Lenovo’s Nature of Demand
Abstract In recent years, despite fierce market competition the personal computer manufacturing company Leno has utilized unique competitive strategies to achieve a rapidly increasing share of the computer and notebook market. Leno is faced with unprecedented opportunity and the challenge and in view of the current market situation, Leno is delivering a message that it intends to cover all market segments, from high-end to low-end. Pricing objectives should flow from and fit in with company level and marketing objectives.
Additionally, pricing objectives should be explicitly stated because they have a direct effect on pricing policies as well as methods used to set prices. Leno has established and implemented a successful and complete marketing strategy by utilizing appropriate marketing channels and promotions to target its products to different markets world-wide at a competitive price. Based on different levels of consumers, Leno has developed differentiated products with different prices to cover all market segments effectively.
Lenovo’s Nature of Demand Essay Example
This differentiated pricing and marketing strategy not only helps Leno to build its rake share world-wide but also maximizes its profits. Nature of demand Leno, the world’s second-biggest maker of personal computers, posted a 54 percent increase in third-quarter profit orders for office computers and acquisitions in Germany and Japan boosted sales. Today, Leno strives to be the global market share leader in each of the market segments that the company currently focuses. Leno’s shipments of smartness in China grew four times last quarter.
Revenue in Leno’s mature-markets division which includes operations in the U. S. , Japan and Western Europe, Jumped 81 percent to $3. Billion. Leno is considering acquisitions to accelerate growth and the company expects to grow its business faster than the overall PC industry. After delivering overachieving laptops, Leno has delivered financial results that also exceeded expectations, producing $8 billion in revenue and $141 million net profit. Large percentage of growth came in part from a 59% sales bump in emerging markets like China, India and Brazil, on top of a 9% growth in its home (US) market.
Overall, Leno saw a 24% increase in PC shipments for the third quarter in 2102 world-wide. In addition to PC and laptop market where Leno has enjoyed continued growth, recently Leno has also become the second largest player in China’s semaphore market, after Samsung, now up controls a commandingly% market share. Price Sensitivity In the 21st century, the production capacity of IT enterprises seriously exceeds, and the price war among manufacturers has become worse. As a large and a key player in the IT industry, Leno is impacted by price wars.
However, Leno has demonstrated most vividly and is least impacted by price wars as Leno did not reduce price, while the corporate image enhanced, sales grew and market share expanded, the effective pricing strategy has enabled Leno to exceed in the every market segment that the company currently target TTS. Price sensitive conditions exist in countries such as India, Indonesia and Philippines. These target markets have been very price sensitive and the pricing of Leno’s products are key factors for the company to establish itself in these newly emerging economies.
Unless they offer some serious innovations and an attractive price tag for their phones & tablets, Leno’s future especially in the semaphore domain will be uncertain in these price insensitive countries. One of the ways to go about it could be to position the launch of their smartness in sync with the rivals and clearly sending out signals that the company is at par with other players in the market. Substitutes In recent years, Leno has utilized unique competitive strategies to achieve a rapidly increasing share of the computer and notebook market.
Leno has a fierce market competition from the major IT firms like Dell and Hewlett-Packard. Leno continues to optimize its marketing strategies for competing in a market previously dominated y major players like Dell and Hewlett-Packard which accounted for 54% and 21% of the international corporate market. Leno’s pricing strategy is in accordance with its customer needs and is focused on developing best performance products, at an affordable price to its customers.
Additionally, the company focuses on improved customer service experience which maintains a strong customer relationship. Over the past several years, this unique concept of exceptional customer service program gave Leno its core competitiveness and Leno is still invincible in the fierce competition. Demand and Cost Analysis Leno designs and develops products that have relatively simple functions, relatively low prices based on needs of various markets worldwide.
Leno utilizes new technologies and sophisticated analytics not only to make its supply chains more responsive to customer demand, but also actively to shape demand towards more profitable business. Various demand driven networks enable Leno to provide flexible pricing, sales incentives, promotions and other marketing tools to stimulate demand for its products. This holistic approach requires improved demand based on ales data, integration of new forecasting and demand management tools with existing supply and a collaborative approach to sales and operations planning in order to maximize profitability.
Since its inception, Leno has built its success on product innovation, a highly efficient global supply chain and strong strategic execution to deliver consumer centric innovative products that deliver a blend of mobility, performance and price. Markup Chain within the channel Markup chain is the sequence of markups firms used at different levels in a channel that determines the price structure in the whole channel. Leno uses a standard markup percent and then applies it to all their products which make the pricing easier.
Leno markup it products based on their standard operating expenses, customer price sensitivities and other factors, and still provide a reasonable profit to the company. Recently, Leno has attended I TTS decision ton t local Australian buyers with an almost 60 percent mark up on its latest ultrasound, the Carbon XSL. A Thinking XSL Carbon in Australia, costs a $750 premium for the same device as compared to US counterparts. It costs $1999 in Australia and $1JS1299 in North America and it sells through Leno’s web portal as well as distributors like Keynes, Ingram Micro and Dicker Data.
According to Leno director of products and solutions, the price difference is due to a number of factors including Australian warranty provisions, margins, channel and support. The Leno Carbon XSL is a great looking ultrasound but only time will tell whether Australians would be willing to pay such a huge premium. Price Flexibility Leno offers a wide range of products so there is a great deal of price flexibility with its products. Their portfolio provides flexible options to meet either personal or arable business needs based on market type.
Leno not only uses differentiation strategy by persuading customers that a product is superior to that offered by competitors but also uses a focus strategy that is aimed at a segment of the market for a particular product rather than at the whole market. They offer a worldwide single source solution which helps them lower service costs, as well as provide an improved customer service experience without compromising quality and customer satisfaction. Leno offers differentiated products with a price discrimination based n different levels of consumers.
This diversification of its products has allowed Leno to provide flexible pricing options to its customer base world-wide. Price Adjustments Leno has established a pricing agreement with schools that provides students with the ability to purchase hardware (laptops, desktops) at a significantly reduced cost. If you are a Leno faceable fan you’d be one of the first to know about new products, sweepstakes, and more. Leno also offers limited time monthly e-coupons along with daily, weekly, and monthly hot deals on various websites.
Leno’s Affinity program offers organizations a solution for Employees, Students, and Members to purchase Leno PC products, accessories and options directly from Leno at discounted prices. Additionally, Leno uses promotions in the form of coupons, instant savings, and online rebates to directly influence it customers. Conclusions Leno started from a small factory to now being one of the world’s most influential brands, exporting its products to over 100 countries and regions world-wide. Leno’s strong brand names makes Leno perform well in the market world-wide.