Product Distribution And Coordination Strategies Essay

Question:

Discuss about the Product Distribution and Coordination Strategies.

Answer:

Introduction

The main aim of this task is to provide a brief overview about the marketing plan of Lenovo. Lenovo is one of the fastest growing brands of computers in the world. In today’s era, the firm is becoming leader in the IT sector. The firm offers various products to the customers such as storage devices, laptops, workstation and personal computer. On the other hand, the paper explains that how the firm uses innovative marketing strategies to gain competitive benefits in the foreign market. Lenovo from China is primarily focused and monitored on the foreign market to maximize the profitability. The firm has decided to conducts its business activities and operation in Hong Kong. Therefore various risks and challenges are faced by the company. Environment analysis is done by the firm to eliminate these risks and challenges.

Lenovo group Ltd. is a Chinese multinational technology company with its headquarter is located in Beijing, China, North Carolina. It produces various products such as personal computer, smart phones, tablet computers, workstations, servers, electronic storage devices. In today’s era, the company operates its business activities and operations in more than 60 countries and sells its products in around 160 countries. The firm is listed on the Hong Kong stock exchange. The organization employs approx 60,000 employees. Lenovo is one of the biggest personal technology companies who is producing innovative and new PCs and mobile internet devices. It is the biggest PC vendor and third largest Smartphone organization in the world. Various effective IT softwares are being produced by Lenovo Company in the marketplace (Lenovo, 2018). It is observed that Lenovo is one of the leading PC companies in the world.

The vision of the company is to create personal devices to inspire and motivate people in the international market. The mission of the firm is to become one of the biggest personal technology companies in the world. In addition, the culture of Lenovo Company is unique and dynamic. Yang Yuanqing is the CEO and an executive director of the firm (Lenovo, 2018).

Environment analysis

Environmental analysis plays a vital role in the organization to reach the customers in Hong Kong. By conducting environmental analysis, the company tries to evaluate and analyze the tastes, preferences and choices of the customers. Lenovo provides variety of products and IT solutions to the consumers globally (Yin, Gao and Xu, 2014). The organization wants to expand and explore its business operations in Hong Kong. Therefore, environmental analysis is done by the company to beat the competitors widely. The environmental analysis encompasses internal analysis and external analysis. The firm cannot control on the external factors therefore, pestle analysis is done by the company. Apart from this, SWOT analysis is also used to analyze and identify the threats and weaknesses of the competitors in the global market (Jerrard, 2013).

Lenovo is a well known and reputed company in the world and it has been ranked as one of the top brands in the technology sector. The main competitors of the company include Dell, HP and Acer. Toshiba and Apple also influence the success and growth of the firm adversely (Dan-hong, Wei-dong and Hua-dong, 2015).

Political factors: In today’s era, the political factors are growing in the business. There are various factors exist in the Hong Kong which may influence the operations and activities of Lenovo negatively. The Hong Kong has been adopting one country two system policy since 1970. The county has the authority of legislation, judiciary and administration. In this way, political stability is very high in the country. The country does not impose import duties like china does. Apart from this, capital movement is also free in China. Furthermore, the government of Hong Kong tries to address and avert the housing issues and conflicts. It will help to the company to flourish its business in such country (Johnson, 2016).

Economic factors: The global economic condition of the country has changed since the recession. Hong Kong is the third financial center in the world. The economic structure of the country is very strong and unique. The growth was noticed lower in 2016 (1.4%). The government of the country seeks to stimulate the economy, as it improves access to housing and optimizes economic potential. Inflation rate was also lower in 2016 (2.4%) than in 2015(3%) as it is expected to continue below 2% throughout 2017. In this way, the company can gain competitive advantages by starting business activities in such country (Nelson, 2015).

Social factors: Some of the social factors which could influence the growth and success of Lenovo Company in Hong Kong. The social factors include customs, values, languages, beliefs and culture. Cantonese is the national language of Hong Kong. The country maintains bilingual society and English language is used by people in their daily work. Many foreigners who come from America, Australia, Britain, Philippines, Japan, Pakistan and India working in Hong Kong speak Cantonese. In this way, the country is well integrated society in the world. Furthermore, the country keeps technicians and supervisors to perform tasks and duties effectively. Now it shall be noted that the company can take various advantages by initiating its activities in such country (Warner, 2014).

