forming alliance with local competitors. * Industry Reaching maturity Apple Company SWOT Analysis Strengths Weaknesses Large segment of trustworthy customer called Apple fans * starchy brand image. * Retail Stores provide the project and eye catching Apple product * Huge R&D Innovation * Patent infringement. * return recalls. * Failure of Mac Mini and Apple TV * The fast speed of changing product generation Opportunities Threats * Strong growth in smartphone and personal computer industry. * Cooperation with other self-aggrandizing company like Google c oupled to create new innovation * Apple product lock in customer behavior * Rising popularity ofGoogle Android. go overet aspiration in PC and smartphone industry. * Dependence on specific providers. * The leadership after Steve Jobs Porters five forces for the companies industry New entrants, negotiate forcefulness of provider, bargaining power of buyers, Substitute, Rivalry 1. Smartphone market share is basically covered by big cellphone manufacture company e. g. Apple, Lenovo, Samsung, HTC, Nokia, Blackberry. They gather in abundant RD innovation, large ground and loyalty customer, excellent marketing and advertising strategy. The new entrants are limited in this market, and they are rarely to survive. . This case is the aforesaid(prenominal) in Tablet and PC industry. This entrants are also hard to get into this market, because the market share are occupied by those big company such as Apple, Lenovo, Netflix, Samsung, IBM, Dell, HP, Sony. 3. Lenovo and Apple make the pro duct outsource to the supplier such Foxconn. But basically suppliers cede relatively weak bargaining power with Lenovo and Apple, because Apple and Lenovo odder huge numbers of electronical products from the suppliers, they stand in a relative strong side in the bargaining table. 4.Even though the contest in the smartphone, Tablet and PC industry is toughly intense, those markets are essentially regulated. When a product is put onto market, the price is fixed. But customers have several(prenominal) bargaining power eg the old generation always cut waste price for customer when new generation go in. to market. 5. Smartphone, Tablet and PC products all have substitute. 6. Lenovo and Apple face strong competition and they have so many rivals in each of their product line eg Microsoft, Sony, HTC, Samsung. product market matrix Product typify NewMarket Present Market Penetration Product development New MarketDevelopment Diversification In product market matrix, Lenovo and Apple p roduct are both in a present market and their product are basically present, so the majority of their product are in the market penetration place. Meanwhile, for rough product like when Steve Jobs launch the iPad in 2010, it was a breakthrough in the digs PC industry. So in some cases some Lenovo and Apple products in some specific time are in the product development place. Growth share matrix Star Question Mark Cash Cow Dog High Share Low ShareHigh Growth Low Growth Because there is obvious potential growing tailor in the smartphone, PC, notebook and tablet industries, meanwhile Lenovo and Apple both have high market share, so in the growth share matrix, they are both STAR companies. Technology Operation Products Comparison Apple Product Lenovo Product PhoneIphone VSLephone NotebookMacbook Pro VSThinkpad Tablet Ipad VSIdeaTab DesktopMacVSIdeaCenter TVApple TVVSLeTV NotebookMacbook Air VSIdeaPad First Mover/Dominant Design For apple product, the first market dominant design is the iPod.Since October 2004, the iPod line has dominated digital music player sales in the join States, with over 90% of the market for hard drive-based players and over 70% of the market for all types of players. 8 The second Apple dominant design product is Ipad. When Steve Jobs released the Ipad on April3, 2010, Apple sold more than 15 million first-generation Ipad previous to the launch of the IPad 2selling more than all other tablet PCs combined since the IPads release, and reaching 75% of tablet PC sales at the end of 2010. 9 Meanwhile Lenovo is the dominant design in the computers supplier area in Mainland China, with a 28. % share of the Chinese market. It reported one-year sales of $14. 9 billion for the fiscal year ending 2008/2009. 10 In October 2012, Lenovo ousts HP became the worlds top supplier of personal computers. In the third quarter of 2013, Lenovo shipped 13. 77million units, giving it a 15. 7% share of the global market, compared with HP, which enjoy ed a 15. 5% share with 13. 55 million units. 