Académique Documents
Professionnel Documents
Culture Documents
ON
SUBMITTED TO:
Authorized Signatory
DATE:
I, Shishir Garg (PG 09 40047), hereby declare that the project report entitled
FEASIBILITY OF NOTEBOOKS AGAINST DESKTOPS, which is
being carried out at LENOVO INDIA PVT LTD., GURGAON during the
SUMMER INTERNSHIP PROGRAM of our college, ACCMAN INSTITUTE
OF MANAGEMENT, GREATER NOIDA, as the partial fulfillment of the
requirement for POST GRADUATE DIPLOMA IN MANAGEMENT
(PGDM 2009-2011) as per the AICTE norms, submitted to my Project Guide
Mr. Pyush Khanna (Business Manager, UP and Uttarakhand, LENOVO INDIA
PVT LTD.), to my faculty Guide Prof Subir Guha (Faculty, ACCMAN Institute
of Management) and to Prof S C Ghosh (CHIEF CRIC), is my original work and
not to be submitted for the awards for any other degree, diploma, fellowship or
any other similar title or prizes.
Shishir Garg
(SHISHIR GARG)
(PG 09 40047)
Acknowledgements
Making of this project was a tough job for me, right from understanding the topic to
completion of the project; every other work questioned my abilities, attitude, innovative
skills, inter-personal skills and the learning process about the subject (BUSINESS
RESEARCH) which began couple of months ago.
Thanks to some wonderful people who were with me in the form of Guide, teachers,
motivators, parents and of course our competitors who motivated me and instilled in me
the confidence I needed desperately to do the job.
While it is not possible to name all of them, I would still like to mention a few important
ones . . . .
I would like to give my sincere thanks to my Project Guide Mr.Pyush Khanna, Faculty
Guide Prof Subir Guha, motivator and CRIC Chief Prof S C Ghosh, my corporate
Mentor Mr. Siddarth Sharma & all other faculties and some wonderful intellectuals at
LENOVO INDIA for keeping the faith in me. I would like to thank the CRIC of ACCMAN
Institute of Management for providing such a wonderful experience of Summer Internship
Program at such an esteemed organization LENOVO INDIA PVT LTD. THE WORLDS
LARGEST PC MANUFACTURER.
I would like to thank to my friend, batch mate and colleague in this project, Mr. Deepak
Kumar; we both have helped each other a lot whenever we felt some very hard problems,
and we faced those problems very boldly. It was a very good experience to do my
Summer Training with such a gentle man.
I would like to offer my thanks to my friends and family members who were there for me in
every thick and thin of mine. Every time, I felt tired and defeated they uplifted and filled me
with energy. They understood me when no one could. Without mentioning the names I
wish to thank them .. I know they will understand my feelings for them.
SHISHIR GARG
Date:-12\07\2010
INDEX
1. COVER PAGE.
2. CERTIFICATE FROM LENOVO INDIA PVT LTD.
3. DECLARATION FROM THE CANDIDATE.
4. ACKNOWLEDGEMENT.
5. INDEX.
6. EXECUTIVE SUMMARY.
7. OVERVIEW OF INDIAN PC INDUSTRY.
i.
ii.
iii.
iv.
v.
vi.
vii.
Introduction
History
Major Players.
Critical Success Factors
PEST Analysis
Structural and Regulatory Reforms.
Future of Indian PC Industry.
8. COMPANY PROFILE.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
Background.
Vision.
Mission.
Culture at LENOVO.
Objectives.
Awards and achievements.
Performance Heighlights-2009-10.
Recognitions.
Range of Products and Services.
Michael Porters five forces Model.
TOWS Matrix.
SWOT Analysis.
Strategic Analysis.
Financial Position.2009-2010.
Questionnaire.
Observation.
E- Mail.
Interview.
EXECUTIVE SUMMARY
We started our summer training at Gurgaon branch of LENOVO INDIA PVT
LTD with an exuberance of exploiting the awaited opportunity to get the much
needed corporate exposure on May 01, 2010.
After a couple of days of induction, we were assigned to work on the feasibility
of notebooks against desktops. We grabbed this task as a challenge to prove
ourselves and hence, proceeded with a great excitement towards the
accomplishment of the same. This project gave us an exciting chance to aware
ourselves with the overall knowledge of the existing PC Industry in India.
Though, every other work challenged our skills and dedication, we also managed
to get rid of those with the help of some wonderful people around us.
It was a mixed experience of sorrow and delight while we were scanning through
every nuke and corners of several corporate, B schools, malls and even
individuals. At one place where we received a warm welcome with a glass full of
cold water in such a scorching Sun over our heads, at the other, we were just
pulled out of the doors. Yet, when our survey came to an end, we got a
marvelous response along with a bunch of corporate contacts, which might help
us in our future endeavors.
Also, we managed to excavate some astonishing facts related to our objective
which is hoped to be helpful to LENOVO, in order to strengthen their business
empire. All the findings, along with respective suggestions and recommendations
have been encrypted in our analysis part.
Finally, we extend our heartiest thanks to Mr. Siddharth Sharma, in whom we
saw a glimpse of corporate excellence and a wide source of learning through his
experiences, Mr. Piyush Khanna, our project guide, who could share only a few
of his valuable experience and guidance owing to his very busy schedule and
honorable Ghosh Sir, Chief CRIC, ACCMAN, who provided us such a
wonderful opportunity to work with such a reputed global brand.
HISTORY
The PC Industry in India started on a high growth path in mid 1980s. With the New
Industrial Policy of 1984-85, the Indian PC industry was liberated from heavy
government regulations (namely, the Monopolies and Restrictive Trade Practices Act)
on import of foreign technology and was allowed to form collaborations with foreign
firms.
