Business Strategy

Porter's Five Forces

Bargaining power of Lenovo customers   Medium

The bargaining power of customers in the technology industry is high as there is less differentiation between products in the technology market, we note that laptops produced by companies such as Lenovo, DELL, and Apple have similar features. Nevertheless, Lenovo has managed to maintain its share of the PC market through innovation, competitive pricing, and better offers to its customers.

Bargaining power of Lenovo suppliers: Low

The laptop market is very large and has many suppliers, so Lenovo buys small individual parts from its suppliers. Lenovo deals with a limited number of suppliers, and this ensures that it obtains high-quality resources, on time, and at a low price.

The threat of substitutes from products: Average

The laptop market contains high-quality products from leading companies in this field such as Lenovo, Samsung, Apple, and Dell. Therefore, Lenovo strives to maintain its market position and satisfy customers with its products. Lenovo's position in manufacturing mobile phones is weak compared to other competing companies such as Samsung and Apple.

The threat of new competitors: Low

The laptop market contains very strong and pioneering companies in this field, and their brands have gained great fame among customers, including Lenovo, so entering a new competitor in this market is very difficult and requires huge capital.

Intense competition from opponents: High

There is strong competition between companies in order to produce premium laptops that attract the interest of users. In 2018, Lenovo won the Laptop Mag's Best and Worst Brand ratings for the second time in a row, and Apple, which used to dominate this list, slipped to seventh place in the world rankings. This classification is based on several criteria such as innovation, design, support, product quality, and other items. At the present time, Lenovo's rating has declined, and competitors Dell and HP, which are very famous in the market, occupy the first positions in the rating as the best laptops.

Competitive Strategy

Lenovo's competitive strategy is strategic acquisitions and partnerships. Lenovo occupies a large position in the electronics and laptops market. In 2018, tech website Engadget released a recent ranking, in which it evaluated the top 10 laptop brands, considering support, design, innovation, value, and product quality. According to the classification, Lenovo retained its position for the second year as the best laptop supplier, followed by HP in second place, then Dell in third place, while Apple, which was dominating this competition, fell to seventh place. 53% of the company's laptops scored 4 points or more, however, Lenovo's technical support scores fell from last year, which indicates that competition will flare up with HP and Dell in the coming period.