Apple and Lenovo’s Technology Stratagy

The Technology Strategy Comparison of Lenovo and apple MG 8673 Technology schema Professor Oded Nov Xiaofei Li Table of contents Company Profile 3 Company Vision and Misson 4 SWOT Analysis5 Porters Five Forces6 Product trade matrix 7 reaping Share Matrix8 Technology operation of Lenovo and Apple9 sourceborn Mover/Dominant design 9 presidential term regulation10 Lock-in and Switching Cost10 Strategy operation of Lenovo and Apple11 Conclusion12 Company Profile Lenovo is a Chinese multinational com establisher hardware and electronics company.The company was formed in China and incorporated in HK and would grow to be the largest PC company in China. And in 2005 Lenovo acquired the former Personal Computer Division of IBM. Its carrefours include personal computers, digs computers, mobile phones, workstations, servers, electronic storage devices, IT management software and smart televisions. Today, Lenovo is a US$21 billion personal technology company and the worlds bet on-larg est PC v finaleor1, it has more(prenominal) than 26,000 employees in more than 60 countries serving customers in more than 160 countries2.Apple is an American multinational corporation, incorporated on 1977. It engaged in designing, manufacturing and tradeing mobile communication and media devices, personal computers, and portable digital practice of medicine players. Apple sells a range of iPhone, iPad, Mac and iPod compatible outputs, including a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, assistance and support offerings. It also sells and delivers digital content and applications through the iTunes investment firm, App Store, iBookstore, and Mac App Store.Also Apple is the worlds third-largest mobile phone maker after Samsung and Nokia3. As of November 2012, Apple has 394 retail stores in fourteen countries4. It is the largest publicly traded corporation in the world by market capit alization, 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 goal of becoming the leading personal technology company in the world.It aspires to achieve this goal by leading in three key areas Personal Computers Lead in PCs and be respected for its intersection point innovation and quality. converging Lead the industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and Web content. Culture Become cognized as one of the best, approximately trusted and closely well-respected companies to work for and do business with. 2 2. Lenovo is building a way of viewing the world and doing businessit introduces the newest products in China and then spread across the globe.Also Case Study give describe why Apple Inc. is a very successful company.Lenovo b elieves that the new way of expansion from East to westbound is the way of future 3. Lenovos business is built on product innovation, a highly efficient global supply chain and loyal strategical execution. The company develops, manufactures and markets reliable, high quality, secure and easy-to- apply 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 earth to make great products and thats not changing. They are constantly boil downing on innovating.They believe that we desire to own and control the primary technologies skunk the products that we make, and participate only in markets where they can make a significant contribution. 6 2. Apple is committed to protecting the environment, health and safety of their employees, 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 extensions.Apple strives for unremitting 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 * Mass and strong descent with domestic mainland Chinese customer * Mass Manufacturing and low production cost. * Excellent marketing and distribution strategy. * Merge with IMB Personal Computer * Mundane Outlook * comparative weak Global Brand Perception * Relative weak Online Sales * Not qualifies After-sales Services * Limited knowledge of global market Opportunities Threats Chinese Government Association * Fast growing Personal Computer market * The neighbor hood Indian is becoming the profligateest growing PC market in the world * Signing of memorandum of understanding with USA * Specialty shops providing one s exonerate platform for distribution * Appreciation of RMB will increase product price outside of Chinese market * Competition threats from local and international competitor * Price war * International competitors forming alliance with local competitors. * Industry Reaching adulthood Apple Company SWOT Analysis Strengths Weaknesses Large segment of loyal customer called Apple fans * Strong brand image. * Retail Stores provide the experience and spunk catching Apple product * Huge R&D Innovation * Patent infringement. * Product 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 big company like Google coupled to bring forth new innovation * Apple product lock in customer behavior * Rising popularity ofGoogle Android. Market competition in PC and smartphone industry. * Dependence on specifi c suppliers. * The leadership after Steve Jobs Porters five forces for the companies industry New entrants, bargaining power of supplier, bargaining power of buyers, Substitute, Rivalry 1. Smartphone market share is basically cover by big cellphone manufacture company e. g. Apple, Lenovo, Samsung, HTC, Nokia, Blackberry. They have huge RD innovation, large based and loyalty customer, excellent marketing and advertise strategy. The new entrants are limited in this market, and they are rarely to survive. . This case is the same in Tablet and PC industry. This entrants are also hard to bring 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 product outsource to the supplier such Foxconn. But basically suppliers have comparatively 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 competition in the smartphone, Tablet and PC industry is toughly intense, those markets are fundamentally regulated. When a product is put onto market, the price is fixed. But customers have some bargaining power eg the old generation always cut down 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 Present NewMarket Present Market Penetration Product development New MarketDevelopment diversification In product market matrix, Lenovo and Apple product 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 some product like when Steve Jobs throw the iPad in 2010, it was a breakthro ugh in the tablet PC industry. So in some cases some Lenovo and Apple products in some specific time are in the product development place. fruit share matrix Star Question Mark Cash Cow Dog High Share Low ShareHigh Growth Low Growth Because thither is obvious potential growing trend 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 supreme design is the iPod.Since October 2004, the iPod line has dominated digital music player sales in the United 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 A pple dominant design product is Ipad. When Steve Jobs released the Ipad on April3, 2010, Apple sold more than 15 meg first-generation Ipad prior to the launch of the IPad 2selling more than all other tablet PCs unite 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 annual 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 enjoyed a 15. 5% share with 13. 55 million units. 11 * Government regulation As far as now, there is no government regulation for Lenovo and Apple because the government thinks this market is relative bonnie of compete and regulate.Lock In and Switching C ost 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 fully 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 last generation iphone.And when customer creates a reminder in the mac, it will automatically 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 entropy technology products work in system, so switching any single product is costly. Also Lenovo is currently trying to lock in its customer laun ch the same storage technology called Lenovo Cloud, the user can back up and sync data from multiple Lenovo devices including LePhone, LePad, and LeTV using a 200 GB online storage.This strategy is to tie the Lenovo tablets and devices together and make the customers feel that switching away would cause too much 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 Beijing 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 position in China to grow globally, it plans to have rapid growth in emerging markets and a unique global footprint. In 2012, Lenovo partially go production of its ThinkPad line of computers to Japan. 12 In October 2012, Lenovo announced that it would start manufacturing computers in Whitsett, No rth Carolina. 13 In the marketing strategy, based on different levels of consumers, Lenovo positive different prices, by creating differentiated products to meet 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 sales channels. For the rural 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 hero leader Steve Jobs, who is the pioneer of Apple. But the new leader Cook operates the company instead 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 concentration 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 visited 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 investment in the worlds virtually populous 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 im pact 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 dignity 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 different. Lenovo is based on Chinese market and then spread its product somewhat 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 explore 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 sure that Lenovo and Apple will have fierce competition in the future market. 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