Apple and Lenovo’s Technology Stratagy Essay Example

excellent marketing and distribution strategy.The text discusses various strengths, weaknesses, opportunities, and threats for both Lenovo and Apple. For Lenovo, it mentions strengths like a merger with IMB Personal Computer and the fast-growing PC market in China and India. It also acknowledges weaknesses such as weak global brand perception and limited knowledge of the global market. Opportunities for Lenovo include signing agreements with USA, specialty shops for distribution. However, there are threats like increased product prices outside of China due to appreciation of RMB and competition from local and international competitors.

Similarly, for Apple, it highlights strengths such as a large segment of loyal customers called "Apple fans," a strong brand image, retail stores providing an immersive experience, and innovative research and development. Weaknesses mentioned are patent infringement issues and product recalls. The text also emphasizes the rapid pace of product generation change for Apple along with opportunities like expanding into emerging markets or entering new industries. However, potential threats include rising popularity of Google Android, market competition in both the PC and smartphone industries, dependence on specific suppliers, uncertainties regarding leadership succession after Steve Jobs.

Overall, the text discusses various opportunities and threats in both Lenovo's industry (PC market) as well as Apple's industry (smartphone and personal computer sector). These opportunities encompass robust growth in these sectors along with collaboration possibilities with Google for innovative advancements. It also highlights Apple's ability to influence customer behavior. Nonetheless, there are threats posed by rising popularity of Google Android platforms as well as general market competition in both industries. Additionally mentioned are dependencies on specific suppliers and uncertainties surrounding leadership succession after Steve Jobs' departure from Apple.
Furthermore, there is

a mention of Apple's industry dynamics with respect to Porter's five forces framework.

The smartphone market is mainly controlled by well-known cellphone manufacturers like Apple, Lenovo, Samsung, HTC, Nokia, and Blackberry. These companies have strong research and development capabilities, a large customer base with loyal customers, and successful marketing and advertising strategies. However, new entrants in this industry encounter significant obstacles and have limited chances of survival.

New companies in the Tablet and PC industries face difficulties entering the market due to the dominance of major players such as Apple, Lenovo, Netflix, Samsung, IBM, Dell, HP, and Sony.

Both Lenovo and Apple are dependent on Foxconn, the same supplier for their manufacturing needs. Despite buying a significant volume of electronics, suppliers hold minimal bargaining power with both companies. Consequently, Apple and Lenovo possess a more advantageous position during negotiations. Moreover, although there exists fierce competition in the smartphone, tablet, and PC industries, these markets are ultimately governed by regulations.

Typically, when a product is released, its price is initially fixed; however, customers still have the ability to negotiate and use their bargaining power. For example, when newer versions of products are introduced, older versions often offer discounts to attract customers. Additionally, there are alternative choices available for smartphones, tablets, and PCs.

The iPod has been the leading digital music player in the United States since October 2004, with a market share of over 90% for hard drive-based players and over 70% for all types of players. Additionally, Apple's iPad has also dominated the market. Since its release on April 3, 2010, Apple has sold more than 15 million first-generation iPads, surpassing the combined sales of all other tablet PCs. By

the end of 2010, it accounted for 75% of tablet PC sales.

On the other hand, Lenovo holds the top position as a computer supplier in Mainland China with an impressive market share of 28.8%. Its annual sales have reached $14 billion.

In the fiscal year ending 2008/2009, Lenovo generated a revenue of 9 billion. By October 2012, they had surpassed HP to become the top global supplier of personal computers. In the third quarter of 2013, Lenovo shipped a total of 13 million units.

Lenovo achieved sales of 77 million units, representing a 15.7% market share globally, whereas HP's sales reached 13.55 million units, accounting for a 15.5% share. It is worth noting that both Lenovo and Apple operate in this market without government regulations due to its fair and self-regulating nature.

Apple's Lock-In Strategy and Switching Costs

Apple employs a lock-in customer strategy, making it challenging for customers to switch away from their products. This is achieved through tools like iTunes, App Store, iCloud, and the OS system. By purchasing music and movies on iTunes, downloading apps from the App Store, and storing data on iCloud, customers become reliant on Apple's ecosystem. When a new iPhone is launched, users can effortlessly transfer everything from their previous device using iCloud and iTunes. Additionally, reminders created on a Mac automatically sync with the user's iPhone and iPad.

Both Apple and Lenovo have implemented strategies to keep their customers loyal to their products. Apple's iCloud strategy aims to lock customers into their ecosystem and make it costly for them to switch to another brand. This is because all of Apple's IT products are interconnected, making

it expensive to switch any single product. In a similar vein, Lenovo has introduced its own strategy called Lenovo Cloud, which allows users to back up and sync data from multiple devices like LePhone, LePad, and LeTV using a 200 GB online storage. The goal of this strategy is to tie Lenovo tablets and devices together, making it inconvenient for customers to switch brands.