8
MAJOR PLAYERS
FACTORS
WEIGH-TAGE
LENOVO
HCL
DELL
ACER
HP
T.W.
T.W.
T.W.
T.W.
T.W.
COST
EFFECTIVENESS
0.3
2.4
1.8
1.5
7.5
2.25
2.1
CORPORATE
CULTURE
0.05
0.3
0.4
0.3
0.3
0.35
SERVICES
RENDERED
0.1
0.8
0.6
0.6
0.6
0.8
CUTTING EDGE
TECHNOLOGY
0.05
0.45
0.35
8.5
0.43
0.3
8.5
0.43
BRAND
IDENTITY
0.15
0.9
1.35
1.05
0.9
1.2
CUSTOMER
SATISFACTION
0.15
1.35
1.2
1.2
1.05
1.35
EMPLOYEE
BASE
0.05
0.35
0.45
0.25
0.25
0.4
AESTHETIC
FEATURES
0.05
0.3
0.35
0.45
0.3
7.5
0.38
MARKET
SHARE
0.1
0.3
0.4
0.5
2.5
0.25
0.8
10
PEST ANALYSIS
A PEST analysis most commonly measures a market. Generally speaking a SWOT
analysis measures a business unit or proposition or idea, whereas a PEST analysis
measures the market potential and situation, particularly indicating growth or decline,
and thereby market attractiveness, business potential, and suitability of access market
potential and 'fit' in other words.
PEST helps to identify SWOT factors.
PEST assesses a market, including competitors, from the standpoint of a particular
proposition or a business, whereas SWOT is an assessment of a business or a
proposition, whether of your own or a competitor's.
All businesses benefit from a SWOT analysis, and all businesses benefit from
completing a SWOT analysis of their main competitors, which interestingly can then
provide some feed back into the economic aspects of the PEST analysis.
The four quadrants in PEST vary in significance depending on the type of business,
e.g. social factors are more obviously relevant to consumer businesses or a B2B
business close to the consumer-end of the supply chain, whereas this is not the case
with SWOT.
i.
Government Stability
As we know that government instability leads to economical & political hazards
like inflation, dumping share markets, etc. hence government stability is a boon
for the growth of any industry.
ii.
11
iii.
Special Incentives
Such types of perks are provided to the employees in order to motivate them
towards their contribution and commitment. These special incentives fill
exuberance among the employees and thus increase the CAGR/SAGR of the
organization.
iv.
b. Economical Factors
i.
GDP Trends
A country is known by the services it offers. Indian PC Industry contributes 7%
of the overall GDP growth of India.
ii.
Inflation Rate
While entire industrys growth rate declined during the global meltdown,
Indian PC industry also experienced the Inflation rate of 11.89%.
iii.
Employment Generation
Approximately 10 million people are working in this industry and it is expected
to grow at the rate of 22% in the next decade.
iv.
Pricing Strategy
With the intervention of open market, a revolution emerged, as a result of which
major global player grabbed Indian PC market, which ultimately led to the rapid
downfall of PC prices thus enabling almost all the middle class people to afford
computers.
12
c. Socio-cultural Factors
i.
Changing Lifestyles
As we know that human wants are unlimited so, in this changing scenario,
computers have become the essential part of the lifestyle of the contemporary
world and in these too, anywhere and anytime computing has brought a sea
change in the trends of carrying a notebook instead of antiquated desktops.
ii.
Career Expectations
With the introduction of PC industry, a revolutionary change is being
experienced in every field of our life, be it education, transportation, business,
or even small shopkeepers like groceries, stationeries, chemists, etc.
iii.
Consumer Activism
Several laws like RTI (Right To Information Act 05), Consumer Protection Act,
etc. and majorly the internet accessibility to every door has made the consumers
aware of the ifs & buts in all kinds of transactions.
iv.
d. Technological Factors
i.
ii.
Cutting-edge Technologies
Indian PC industry has introduced various innovative features like Green
Computing, Noise control Technology, Aesthetic features, Face recognition
technology for convenient login, and many more which has positioned it in the
global market.
13
iii.
iv.
Patent Protection
After the Copyright Act 1957 was implemented, Intellectual Property Right
regime has covered the innovative world with patent protection.
14
BACKGROUND
YEARS
EVENTS
IBM PCD introduces its first personal computer, the IBM PC.
1981
1984
IBM PCD introduces its first portable computer, the IBM Portable PC, weighing 30
pounds. With an initial capital outlay of only RMB200,000, (US$25,000) Lenovos
founding chairman Liu Chuanzhi, together with 10 like-minded colleagues, launches the
New Technology Developer Inc. (the predecessor of the Legend Group) funded by the
Chinese Academy of Sciences.
1986
IBM PCD announces its first laptop computer, the PC Convertible, weighing 12 pounds.
1987
IBM PCD announces the Personal System/2 personal computer. Legend successfully rolls
out the Legend Chinese-character card.
1988
1989
1990
The very first Legend PC is launched in the market. Legend changes its role from that of
an agent for imported computer products into a producer and seller of its own branded
computer products. Legend PCs are ratified and accepted by the China Torch Program.
1992
IBM PCD introduces ThinkPad, the industrys first notebook with a 10.4 inch color Thin
Film Transistor (TFT) display and a Track Point (red ball) pointing device.
Legend pioneers the home PC concept and Legend 1 + 1 home PCs enter the Chinese
marketplace.
1993
Legend enters the Pentium era, producing Chinas first "586" PC. Legend establishes 1+1
retail network.
