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Lenovo Group SWOT & PESTLE Analysis

ID : 52603153| Sep 2020| 15 pages

COMPANY PROFILE -Lenovo Group

Business Sector :Consumer Electronics

Operating Geography :China, Asia, Global

About Lenovo Group :

Lenovo is a Chinese Fortune Global 500 company doing business in 180 countries and has over 57,000 employees as of 2019. The company’s vision is to create personal devices which people are inspired to own, a culture which people have aspirations of joining, and a trusted business that is respected worldwide. There are two business groups: Intelligent Devices Group which includes PCs, Smart devices and Mobiles, and the Data Center Business Group that includes networking, servers, software, services and storage. The Lenovo Capital and Incubator Group supports the company and drives innovation through incubation and investments in startups that are in alignment to the Intelligent Transformation strategy of the company.
Lenovo's intelligent device group leads the company's strong performance even in 2020. Under this business segment, PC and Smartphone Devices are the star units that continue to lap huge profits. Lenovo holds a share of 24.4% of the PC market retaining its #1 position in PCs.
Also, Lenovo is expecting further growth by leveraging its innovation as demonstrated in the launch of ThinkBook Plus with a top cover e-ink display, ThinkPad X1 Fold laptop with a foldable screen, and the world’s first 5G PC – Yoga 5G, in the year 2020.
Furthermore, the launch of Motorola Razr in 2020 is a re-entry of the company in the premium mobile segment, an ongoing focus in the future. Lenovo's hybrid manufacturing business model is another significant source of competitive advantage for the company. The business model is a mix of both company-owned production capabilities and original design manufacturers (ODM) that serves the purpose of developing innovative products more efficiently while making the management of product development and supply chain operations more effective and easy.
Lenovo Group Mission is to be the Leader and Enabler of Intelligent Transformation. Lenovo's USP or Unique Selling Proposition lies in being the world's largest personal computer vendor by unit sales, as of the first quarter of 2020. It is also one of the largest hardware companies in the world.

Lenovo Group Revenue :


$51.03 billion- FY ended March 2019 (y-o-y growth of 13%)
$45.35 billion- FY ended March 2018

Competitive Analysis of Lenovo Group

SWOT
PESTLE
Lenovo is titled as the world's largest PC Vendor, third-largest smartphone company, and one of the largest hardware companies globally. Clearly, Lenovo's core competencies present the company with an edge over its rivals. Thus, the SWOT tool helps to identify all internal and external factors that influence the business and its operations. The SWOT analysis uncovers a discussion on how the company builds on its strengths to overcome internal weaknesses and stem threats in its macro environment. The analysis also showcases pertinent opportunities in its external environment that can be incorporated to further strengthen the company.
Lenovo stands as a top player in the computer & hardware industry due to some of its impeccable strengths like a leading position in the PC market, large and innovative product portfolio, extensive exposure in Chinese and other emerging markets, exceptional marketing and distribution strategies, sturdy products with economical pricing, etc.
However, the company needs to further build on its strengths to overcome some of its inherent weaknesses like lack of brand perception in developed economies, frequent product recalls, slow market share growth due to high competition and counterfeit products. Business expansions, strategic alliances and partnership, penetration into newer markets, etc. are growth opportunities that prevail in Lenovo's external environment. Besides, 2020 will continue to be a year of further investments in Lenovo's mobile business to stimulate current and future growth opportunities in novel and lucrative markets.
Intense competition from international and local players, clone market, price wars, rapidly changing technology, software piracy, etc are threats that can hinder Lenovo's growth and profitability.
The SWOT analysis for Lenovo Group is presented below in a matrix followed by detailed analysis:
Strengths
Weaknesses
1. Strong financial performance across the Group
2. Global leader in traditional PC market
3. Successful brand building initiatives
4. Geographically diversified revenue mix
5. Focused on strengthening capabilities as a provider of end-to-end solutions
6. Transformation of traditional server business into a complete portfolio data center organization
1. Weak smartphone business compared to competitors
2. Cyber-attacks and data breaches
Opportunities
Threats
1. Growing global smart home market
2. Opportunities in data center market in India
3. Strong market potential in Internet of Things (IoT) business
1. Trade war and distrust against Chinese companies in United States
2. Financial risks due to global scale of operations
3. Disruption in supply of components, services or systems
4. Risks associated with quality management process
5. Strong competition and rapidly changing market trends
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Lenovo Group

 