Technological factors: The country uses innovative technologies to conduct business operations successfully and effectively. Along with this, the country use innovative infrastructure materials in the marketplace. Government incubation programs also help the company to start business in such country (Wang and Pizam, 2011).

Legal factors: The Hong Kong is well known and famous for its simple tax system. The tax rate is low in the country. The profit tax rate is 16.5% for organizations and 15% for individual’s sole proprietors (Guidemehongkong, 2018). In this way, the legal system in the country is effective and transparent. If the Lenovo Company initiates its business in Hong Kong then it can maximize its profitability and revenue.

Environmental factors: Sustainability is a significant trend in the 21st century. Most of the companies are investing in the sustainability practices to create a sustainable brand in the marketplace. The organization is focusing and analyzing the renewable energy portfolio to increase its productivity and performance as well. In this way, it is assumed that Lenovo Company can start its operations in Hong Kong for gaining its long term goals and objectives (Chiu, 2018).

SWOT analysis

SWOT analysis is stand for strengths, weaknesses, opportunities and threats. SWOT analysis is used by the company to analyze and identify the threats and opportunities in the Hong Kong (Katie, 2011). The SWOT analysis of the company can be summarized below.

Strengths

  • After the various researchers, it has been evaluated that Lenovo is the third biggest technological enterprises in terms of sales.
  • Lenovo enjoys a high market share of about 29% in the Chinese computers market.
  • Along with this, the company manages its cost effectively in order to achieve high effectiveness.
  • The firm also uses good marketing and distribution strategies in the marketplace. Lenovo is very unique and quick at responsiveness. They have 24*7 technical support centers (Chan and Cui, 2014).

Weaknesses

  • Lenovo is unable to sustain growth rate in the entire market segment.
  • Due to immense competition, market growth share is slow. In case of Hong Kong market, customers are able to mistrust the brand Lenovo as it poses an IBM logo.

Opportunities

  • It increases global demand for PC.
  • Along with this, Lenovo increases product portfolio/product lines in the marketplace.
  • The company distributes the products at reasonable prices as it provides various opportunities to expand and explore the business.

Threats

  • High and immense competition is one of the biggest threats for the company in local as well as international market.
  • Apart from this, there are various small firms engaged in the global market.

Evaluation of current marketing strategy

The first marketing theory which has been used by the company is the fair marketing strategies. The organization has built and developed a fair and unique position among the client base. There are two main focus of the company in order cover the market in Hong Kong. The firm uses customer relationship strategy to retain the existing customers in the marketplace. One of the biggest and unique strategies adopted by Lenovo refers to render the products to the customers with the best of the quality and support system (Kotler, 2015). Along with this, the main motive of the organization is to build unique relation which could help to increase the number of customers. The firm also uses transaction model to evaluate and analyze the marketing strategy in the global market. Low manufacturing cost and high level of R&D would also help the company to establish itself in the Hong Kong market. Although, Dell and Hewlett also try to attract the customers in the same market, Lenovo has taken various strict steps in advance which could help to overpower others (Rothaermel, 2015).

Along with this, product differentiation strategy is also used by the company to provide several types of product in the corporate market. This strategy also helps to differentiate its products from the competitors. By using this strategy, Lenovo has been able to focus on the niche market (Lee, 2014). This strategy helps to generate more and more revenues in the international market. On the other hand, different distribution strategies are adopted by the organization which can be divided into three categories such as intensive distribution, traditional distribution and integrated distribution. By using distribution strategies, the company is able to distribute the products and services effectively. The other successful and effective strategy used by the organization refers to full use of branding. Lenovo uses IBM name in a hassle free manner. The brand IBM has developed and built a strong brand name for the organization as it also helped the company in order attract and retain the customers in the foreign market (De Mooij, 2013).

Analysis of the organizations competitive advantages

Some of the competitive advantages which have been taken by Lenovo in the international market have been stated below.