1994
IBM PCD introduces the industrys first notebook with integrated CD-ROM, the
ThinkPad 755CD. Legend is listed on the Hong Kong Stock Exchange. The Legend PC
business division is formally established.
1995
IBM PCD introduces the butterfly keyboard. IBM PCD moves from Boca Raton,
Florida, to Raleigh, North Carolina. Legend introduces the first Legend-brand server.
1996
Legend becomes the market share leader in China for the first time. Legend
introduces the first Legend brand laptop.
15
1997
IBM PCD introduces the industrys first notebook equipped with a DVD-ROM, the
ThinkPad 770. Legend signs an Intellectual Property agreement with Microsoft, the most
valuable deal ever made in China at the time. Legend launches the first multi-function
laser printer.
1998
IBM PCD introduces the industrys first Think Light, a small light that illuminates the
keyboard in low light work environments, such as onboard an airplane. The millionth
Legend PC comes off the production line. Intel Chairman Andy Grove attends the
ceremony and takes the PC for Intels museum collection. Legend establishes the first
Legend Shop.
1999
IBM PCD introduces the industrys first mini-notebook, weighing, under three pounds,
with standard ports and a keyboard that is 95 percent of full-size. IBM PCD announces its
exit from the retail business. IBM PCD introduces the industrys first PC with an embedded
security chip.
Legend becomes the top PC vendor in the Asia-Pacific region and heads the Chinese
national Top 100 Electronic Enterprises ranking. Legend launches pioneering Internet PC,
with its "one-touch-to-the-net" feature, which enables millions of Chinese PC users to
easily access the Internet.
2000
IBM PCD ships its 10-millionth ThinkPad notebook PC. Legend becomes a constituent
stock of the Hang Seng Index - HK. Legend ranked in top 10 of world's best managed
PC venders.
2001
An IBM notebook with an embedded security chip becomes the industrys first notebook to
be certified by the trusted Computing Platform Alliance, an industry body setting data
security standards.
Legend successfully spins off Digital China Co. Ltd., which is separately listed on the Hong
Kong Stock Exchange. Legend appoints Yuanqing Yang President and CEO. Legend
first introduces "digital home" concept and launches accessories-enabling PC.
2002
IBM PCD introduces Image Ultra and Rapid Restore, the first automatic data recovery
technologies of their kind. IBM PCD announces desktop PC outsourcing pact with
Sanmina-SCI.
Legend launches its first technological innovation convention, Legend World 2002,
which opens up Legends Technology Era. Legend introduces its visionary concept for
the future of technological development and applications, its Collaborating Applications
project, as well as its strategies for implementing Collaborating Applications. Legends
supercomputer, the Deep Comp 1800 makes its debut. It is Chinas first computer with
1,000 GFLOP (floating point operations per second) and Chinas fastest computer for
civilian use, ranked 43rd in the Top 500 list of the worlds fastest computers.
2003
IBM PCD introduces the industrys first notebook with an extended battery life of up to 11
hours. IBM PCD introduces its Think Centre desktop PC line. IBM PCD introduces its
Active Protection System, the industrys first notebook with an airbag for hard Drive and
data protection in case the system is dropped. IBM PCD ships its 20-millionth ThinkPad
notebook PC. IBM PCD introduces its Think Centre desktop PC line.
Legend announces the birth of its new "Lenovo" logo to prepare for its expansion into the
overseas market. Based on the collaborative application technology, Lenovo initiates IGRS
Working Group, in cooperation with a few large companies and the Chinese Ministry of the
Information Industry, to promote the formation of the industrial standard. Lenovo launches
a Tech Road Show 2003 nationwide to promote Lenovo's innovation. Lenovo successfully
develops Deep Comp 6800 in November 2003. It ranks 14th on the global list.
16
2004
IBM PCD introduces the Think Centre ultra small desktop PC, no larger than a box of corn
flakes. IBM PCD introduces the first notebook with an integrated fingerprint reader.
IBM PCD ships its 100-millionth PC (counting both desktop and notebook computers).
Lenovo becomes an Olympic worldwide partner. It is the first Chinese company to become
a computer technology equipment partner of the IOC. Lenovo decides to develop the rural
market by launching the "Yuanmeng" PC series designed for township home users.
Lenovo and IBM announce an agreement by which Lenovo will acquire IBMs Personal
Computing division, its global PC (desktop and notebook computer) business. The
acquisition forms a top-tier (third-largest) global PC leader.
2005
Lenovo completes the acquisition of IBM's Personal Computing Division, making it a new
international IT competitor and the third-largest personal computer company in the
world. Lenovo announces the closing of a US$350 million strategic investment by three
leading private equity firms: Texas Pacific Group, General Atlantic LLC and Newbridge
Capital LLC. Lenovo introduces the industry's thinnest, lightest and most secure Tablet PC,
the ThinkPad X41 Tablet. Lenovo introduces the first widescreen ThinkPad with embedded
wireless WAN, the ThinkPad Z60, available for the first time with a titanium cover.
2006
Lenovo becomes the world's largest provider of biometric-enabled PCs by selling its onemillionth PC with an integrated fingerprint reader. Lenovo technology flawlessly supports
the 2006 Olympic Winter Games in Torino, Italy, supplying 5,000 desktop PCs, 350 servers
and 1,000 notebook computers. Lenovo also hosts seven Internet lounges for use by
Olympic athletes and visitors.
2007
2008
Lenovo introduces the first dual-core ThinkPad notebook PCs, improving productivity
and extending battery life for up to 11 hours.
