14 October 2008

Lenovo Case Analysis

The overall corporate brand positioning of Lenovo should be similar to that of Hyundai in the automobile industry. Lenovo should portray itself as being the PC company that provides home consumers and small businesses with an up-to-date product that will "get you where you need to go" without having to think about the PC itself due to its worry-free performance package (or 100,000 mile warranty). Lenovo should leverage both its Chinese roots in efficiency and the ThinkPad reputation of quality in building its global brand. Developing global corporate brand is important to Lenovo because of the increasing flatness of competition across the industry. While Lenovo has strong sales and dominance in its home market of China now, competitors such as HP and Dell who already have globalized business structures in place will be moving in to that market as well as all the emerging markets around the world where growth in computing is growing fastest, ie. Middle East, western Asia.

In its PC line of business, Lenovo chose a "one-two punch" strategy with a strong overall master brand, to include a performance line of Think-branded products. The two main product lines are the Lenovo 3000 series and the ThinkPad / ThinkCentre series and are geared toward two different customers' needs. The brand architecture of the 3000 Family is to be the industry-standard consisting of stock models, value prices, contemporary design, and a secure experience. The Think machines are to be industry-leading PCs, with custom models, classic styling, complete business solutions, and the absolutely most reliable and secure enterprise-grade computers on the market. In my opinion, positioning this way is OK, so long as the Lenovo tradition of innovation does not get lost in its family and home-PC line of products. Lenovo has chosen to effectively use the ThinkPad name it acquired from its IBM-PC acquisition as a "hero-brand", attempting to maintain traditional IBM computer customers while at the same time extending the quality perception of the ThinkPad into Lenovo-brand products across the board. I agree with Lenovo's strategy to maximally leverage the ThinkPad trademark. By keeping ThinkPad as a separate, performance line it will not damage the ThinkPad brand equity, and by building the ThinkPad + Lenovo connection through advertising and marketing campaigns the ThinkPad reputation can eventually bleed into the rest of Lenovo. Other approaches to corporate branding could significantly have hurt the ThinkPad brand, such as the suggestion of some Lenovo execs to "take the retail products Lenovo sells in China, label them ThinkPad and take them around the world." This might possibly have created large sales in the first year, but the risk of committed ThinkPad-buyers realizing they had been betrayed by the brand name they loved would have been too great. Wasting away Lenovo's rights to the ThinkPad tradition would've been Lenovo's last mistake.

Lenovo's use of the IBM logo was initially dictated by the acquisition agreement. Lenovo could use the IBM logo on products for up to 5 years, and the logo could appear ON products for the same time period in advertisements, but NOT as a separate logo. Lenovo learned early though, that showing the IBM logo too frequently would detract from the higher goal of building the Lenovo brand. An early Lenovo model released to the market was received well, but most of the credit went to the IBM brand. That was the risk of over-using the IBM brand, not allowing the Lenovo name to build its own momentum. I probably would have thrown the IBM logo on as many products as possible at first as well, given that the IBM reputation spanned 25 years. Lenovo's early decision to focus more on leveraging the ThinkPad name than its IBM precedent was an excellent decision. While the IBM brand gives credibility across a wider spectrum of computing, the ThinkPad name has a specific reputation that Lenovo could really lean on and attach its own corporate brand to.

I do not think that using a product number (ie. "3000") for Lenovo's first line of non-ThinkPad products was the best idea. Numbers are pretty generic, in that the same number may appear on many products across many industries. Choosing a fresh, new name as Sony or Compaq did with the Vaio and Presario would've been my choice for a more memorable experience. Sony as a master brand is a great endorsement for any product, and Lenovo should be seeking the same with its new company. With the ThinkPad reputation lending itself to the Lenovo master brand, using a number would seem to me to quantify the values of "rock-solid performance" and "the ultimate tool" that the Lenovo brand gained via purchase. These values are items I think should not be ranked numerically and should be considered as top-notch or all-or-nothing attributes. If the Lenovo 3000 was the best, how could the Lenovo 4000 be better? To stand out in both the high-performance business market (ThinkPad) and the home computing market, Lenovo should differentiate itself as being "best"--that combination of East and West, innovation and efficiency--across the board. Perhaps the Lenovo Think-brand might be accompanied by Lenovo SmartPC, a name to imply a good family choice, easy on the budget, and a good home companion.


Khan said...

very good

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