  • The company manages cost effectively as compared to Dell and Acer. In this way, the firm can take cost benefits in the marketplace. Along with this, the firm uses effective leadership strategies and styles to achieve high effectiveness.
  • Lenovo’s distribution and marketing strategies and policies also in favor of the firm. These strategies help to overcome the competitors globally.
  • Another unique competitive advantage is that Lenovo has provided quick responses to the customers. They provide 24hours services to the customers. Apart from this, the organization has a strong and unique research and development team through which they look from IBM.
  • In addition, vertical integration system is used by the firm to maintain effective and unique supply chain management in the organization.
  • Moreover, the company enjoys strong patent portfolio and low cost production. Lenovo has also a diverse workforce and synergy of competency and knowledge which could help the firm to stay in the rivalry market (Kotabe and Kothari, 2016).

STP (Segmentation, positioning and targeting) strategies

In the market segmentation, the company can focus on the age group, education level and occupation. The firm divides its market on the basis of gender, age, demographic, behavioral, geographic and psychographics factors. Segmentation strategy is used by Lenovo to analyze and evaluate the habits, choices and tastes of the customers in Hong Kong market. China, Middle East countries, India and Africa are main target market of Lenovo. No company can survive its business without using segmentation strategy in foreign market. The target market of Lenovo consists of corporate customer, individuals and professionals who want to enjoy their lives and want to make their life simple (Hiriyappa, 2013).

The company is trying to targeting elderly (65-80) age group people in the Hong Kong. The buying habits of elder people cannot be overlooked in PC market because most of the buyers monitor the stylish appearance and lightweight portable design rather than the computer performance. The people who are the age between 65-80, buy Lenovo products widely. Along with this, the customers who have the high level of education, and are aged above 60, buy the products of the organization. In addition, the customers who have strong brand awareness are part of the firm. Additionally, students and house makers who need system for their study and daily work purchase Lenovo PC and smart phones (Glowik, 2016).

Positioning: The Company uses positioning strategies to create a good image in the Hong Kong market. Under this strategy, the firm provides products and services at affordable prices. It helps to stand out against the competitors in such market. The organization has positioned itself based on the product and value based positioning strategies. In this way, the firm can grow its business in the Hong Kong market. Apart from this, unique and attractive products are being developed and manufactured by the organization to meet its long term mission and vision. It will also help to analyze and measure the requirements and wants of the target market. By using STP strategies, Lenovo has been able to make a good image in the minds of the potential customers (Yeung et al. 2011).

Recommended marketing objectives and goals

The recommended marketing objectives and goals have been stated below.

  • It is recommended to Lenovo that it should provide products with best quality at appropriate prices. The firm should adopt the policy of diversify and split to manufacture the products in a hassle free manner. Along with this, the firm should focus on diversify to attract the corporate market because the company wants to maximize the profitability in Hong Kong.
  • Along with this, Lenovo wants to make a attractive brand image in the minds of the customers. For this purpose, the firm should focus on the prices and quality of the products. Lenovo has a significant customer base in the Chinese market. Therefore, it must focus upon the Hong Kong market. It is observed that HP, Apple and Dell are some of the important players in the same segment.
  • It shall be recommended that the firm should use their own logo rather than using IBM’s logo. It will help to destroy the competitors in the market.
  • The other mission of the company is to become a great personal technology company in the world. For this purpose, the firm should analyze and identify the threats and opportunities of the Hong market and competitors as well.
  • Furthermore, the company’s goals are to grow and increase market share and revenue while simultaneously developing and building a global culture in the market.
  • In addition, the firm wants a make a favorable and sustainable environment in Hong Kong. To attain sustainability, the firm must monitor and indentify the strategies and policies of the rivalries. These are the objectives and goals of the firm which Lenovo wants to attain in the Hong Kong market.
  • Apart from this, Lenovo wants to famous and reputed company in the Hong Kong. For this purpose, the firm should focus on the marketing and distribution strategies in such country.
  • By maximizing the sales percentage by increasing the manufactures rate of core brands.
  • In addition, the firm should produces some new and innovative products in the Hong Kong market through innovation in research and development team.