2009
VISION OF LENOVO
At Lenovo, their vision is to be a company respected for the remarkable contributions
they will make to society through the advancement of technology, business practices
and their role in protecting the environment and respected by their people for the
career and financial opportunities they will find, as well as the personal satisfaction for
helping bring about these remarkable achievements.
This vision guides how they think, how they work, and how they interact with their
customers, suppliers and colleagues.
17
MISSION OF LENOVO
To become the new leader in the world of computers
LENOVO = LE + NOVO
LE means Leader, NOVO means new.
So, LENOVO is the new leader.
CULTURE @ LENOVO
Their culture defines them its their DNA. Its the values they share and the
business practices they deploy. Their culture is what has enabled them to consistently
raise the bar on delivering break-through innovations and award-winning designs.
They are dedicated to the satisfaction and success of every customer. They pursue
innovation and deliver the products and services that matter to their customers with
speed and efficiency. They strive for trust, honesty and personal responsibility in all
relationships. And they seek to work collaboratively, respect and value our differences,
and enjoy the opportunity to work across cultures.
OBJECTIVES OF LENOVO
o To provide the computing solutions with an ease at affordable price.
o To work as a catalyst to bring about institutional improvement in streaming the functions
of PC business.
o To mobilize various types of resources viz. domestic and international.
o To strive for up gradation of skill in PC sector for efficient and effective growth of the
company.
o To maximize the rate of return through efficient operations and introduction of
innovative environment friendly Desktops and Laptops and services in PC sector.
18
Lenovo is dedicated to building the world's most innovative personal computers. Their
business model is built on innovation, operational efficiency and customer satisfaction,
with a focus on investment in emerging markets. With major research centers in Yamato,
Japan; Beijing, Shanghai and Shenzhen, China, and Raleigh, North Carolina, Lenovo is a
global company with a local presence. They are creating a culture where people achieve
their highest potential and deliver extraordinary results. No matter how large they grow,
they will pursue innovative, creative people; relationships that are respectful; leaders who
inspire, and meaningful work.
Lenovo: - New world, new thinking.
High Design Quality Award for 1800 adjustable display from prestigious German
Design Institute on Nov. 30, 2005.
19
Lenovo XP 7 STYLE 2010 SATA is the most beautiful and modern Windows XP
like exactly Windows 7, it based on original copy of XP SP3 (Activated) include
Windows Media Player 11, Internet Explorer 8 and SATA Drivers.
The system has been modified in a professional manner combined the high
performance and the wonderful appearance more beautiful from Window 7; you will
feel that you already work in Windows 7. Lenovo XP 7 STYLE 2010 has more power
because it has been updated completely with the latest updates and security hot fixes
till November 2009 addition to the last version of DirectX. This makes it become very
stable, fast and safe when the normal work or browsing of the internet will be faster
and safe from hacker attacks, viruses, etc. When playing, the games will be speedy,
stable and with high graphics. The system has full components; everything is staying
(Services, Drivers, Languages ... etc.). Lenovo XP 7 STYLE 2010 SATA is fully
compatible to work with any PC- Laptop or Desktop.
Windows Lenovo XP 7 STYLE 2010 (with SATA Support) [RE PACKED] | 651 MB
20
RECOGNITIONS: EPEAT Gold Standards for Think Pads (Responsible for environment-friendly
product).
NYSE (New York Stock Exchange) enlisted company.
Fortune-500 enlisted company.
Green-guard certified (Air Quality Certification).
Many Think station models are Energy Star 5.0 certified.
EPEAT Silver Rated for Think Centre Models.
NVIDIA Quadro FX MXM Certification for graphic solution.
WUXGA certification for better resolution.
21
22
23
24
25
CLIENTS OF LENOVO:-
26
Video recording.
Telephone.
Conferencing machine.
Camera.
Sound Systems.
Suppliers
Intel (Micro-processor)
Microsoft (OS)
Buyers
Big Corporates
Government Offices
Educational Institutes
BPOs
Individual Customers
Competitive Rivalries
HCL
HP
Compaq
Dell
Acer
Toshiba
Zenith
Sahara
LG
27
5.
6.
7.
8.
9.
Opportunities
1.
2.
3.
4.
5.
6.
7.
4.
5.
6.
7.
Weaknesses
1.
2.
3.
4.
1.
1.
2.
W-T Strategies
S-T Strategies
1.
2.
W-O Strategies
S-O Strategies
Threats
1.
2.
3.
1.
Conduct aggressive
European ad campaign to
promote Dell Direct Selling
(W2, T3, T2)
28
SWOT ANALYSIS
In order to get a better sense for Lenovos outlook in terms of the corporate market
and the impending loss of the IBM branding, it is helpful to analyze the companys
strengths, weaknesses, opportunities and threats in terms of the problem. These key
parameters are summarized here.
Strengths
Lenovos major strengths lie in its current brand image and market share.
On the international scale, Lenovo ranks third in corporate sales behind
Hewlett-Packard and Dell.
It shows tremendous capability for improvement, however, due to its clearly
superior reputation for high quality, high end products inherited from IBM.
In addition, executives maintained from IBMs notebook division provide the
valuable experience that a relatively new foreign player normally would not
have in the corporate (especially US) market.
Lenovo already has a strong base in China, with a 29% share of Chinas
PC market. There is limited competition for existing IBM/Lenovo
corporate customers, because of existing reputation and connections
formed by transferred IBM staff.
The historic brand image and continuing innovation in the high-end market
makes products like the ThinkPad X300 a must-have for a CEO to show off
and use. The strength here lies in the capability for creativity in producing a
high-end product with all the bells and whistles necessary for a corporate
executive.