In addition to these customer loyalty efforts, Lenovo also focuses on expanding its market outside of China while consolidating its presence in the Chinese market. The company operates with headquarters both in Beijing and the United States.

Lenovo, the leading PC market player in China with a 30% market share, also holds a considerable presence worldwide. Its product sales within China contribute to 46% of its total global sales. Lenovo is determined to expand its global reach and achieve rapid growth in emerging markets while establishing a unique global stature. In pursuit of this strategy, Lenovo relocated some production of its ThinkPad line to Japan in 2012. Furthermore, the company announced intentions to start computer manufacturing operations in Whitsett, North Carolina in October 2012.

Lenovo adopts a marketing strategy known as Middle and High End Market Positioning, which involves creating a range of products at different price points to cater to various consumer groups. This strategy is particularly evident in Lenovo's personal computer market. Surveys indicate that Lenovo focuses primarily on middle and high-end refrigerators, holding a 70% market share in high-end products and a 40-50% market share in middle-end products. The low-end product market share is less than 10%. In terms of distribution channels, Lenovo offers relatively lower prices for mid-level products in

supermarkets, while high-end products are sold through electrical chains and retail sales channels. Additionally, Lenovo designs simpler functioned and lower priced products specifically targeting students in the rural market.

Concerns may arise about Apple's operational strategy following the departure of their visionary leader Steve Jobs, who played a crucial role in the success of the company.

Despite this, Apple's new CEO, Cook, is effectively managing the company. In just 16 months, Cook has successfully launched new iPhones and iPads, leading to an impressive 43% increase in stock price. Like Lenovo, Apple has also given priority to the Chinese market due to its vast population of 1 billion.

China, with a population of over 3 billion people, is currently the world's largest mobile market and Apple's second largest overall. China Unicom, which has 196 million subscribers, exclusively sells Apple's iPhone in the country. In March 2012, Tim Cook, then CEO of Apple, visited Mainland China and supplier Foxconn. This visit was significant as it marked the first time an Apple CEO had been to China as the company expands its investment in this populous market.

Apple's operational strategy revolves around creating technologically advanced products that are innovative, simple, and superior. The company also considers global environmental impact and human rights in its approach. Additionally, Apple provides comprehensive reports on its environmental impact.

Apple is dedicated to reducing its carbon footprint in various areas such as manufacturing, transportation, product use, recycling, and facilities. Their commitment also extends to promoting social responsibility within their global supply chain by ensuring safe working conditions and respectful treatment of workers. Furthermore, Apple collaborates with suppliers like Foxconn in China to encourage environmentally responsible manufacturing processes.

To summarize,

Lenovo and Apple both operate within the same industry offering smartphones, desktops, notebooks, tablets, and future TVs. However, their strategies may differ due to their unique backgrounds.

Lenovo, a Chinese-based company, has achieved global expansion by providing affordable mid-level products. They distribute their high-end products through electrical chain and retail sales channels. Lenovo also has plans to enhance its market presence in Japan and the US.

In comparison, Apple dominates both the US and global markets with a wide range of products. The company is renowned for consistently setting pricing trends in the market.

Lenovo is planning to expand its business in China, the largest market globally. The company anticipates strong competition from Apple in the future market.

Reference

1. http://www.marketwatch.com/story/lenovo-passes-dell-to-become-worlds-no-2-pc-maker-2011-10-13
2. http://www.lenovo.com/lenovo/us/en/our_company.html
3. http://appleinsider.com/articles/08/10/21/apple_iphone_3g_sales_surpass_rims_blackberry.html
4. http://www.apple.com/retail/storelist/
5. 
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• sec. gov/Archives/edgar/data/320193/000119312512444068/d411355d10k. htm
• http://alvinalexander. com/blog/post/mac-os-x/apple-business-philosophy-mission-statement
• http://www. apple. com/environment/
• http://www.

Apple's first-quarter results can be found at http://www.apple.com/pr/library/2009/01/21Apple-Reports-First-Quarter-Results.html. The Economist provides information on tablet computers at http://www.economist.com/blogs/dailychart/2011/03/tablet_computers. Reuters reports on Hong Kong stocks in a pre-opening article at http://www.reuters.com/article/2012/02/09/markets-hongkong-stocks-preopen-idUSL4E8D87B720120209. The fourth link is incomplete and cannot be accessed.

BBC. co. uk news/business-19906119


http://www. gizmochina. com/2012/08/29/lenovo-moves-thinkpad-production-to-japan/


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http://www. workingwider.

com/strategic_innovation/apple-business-strategy-2012/