Marketing mix of Lenovo

The marketing mix strategy is initiated by the company to grow its business activities in Hong Kong market (Huimin and Hernandez, 2011). The marketing mix stands for product, price, place and promotion. Marketing mix for Lenovo Company are discussed as under:

Product: Lenovo refers to an organization which produces and manufactures Laptop, PC’s, software’s and storage device etc in the market. Various IT software’s delivered by the firm are marketed under the name of Think Vantage & they help to generate half of the revenue and profit in China and Asia specific regions. Apart from this, the organization produces unique and effective products in Hong Kong to maximize revenue and minimize risks and challenges. In addition, highest revenue generating countries include Japan, China and US. Most of the laptops and software’s are being sold in these countries. If the firm wants to explore its business in the Hong Kong, then it should focus on the threats and risks of rivalries in such country (Kahn, 2014).

Price: The prices rendered by the firm are higher than its competitors i.e. Apple, HP and dell etc. Although the prices are high but the quality offered by the company is better than its rivalries. To attain competitive advantages in Hong Kong market, Lenovo must monitor the prices of the competitors. It will help to beat the competitors in such market (Fitzroy, Hulbert and O'Shannassy, 2016).

Place: Effective place strategies are used by the firm in Hong Kong to distribute its products and services easily. It will help the customers to buy the products and services easily. Effective and unique strategies are used by Lenovo to decide the place for selling the products. Some of the centers where the company is operated its business operations such as China, Singapore and US.

Promotion: Advertisement and promotion strategies are initiated by Lenovo to attract more and more clients in the marketplace. These strategies help to increase number of customers in the Hong Kong (Jerrard, 2013).

Appropriate marketing strategies

The appropriate strategies of Lenovo have been stated below.

  • Ambitious strategy is used by the company to attract and retain more clients in the market. By adopting this strategy, the firm has been able to distinguish itself from its competitor apple which is offered costly products to the customers (Cornelissen and Cornelissen, 2017).
  • Along with this, unique distribution strategies can be used by the company to create a brand loyalty in the minds of the customers. Advertisement and promotion campaigns can be done by the firm to promote and encourage its products in the Hong Kong market. The promotion strategy of the marketing mix helps to make effective promotion strategy in the Hong Kong.
  • The firm can use diversification strategy to manufacture the products with different features. In addition, market development strategy is also initiated by the firm to increase the sale and revenue of the firm. This strategy is used by the company to stimulate the prices of the products (Chianasta and Wijaya, 2014).
  • Moreover, branding strategy can be implemented by the firm to increase the brand awareness among the customers in the Hong Kong. It will also protect the rights of the consumers (Bui, 2017).

Monitoring and control are essential to focus on the customers in the Hong Kong market. From the financial and learning perspective, monitoring and control is also significant. Without monitoring and controlling, Lenovo cannot attain success and growth in the targeting market. Monitoring and controlling also help to eliminate any variation which is found in the foreign market.

Budget is important part of the marketing plan which helps to make effective marketing plans, strategies and programs. Therefore, effective and appropriate budget is fixed by the company to initiate the business activities in the Hong Kong.

Conclusion

On the above mentioned study, it can be concluded that Lenovo is one of the biggest brands in the world. Furthermore, it is seen that the company uses effective technology and software which could help to upgrade its efficiency and effectiveness of the products in the international market. On the other hand, SWOT analysis, porter five forces analysis and pestle analysis are done by Lenovo to evaluate and identify the plans and strategies of the market as well as competitors. STP strategy is one of the attractive strategies of the organization which would help to reach the potential customers in the international market. Along with this, the firm uses marketing mix strategy to hit the competitors in the Hong Kong. By using unique marketing strategies, Lenovo has been able to gain competitive advantages in the global market. Effective and appropriate budget is also made by the firm to manage marketing strategies. Integrity, customer satisfaction, dedication, innovation, care are main core values of the firm. Moreover, the firm focuses on the customer’s satisfaction and sustainability to make bright future in the Hong Kong. The firm also maintains effective management team to resolve issues and challenges of the customers. In this way, the firm can attain its long term goals by initiating business activities and operations in such country.

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