Lenovo provides a highly versatile notebook product line, in addition to its
high-end ThinkPad. As a one-stop shop company, Lenovo shows promise
its product lines covers mid to high end products, now supporting Linux
products. In addition, in-house manufacturing specialization allows for lower
marginal costs this leads to a more competitive position for a price war.
29
Weaknesses
Since Lenovo is a new player in the international stage it has plenty of
weaknesses in its outlook.
In general, its team has less market knowledge than local experienced players
in the US market like HP and Dell.
Lenovo has just begun to develop its service team in the US it still manages to
provide top of the line customer service, but the system is not optimized.
Lenovos major weakness, however, is in the stigma associated with
Chinese products and companies with a reputation for skimping on quality
to achieve low costs.
A customer in the states is likely to mistrust the Lenovo brand in favor of the
more well known and trustworthy, American IBM logo. It is this weakness that
Lenovo must overcome in the next year as the IBM branding has disappeared
from its products.
Opportunities
With low marginal costs and a wide product spectrum, Lenovo has the
opportunity to become an on stop powerhouse in the corporate market,
providing high-end executive computers with the IBM ThinkPad line, and highquality, middle-spectrum computers for lower level employees on the corporate
ladder.
In addition, a developed electronics department allows Lenovo the opportunity
for creating synergies between corporate add-ons like cell phones and Pocket
PCs.
Threats
In general, the weakness of the US economy and the dropping value of the
dollar might pose a threat to Lenovos growth.
Rivalry between Lenovo and other companies in the corporate market like HP
and Dell already pose a significant challenge, but Apple is showing a growing
strength in the corporate market that must be addressed as Lenovo seeks to
become the dominant international corporate player.
30
STRATEGIC ANALYSIS:
a) COMPETITORS STRATEGIES:Dell Inc.
In 2007, Dell had a $60 billion global business with a customer base and an installed
base of more than 200 million units. Dells major strengths lie in its direct order
business model and in its current power in the market; with close to $10 billion in
cash and about $1 billion a quarter in cash flow Dell is a world-renowned brand and is
currently the number one choice of enterprises around the world. These features are
ideal for marketing low and middle spectrum computers to companies, a strategy that
has resulted in Dells success.
Dells weaknesses, however, also lie in this direct order business model. Customers
have no physical sense for the product theyre buying, resulting in dissatisfaction with
the often clunky, utilitarian look of new Dell products. It is this aspect that makes
Dell attempt at high-end computers susceptible to the ThinkPad brand Dells
computers lack both the reputation and quality (number of features and reliability) that
IBMs ThinkPad came to epitomize.
In recent years, Dell has attempted to capture the minds of IT professionals at
corporations by providing services for data management, even though it seems to
have been slow to react to demand.
Hewlett-Packard Co.
HPs major strengths in the notebook market lie in its overall size and power as a
company. Its dominance in the printer market and general knowledge of marketing
and sales in the IT market should give it an advantage in developing complements,
brand images. Compared to other companies, however, HP has been noted as weak in
marketing, distribution speed, and costs. HP attempts to provide the latest technology
available by keeping inventory low and making large orders as they come as a
result, their costs are higher on average than their competitors for production of
similar quality products.
HPs strategies in recent years have included the acquisition of struggling
computer giant Compaq, making HP the largest consumer hardware company in
the world. They have attempted to maintain and expand their market power by
expanding into new markets (especially newly growing Asian markets) lobbying and
working with other multinational corporations, NGOs, and governments to enhance
their competitiveness both in the US and abroad, claiming in one of their pressreleases to be supporting free market economies.
31
32
At the same time, however, Lenovo needs to continue to focus on providing the most
features in their high-end machines, ensuring that they maintain the reputation that the
high-end ThinkPad series has built. An executive purchasing a computer is less likely
to worry about a hundred dollar difference in prices than about the number of features
a computer provides. Apples response to Lenovos top-end products seems to have
been to provide a lower cost product on purpose (undercutting) but only by skimping
on quality. The Mac book Air, for instance, is intentionally priced at $100 less than
the similarly lightweight, but more feature-intensive ThinkPad X300.
Since Lenovo target is the corporate, rather than individual consumers this should be
to our benefit. A worst case scenario in response to this suggested attack of the midspectrum market results in a price war for this market.
This is difficult to avoid by minimizing marginal costs, Lenovo can hope to win
the price war and hurt its competitors in the process. Lenovos in-house
manufacturing expertise will serve to give them the upper hand against a company
like Dell in providing to the less-than-high-end corporate need. It is this advantage in
marginal costs and the existence of Lenovos lower end 3000 line computers that
makes this attack a wise choice. Complements to Compete with Apple and HP.
HP and Apple have begun to demonstrate success in the marketing of complements in
server interfacing technology and efficiency equipment, respectively, in the corporate
market. It is likely, however, that if Lenovo were to partner with IBM to produce a
complement with IBM server technology, both companies would stand to gain:
while it is not in IBMs interest to make their servers solely compatible with Lenovo
products, cooperation to optimize interfacing makes both products more desirable for
customers.
HP demonstrated that the software interfacing they introduced for their server systems
increased productivity and popularity of their product in the corporate market. This
same model, if applied to IBM-Lenovo cooperation, might result in both continued
positive brand identification for Lenovo, and an increase in popularity for both
products IBM already has a significant brand name for its server technology, on
which Lenovo would likely be riding. While it is a much vaguer suggestion, Lenovo
should also attempt to use their significant base as an electronics manufacturer and
retailer to develop complements to their products that appeal to executives, modeling
efforts after the ease with which Apples i-Phone interfaces with Apple computers.