Strength

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Weakness

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Opportunity

1. Growing global smart home market: According to industry research, the smart home market is expected to grow at a CAGR of 12.02% from $76.6 billion in 2018 to $151.4 billion in 2024. The growth drivers are: large number of internet users, increasing usage of smart devices, rising awareness of healthy lifestyles and fitness, rising importance given to monitoring homes from remote locations and rising need for energy efficient solutions. There are huge growth opportunities in the Asia Pacific market, especially in China, Japan and Australia. This region is predicted to have the highest growth rate during 2018-2024 due to rising population, strong economy, rapid urbanization and rapidly improving standards of living. China is expected to be the largest market in this region. Lenovo has a wide range of smart home devices like Smart Bulb, Smart Plug and Smart Camera. All the components of the Smart Home can be controlled from the customer’s phone through the Lenovo Link app. Smart Display and Smart Tab are other Smart Home solutions to enable a great customer experience.

2. Opportunities in data center market in India: Many local and global data center operators are investing heavily in India, especially in the cities of Mumbai, Bengaluru and Hyderabad. Telangana and Andhra Pradesh are two states that are likely to become major locations for mega data centers. According to a research conducted by Arizton, the data center market in India is expected to grow at a CAGR of 9% during 2018-2024 to reach $4 billion by 2024. Lenovo is taking advantage of the growing data center opportunity in India by collaborating with government partners and startups for expansion of its data center business in the country. India is one of the 10 countries identified by Lenovo for data center expansion. The company has invested $1.2 billion in artificial intelligence R&D to expand its manufacturing facility in Chennai for data center offerings too. Lenovo thus expects revenues of $5-6 billion from the Indian market by 2021.

3. Strong market potential in Internet of Things (IoT) business: According to projections by Bain, the IoT market is expected to double between 2017 and 2021, reaching $520 billion. Lenovo has announced in 2019 its plans to quadruple IoT investment. The company is developing an IoT solution bundle combining hardware, software and services. IoT is a great opportunity for diversification beyond the core PC business, leveraging existing enterprise relationships. The IoT solution bundles and Smart Vertical Group tailor IoT solutions for specific industry use cases. The company can sell these products to existing clients of the PC and data center businesses.

Threat

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Major Competitors :

Major Brands :

  • ThinkPad
  • ThinkBook
  • IdeaPad
  • Yoga
  • Legion
  • Universal Lighting Technologies
  • IdeaCentre
  • ThinkCentre
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?

1. Lenovo’s SWOT and PESTLE analysis report substantiates an understanding of the complex internal and external factors shaping the brand and its operations.
2. The SWOT analysis report consolidates internal and external analysis. Internal analysis manifests a discussion on how Lenovo can augment its strengths and overcome its weaknesses, whereas the external analysis helps to identify the opportunities for development and eliminate threats that can impede growth.
3. The Pestle analysis highlights the current trends in the consumer electronics industry with an explicit depiction of macro factors and its influences on the industry and largely on the Lenovo company.
4. The analysis report helps in identifying the impact on Lenovo's business model by the influencers like political, economic, social, technological, legal and environmental factors
5. Outline of Lenovo's merger, acquisitions, capital raising, equity transactions, alliances or partnership ventures, deal valuations, and the synergies that were accomplished with them.
6. Comprehensive company analysis to infer information about company profile, business model, business plans, and marketing strategy, including abstract data of Lenovo's subsidiaries, value proposition, and revenue jumps.
7. Summarization of Lenovo's USP or unique selling proposition, mission statement, and vision statement
8. Penetrations into Lenovo's business model, along with further categorization and analysis of key business segments and business case study.
9. Crisp synopsis of Lenovo's core competencies that added competitive advantage of the company over its major competitors.
10. Identifying the core values, key performance indicators, and success factors that contributed to sustainable growth and proliferation.
References used in Lenovo Group Analysis Report

1. Annual report 2018/19 - https://doc.irasia.com/listco/hk/lenovo/annual/2019/ar2019.pdf

2. Investor presentation 2018/19 - https://investor.lenovo.com/en/financial/results/presentation_1819_q4.pdf

3. India on the verge of significant data center expansion - https://www.thehindubusinessline.com/economy/india-on-the-verge-of-significant-data-centre-expansion/article26272072.ece

4. Lenovo to grow data center business - https://economictimes.indiatimes.com/tech/hardware/lenovo-to-grow-data-centre-business/articleshow/65570153.cms?from=mdr

The detailed complete set of references are available on request in the 'Complete report' on purchase.

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SWOT & PESTLE.com (2020). Lenovo Group SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/lenovo-group/ [Accessed 26 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Lenovo Group SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

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Lenovo Group SWOT & PESTLE Analysis
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