Lenovo Vs. Helwett Packard in the Chinese market

Résumé du document

The Chinese PC market is, behind the US, the second largest market in the world.
With its 1.3 billion inhabitants and an expected market growth of 19%, the Chinese PC
market is probably one of the most interesting emerging markets.

While the local companies were very strong in the past, they now have intense competition with the western giants that have entered the industry. The market leader is still the home-grown Chinese company Lenovo, which got globally well-known after the acquisition of IBM's PC division. Now in 2008, one of its most aggressive competitors is the famous American
company Hewlett-Packard which is the No. 1 in the global market. With its new products, HP tries to gain new market shares in China and compete against Lenovo in its own market, while it has just started acting globally. Whereas, Lenovo has excellent market knowledge and a tough low cost advantage, HP
has universal experience in technology and advertising and a high brand recognition.

Where some years ago the focus was on the corporate and governmental market in China, the consumer market is now rapidly growing. Especially in larger cities, where incomes are higher, lie new opportunities.
Although HP and Lenovo have a slightly different positioning in the market, they are both trying to 'win the race' in the mass market.

This report compares the two rivals, Lenovo and HP, in the Chinese market and analyzes the industry, the companies and their marketing strategies. The aim of our research is to provide information about the Chinese PC Market for present and future companies with recommendations based on the different opportunities of the market.

In order to create a complete overview we started with a detailed analysis of the Chinese PC market (SLEPT, 5-Forces, Market shares and Segmentation). Sequentially, we compared HP and Lenovo according to their marketing strategies and their performance in the market (SWOT, Targeting and Positioning).

Finally, we presented our concluding analyses and our recommendations to the companies that
contained the essential ideas of our work.

Extraits

[...] Zhu, Lenovo Group Limited departure project Datamonitor, Hewlett-Packard Company Jul 2008 Datamonitor, Lenovo group Limited Kim, Ryan: HP's new laptop joins new breed of ultralights, SFGate.com, April 2008 Official papers DIRECTIVE 2002/96/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 January 2003 on waste electrical and electronic equipment (WEEE) U.S. Consumer Product Safety Commission, HP Recalls Notebook Computer Batteries Due to Fire Hazard http://www.cpsc.gov/cpscpub/prerel/prhtml06/06145.html Articles from the Internet. P. Allart, L'offre des Netbooks à bas coût http://www.aful.org/metamorphose/ultra-portables-umpc dans le monde B. Einhorn, China: Lenovo Plunges as Rivals Gain, businnesweek mai 2008 http://www.businessweek.com/globalbiz/content/may2008/gb20080523_819903.htm J. Etienne, Le vol de Shenzhou 7 est programmé : ce sera le 25 septembre, futurasciences,2008 http://www.futura-sciences.com/fr/news/t/astronautique/d/le-vol-de-shenzhou-7-estprogramme-ce-sera-le-25-septembre_16718/ F. Innocente, Le notebook s'installe dans le paysage des portables, macgeneration, 11/12/2008 http://www.macgeneration.com/news/voir/132976/le-netbook-s-installe-dans-le-paysageJ. [...]

[...] Search for a product in the higher price category. Expect “state-of-art” features. Age estimation: 25 40 (Yuppie) Group 11 Oufti'M SWOT analysis: 3.1 Lenovo Strengths Best market position in China Premium PC distribution network and manufacturing capacities Was directly established in low-cost countries large product ranges Experience (even more after IBM PC Division acquisition) Strong brand image Low marginal costs Weaknesses Low margins and returns on investments Lack of experience outside China Reputation of Chinese products Opportunities Strategic alliances (e.g. [...]

[...] The big losers for now are China's small computer makers. These companies benefited from a five-year government program to supply computers to schools in the Chinese countryside, which has now concluded.19 Although the private PC market is rapidly growing in China, the State, big multinational companies and educational institutions, are still representing a large part of the market. This ‘force' of the buyers has still an impact on the industry as we see by the example of the small Chinese companies http://www.businessweek.com/globalbiz/content/may2008/gb20080523_819903.htm 6 Group 11 Oufti'M 2.3 Market Shares While the world-wide PC market is still ruled by the big American global players HP and Dell and the Taiwanese Acer, there is very strong competition in the Chinese PC Market, which is the second biggest market besides the U.S. [...]

[...] Economical: low labour costs7 Future demand PC industry lies in the marketing of notebook computers to SMBs and consumers in emerging markets8. The manufacturing industry is extremely profitable but the competition is very intense. New economic Policy, 1991: - Economic liberalization which gave enormous opportunities to the Indian firms to get global as well as opened the doors for foreign companies 2 J. Brinkhus, K. Keaney, K. McLaughlin, B. Smith, Z. Zhu, Lenovo Group Limited departure project pp J. Brinkhus, K. [...]

[...] One example of this is the Idea-range. These are declined both in laptops and desktops and provide lot of creative functions for an affordable price. While the IBM brand is still used in the medium price segment, they sell their Yuanmeng line of PCs on the Asian market for a very low price39. They also continue to sell the ultra portable Thinkpad and the professional desktops but these are more expensive than others computers http://welcome.hp.com/country/cn/zh/welcome.html http://www.pcworld.com/article/122435/lenovo_finds_success_with_cheap_pcs.html 40 http://www.lenovo.com.cn/ Group 11 Oufti'M Positioning With all what we have notice above, we can summarize the positioning of both company in one sentence. [...]