In both these instances, we must hope that Lenovos complement is more attractive or
cheaper to executives than competing products otherwise, such attempts are likely to
fail to a similar extent that HP and Dell attempts at products like PDAs have failed.
33
Marketing
There are two main focuses for marketing to the corporate market, both seeking to
address the major concerns of corporations in computer purchases: functionality and
need for service. These are addressed through the relationship model and transaction
model for marketing. The relationship model involves retaining customers with
continuous innovative products and satisfying customer service by maintaining a
solid customer base and providing them with consistent quality and support, Lenovo
will build a reputation that will earn it more customers. IBM consistently did this in the
past, so Lenovos first concern is maintaining the same standard of quality,
innovation and service that IBM provided.
The transaction model involves making new business deals by spreading to new
potential markets. In this sense, Lenovo uses China as its base for expansion,
capitalizing on the low cost of manufacturing as well as the fast-growing market which
allows the company to create enough revenue to support development in markets
around the world. While companies such as Dell and Hewlett-Packard are trying to
penetrate the Chinese market, Lenovo is trying to break into the international market
out of an established base in the wide Chinese market.
Management
Lenovos major move to provide proper organized and experienced, involved hiring a
large number of IBMs former notebook executives in order to transfer the culture and
structure of IBM in their company. Chairman Liu Chuanzhi is known for having a
thorough approach to decision making. His management team studies other leading
firms and reads foreign management journals. There is a strong commitment to
learning and copying successful techniques within the company that should lead to a
versatile company in future climates.
IBM Branding
Lenovo has made full use of the IBM name, barely associating itself with the IBM
product until very recently. This may have set them up for failure once their rights to
the IBM title expire at the end of this year and they lose their brand recognition, but
while it was used, the IBM name helped Lenovo maintain its solid base with customers
in the corporate market. Recently, Lenovo has emphasized the brands ThinkPad
and Idea Pad, establishing these as the definition in high-end products, separating
them from the IBM name as much as possible. Once Lenovo can no longer brand their
product with the IBM name, they may depend instead on recognition of the ThinkPad
and Idea Pad.
34
Customer Awareness
Lenovo makes an effort to make sure that the Lenovo brand is well known and trusted
as it continues to grow and produce computers in the international market on their own
name. Co-branding, where two companies work together to create marketing synergy,
can be used to great effect here Lenovos sponsorship of the Winter Olympics in
Turin and the Summer Olympics in Beijing have served to continue to establish the
Lenovo name as one that is trusted in general, just as the IBM name was.
Interest Rate 5%
Shares Outstanding 2,600
Common Stock Financing
High
Low
EBIT ($1,789 in 2001)
Interest (5%)
EBT
Taxes 28%
EAT
Shares Outstanding
EPS
$3000
0
3000
840
2160
2643
.817
LENOVO
Computers
$2000
0
2000
560
1440
2643
.545
Industry
Debt Financing
High
Low
$3000
50
2950
826
2124
2600
.816
$2000
50
1950
546
1404
2600
.540
Sector
S and P
500
Valuation Ratios
P/E Ratio (TTM)
P/E High - Last 5
Yrs
P/E Low - Last 5
Yrs
Beta
49.65
29.93
37.84
25.25
105.71
44.40
66.10
49.79
21.29
17.78
19.59
17.38
2.04
1.60
1.76
1.00
35
1.95
1.40
4.05
2.67
13.08
6.12
3.92
4.19
13.07
6.36
4.98
6.59
41.59
18.93
25.27
17.38
49.65
29.93
37.84
25.25
105.71
44.40
66.10
49.79
0.00
1.30
1.03
2.28
0.00
0.42
0.24
1.36
NM
6.77
6.24
7.92
0.00
18.90
9.42
29.67
-8.97
-6.99
-2.04
0.81
-12.17
-10.05
-4.63
1.66
3.32
10.78
20.73
11.89
577.78
-50.05
-2.90
10.50
-60.15
-39.87
-23.06
0.51
-23.41
8.18
9.94
8.46
-7.05
-0.70
13.35
9.96
Dividends
Dividend Yield
Dividend Yield - 5
Yr Avg
Dividend 5 Yr
Growth Rate
Payout Ratio (TTM)
Growth Rates %
Sales (MRQ) vs Qtr
1 Yr Ago
Sales (TTM) vs
TTM 1 Yr Ago
Sales - 5 Yr Growth
Rate
EPS (MRQ) vs Qtr 1
Yr Ago
EPS (TTM) vs TTM
1 Yr Ago
EPS - 5 Yr Growth
Rate
Capital Spending - 5
Yr Growth Rate
36
Financial Strength
Quick Ratio (MRQ)
Current Ratio
(MRQ)
LT Debt to Equity
(MRQ)
Total Debt to Equity
(MRQ)
Interest Coverage
(TTM)
Profitability Ratios
%
Gross Margin
(TTM)
Gross Margin - 5 Yr
Avg.