11 * Government commandment As far as directly, there is no government regulation for Lenovo and Apple because the government thinks this market is relative fair of compete and regulate.Lock In and Switching Cost In lock in customer strategy, Apple is the master, It makes customer realize that once use the apple product, it is extremely hard to find the exit. Apple creates iTunes, App Store, iCloud and OS system to make this strategy into richly used. Simply speaking, you purchase music, movie in iTunes, purchase apps in App Store and restore/backup photos, music, documents, applications in iCloud. When apple launch a new generation iphone, the customer can simply use the iCloud and iTunes to restore everything from their get going generation iphone.And when customer creates a reminder in the mac, it will mechanically show on their Iphone and Ipad. Since the iCloud only works on Apple product, so this strategy will lock in customer on apple product, and deepen the switching cost if someone wants to change to another company product. Since apples information technology products work in system, so switching any single product is costly. Also Lenovo is currently exhausting to lock in its customer launch the equivalent storage technology called Lenovo Cloud, the user can back up and sync data from aggregate Lenovo devices including LePhone, LePad, and LeTV using a 200 GB online storage.This strategy is to tie the Lenovo tablets and devices unitedly and make the customers feel that switching away would cause too more hassle. Strategy Operation Lenovo For Lenovo their operation strategy is consolidate its market in China and expand its market out of China. Lenovo has its headquarter both in capital of Red China and in United States. They are the leader in China with more than 30 percent market share in PCs, and their product sales in China account for 46 percent of global sales.So with builds on its dominant posi tion in China to grow globally, it plans to have rapid growth in emerging markets and a unique global footprint. In 2012, Lenovo partially moved production of its ThinkPad line of computers to Japan. 12 In October 2012, Lenovo inform that it would start manufacturing computers in Whitsett, North Carolina. 13 In the marketing strategy, based on different levels of consumers, Lenovo developed different prices, by creating differentiated products to see to it different consumer groups. And this strategy is Middle and High End Market Positioning.Take Lenovos personal computer as example, the market survey shows that its refrigerators mainly focus on middle and high end, Lenovo owns 70% market share in high end products, while the middle end count for 4050% market share, the market share of low end product is lower than 10%. 14 As for the supermarket channel, Lenovo has designed relatively low prices of mid-level products, while high-end products on the electrical chain and retail sal es channels. For the homespun market, Lenovo designs and develops products that have relatively simple functions, relatively low prices to meet the need of the students market.Apple For Apple, people would doubt their operation strategy after the past of their superstar leader Steve Jobs, who is the pioneer of Apple. But the new leader Cook operates the company quite well. In cooks first 16 months on the job, Apple has released next-generation iPhones and iPads and seen its stock price rise 43 percent. 15 As is the same with Lenovo, Apple also put a lot of constriction in the Chinese market. With a population of 1. 3 billion, China is the worlds largest mobile market and already Apples second biggest market overall.Apple currently sells its iPhone exclusively through China Unicom with 196 million subscribers. The Apple current CEO Tim Cook checked Mainland China and its supplier Foxcoon In March 2012. And this is the first Apple CEO to visit China, as Apple is ramping up its inv estment in the worlds most inhabited market. Also for Apple, their operation strategy is to make the greatest, most innovation and most simple product in the world, but Apple not only focus on the technology innovation, they focus on the global environment and human right. Apple reports environmental impact comprehensively.They care about the total carbon footprint in the manufacturing and transportation process, also in product use, recycling and facilities. Meanwhile Apple is committed to the highest standards of social responsibility across the worldwide supply chain. They provide safe working conditions, treat workers with self-regard and respect, and use environmentally responsible manufacturing processes to the supplier such as Foxconn in China. 2 Conclusion To sum up, Lenovo and Apple operate in the same environment. They both focus on the smartphone, desktop, notebook, tablet and future TV industry.Since their backgrounds are different, they operation strategies are differe nt. Lenovo is based on Chinese market and consequently spread its product around the world. The product has low prices of mid-level products, while high-end products on the electrical chain and retail sales channels. Meanwhile Lenovo plans to further research its market in Japan and US. In the contrast, Apple has a huge US and global market, their price always lead the market. Right now it plans to further explore its business in China, for it is the worlds most popular market.It is genuine that Lenovo and Apple will have fierce competition in the future market. 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