EBITD Margin
(TTM)
EBITD - 5 Yr Avg
Operating Margin
(TTM)
Operating Margin 5 Yr Avg
Pre-Tax Margin
(TTM)
Pre-Tax Margin - 5
Yr Avg
Net Profit Margin
(TTM)
Net Profit Margin 5 Yr Avg
Effective Tax Rate
(TTM)
Effective Tax Rate 5 Yr Avg
0.85
1.03
2.37
1.12
1.06
1.39
2.91
1.65
0.12
0.45
0.26
0.68
0.12
0.64
0.35
1.04
NM
36.19
11.26
9.36
17.47
30.01
48.52
46.90
20.62
31.72
51.88
48.17
6.46
9.65
15.28
20.02
9.64
13.11
21.95
21.84
5.74
6.05
9.65
17.19
8.99
9.13
16.02
18.11
5.52
7.29
10.89
14.62
9.56
10.18
19.06
17.04
3.98
4.28
5.54
9.62
6.65
7.01
11.76
11.20
27.97
28.17
30.95
33.25
30.20
29.81
34.06
35.69
37
RESEARCH LAYOUT
Information
Need
Behavioral
Model
Information
Source
Data
Collection
Questionnaire Design
Other
Requirements
Evaluation
Completion
Correction
Designing
Analysis
Project Flow Diagram
38
RESEARCH DESIGN
The research design is the master plan specifying the methods and procedures for
collecting and analyzing the needed information.
39
Secondary data AnalysisSecondary data are those that have been collected for some other purpose, as from our
library, internet, journals and magazines etc. Secondary data includes both internal
and external data.
Internal secondary data consists of such information as data generated in-house as
well as analysis of customer files, such as past customer transactions, letters from
customers, sells call reports. In research we have collected internal data from
LENOVO INDIA PVT. LTD. GURGAON and Several service centers of LENOVO.
External secondary data consists of any data collected by an outside organization.
An excellent way to access selected parts of these data is through websites,
magazines, and blogs. We collected these kinds of data from www.acnielson.com,
www.lenovo.com, www.wikipedia.com, Forbes, Harvard Business Review, etc.
Primary data AnalysisPrimary data refers to information gathered by the researcher specifically for the
research project at hand.
In primary data analysis, we use three techniquesQuantitative research DesignsA quantitative research study consists of a research design, the data collection
methods and instruments to be used, and the sample design.
Four basic designs are used in quantitative research, viz.
Observation methods,
Mechanical methods,
Experimentation methods, and
Surveys Methods.
In research project we have used Surveys Methods. Survey methods means a
researcher wishes to ask consumers about their purchase preferences and consumption
experiences. The researcher takes personal interviews, telephone surveys, online
surveys and mail surveys.
40
In research we have used these surveys Personal interview surveys- Colleges, Malls, Retail shops, corporate, students, etc.
Telephone surveys
Online surveys conducted by sending questionnaire to different respondents.
Quantitative data collection instruments include Questionnaires,
Personal interviews and
E-mails.
We have used prominently questionnaire instrument in quantitative methods.
Qualitative research Designs
The key data collection techniques for qualitative data collection methods are
Depth interviews,
Focus groups discussion guides,
Projective techniques and
Metaphor analysis.
In this research, we have used the following methods Structured interview (direct to customer), and
Customers personal opinions about notebooks/desktops.
Customer satisfaction measurement
Customer satisfaction surveys measure how satisfied the customers are with relevant
attributes of the product or service and the relative importance of these attributes.
In our survey, we have used the following customer satisfaction methods through
questionnaire How much customers are satisfied with quality of Lenovos products?
What change is required in the Notebooks and Desktops?
What are the preferable choices of customers?
41
SOURCES OF INFORMATION
In order to receive the required information, we extracted the data from the following
sources1.
2.
3.
4.
B- Schools in Delhi-NCR,
BPOs at Gurgaon,
Malls in Delhi NCR, and
From students.
42
To know the exact and relevant data we conducted our research at various places, few
of them are enlisted below1. Reckitt Benckiser,
2. Agilis International,
3. Saubhagya Media Pvt. Ltd.,
4. ITS, Ghaziabad,
5. NDIM, Tughlakhabad, New Delhi,
6. Centner Institute of Management and Communication, Noida,
7. Jamiya Miliya Islamiya Univesity, New Delhi,
8. Sparsh India Ltd. Udyog Vihar III, Gurgaon,
9. Genpact, Gurgaon,
10.Ansal Plaza, Greater Noida,
11.GIP, Sector 18, Noida,
12.TDI Mall, Rajouri Garden, New Delhi, etc.
Educational Institutions
Individual users
BPOs
Malls
= 30 samples
= 30 samples
= 30 samples
= 10 samples
43
RESEARCH METHODS
Field work
We visited across the Delhi NCR in various colleges, malls, corporate etc. It was a
very great experience to visit all those places. At some of those places, we were
warmly welcomed, but at some other places we were treated very rudely.
Probing
Probing the respondents was a great experience, though we met 100s of respondents
but to meet and to probe the Lab-in-charge of ITS, Greater Noida was really a very
good experience as she was responding very gently.
RESEARCH INSTRUMENT
QUESTIONNAIRE
Dear Sir/Maam,
We the management trainee at LENOVO INDIA PVT LTD. are conducting a survey
to understand the current market trends in the field of Personal Computing as a part of
our Business Research. The purpose of this activity is to know your desire better in
order to serve you better.
Kindly extent your cooperation by filling up this questionnaire and enable us to
conduct the research successfully.
44
Guidelines
Question no. 1 is compulsory.
Questionnaire has been divided into two sections (Section-A and Section-B).
Section- A (Question no. 2 to 21) is for Notebook users.
Section -B (Question no. 22 to 34) is for Desktop users.
All questions are of multiple choices, in nature.
Note
Any information provided by you is assured to be kept fully confidential.
1.
You own
Notebook
Desktop
Both
None
45
How many Notebooks you possess? (approx.) [ Only for Enterprise Customers]
<50.
51-150.
151-250.
251-350.
> 350.
Since how many years have you been using your particular brand?
<5 years.
5 10 years.
> 10 years.
How much distance (both ways) you use to cover with your Notebook in a day?
<20 KMS.
20-40 KMS.
40-60 KMS.
60-80 KMS.
>80 KMS.
46
10
11
What are the features that you feel of no use for you in your Notebook?
I. ________________________________
II. ________________________________
III. ________________________________
47
12
Do you face any kind of health related problem(s) with your Notebook?
Yes.
No.
If yes, which problem affects you the most?
Vision problem.
Stress.
Backache.
Any other, please specify___________________________________
13
14
15
What is the average time period of service assistance you require for your Notebook?
<6 months.
6-12 months.
1-2 years.
>2 years.
16
How much are you satisfied by the services provided at our service centers?
Satisfied
____
____
____
____
____
Unsatisfied.
48
17
18
One key rescue system for easy data recovery and back up.
Face recognition technology for convenient login.
Connectivity switch.
Fingerprint Reader.
Active Protection System.
Chassis Intrusion Switch.
PC Tracker.
Trusted Platform Module (Data Encryption).
Disable/enable capability of USB Ports.
Pre-boot Authentication.
Any other, please specify_____________________________.
Low
7
19
49
20
21
Which feature(s) attracts you the most among the following: Ultra-thin (19mm X 337mm X 241mm).
Ultra-light weight (2-2.5 pounds).
1800 Flexibility.
Choice of Color.
Any other, please specify_____________________________________
50
22
23
24
How many Desktops you possess? (Approx) [Only for Enterprise Customers]
<50.
51-150.
151-250.
251-350.
> 350.
25
Since how many years have you been using your particular brand?
<5 years.
5 10 years.
> 10 years.
26
27
28
29
What is the average time period of service assistance you require for your desktop?
Less than 6 months.
6-12 months.
1-2 years.
More than 2 years.
30
What specific facility in your desktop compels you to preferably work on it?
Wide screen.
Ease with typing.
Separate mouse.
Expandable hard disk.
Expandable RAM.
Multi-processor capability.
Fast processing speed.
Any other, please specify________________________________
31
52
32
33
34
53
Organizations Name
_____________________________________
_____________________________________
Designation
Address
_____________________________________
Contact Details
Ph
M
Fax
_____________________________________
Respondents Signature
54
OBSERVATION
E- Mail
In order to get the responses, we used to make email communications to some of our
colleagues and friends and thus got the desired responses.
Interview
We made a direct approach to various individuals in malls, IT/admin professionals at
various B- schools and respective concerned persons at several BPOs in the NCR
region.
DATA ANALYSIS
55
56
57
58
59
60
RESPONSES OF QUESTIONNAIRE
What do you own?
Response
None
3%
Notebook
22%
Both
34%
Desktop
41%
Response
OTHERS
17%
LENOVO
19%
HP
12%
COMPAQ
15%
ZENITH
6% ACER
7%
HCL
10%
DELL
14%
61
Response
>350
11%
251-350
15%
151-250
8%
51 - 150
16%
< 50
50%
62
Response
Light -weight
System
10%
Any other
9%
Attractive
aesthetics
8%
Fashionable
Carrying Cases
10%
Ultra-thin mode
10%
Wide-screen
Display
6%
Web-cam
10%
Do you face any kind of health related problem(s) with your Notebook?
Response
Yes
14%
No
86%
63
Response
Any other
13%
Vision problem
33%
Backache
13%
Stress
41%
Response
<3 h
2%
>9 hrs
18%
3-6 hrs
22%
6-9 hrs
58%
64
How much are you satisfied by the services provided at our service
centers?
Response
1
1%
5
6%
2
31%
4
26%
3
36%
Response
Any other
6%
Enjoying on call
facility
10%
By self
24%
AMC (Annual
Maintenance
Contract)
60%
65
Response
Pre-boot
Authentication
5%
Any other
8%
Face recognition
technology for
convenient login
4%
Connectivity switch
10%
Disable/enable
capability of USB
Ports
22%
Fingerprint Reader
2%
Active Protection
System
8%
Chassis Intrusion
Switch
3%
PC Tracker.
4%
Trusted Platform
Module (Data
Encryption)
23%
Response
1 5
1%6%
2
31%
4
26%
3
36%
66
Series 1
m10
m9
m8
m7
m6
Series 1
m5
m4
m3
m2
m1
0
10
15
20
25
Response
Any other
8%
Ultra-thin (19mm
X 337mm X
Choice of Color
241mm)
20%
25%
1800 Flexibility
15%
Ultra-light weight
(2-2.5 pounds)
32%
67
Response
COMPAQ OTHERS
9%
4%
LENOVO
8%
ACER
12%
samsung
10%
HCL
43%
LG
14%
68
Response
Enjoying on call
facility
0%
Any other
0%
AMC (Annual
Maintenance
Contract)
100%
By self
0%
Response
Wide screen
16%
Any other
19%
Fast processing
speed
14%
Separate mouse
7%
Multi-processor
capability
14%
Expandable
RAM
8%
Expandable
hard disk
8%
69
Response
4
0%
1
12% 5
0%
3
20%
2
68%
Series 1
dm6
dm5
dm4
Series 1
dm3
dm2
dm1
0
10
15
20
25
70
CONCLUSION
With the help of this project, we reached at the result that for certain features
notebooks are feasible against desktops, while for others, the vice versa. As far as
individual buyers and B-schools are concerned, notebooks are the first choice; but
when it comes to offices, corporate, malls, etc.; desktops are preferred first.
During our survey, we found that the market penetration of LENOVO is quit low as
compared to its competitors like HCL and HP.
71
72
www.lenovo.com
www.wikipedia.com
www.investor.stockpoint.com
73
74