Analysis Of Strategic Gap At Lenovo Company

Strategic Intent and Reality

There is always a difference between visions and reality whether in business or at homes but when talking about vision and reality in businesses, the difference between successful businesses and those that are lagging behind is, successful business generate a strategic gap immediately a vision fails. A strategic gap is a gap between results and performances realized in a company and desired performance expressed in the goals and objectives of the company.

It is important to for an organization to have a strategic gap after formulating the expectations of the company so that in case things do not turn out as expected, the strategic gap will help the firm not to crumble. In this case study, I will be looking at Lenovo Company, a successful online company that has been rising against all odds in the past decade which can only mean that the company has market-oriented strategic plans.

Strategic intent

The executive chairperson and founder of Lenovo Liu Chianzhi had a vision of bringing together people by offering them electronic devices ranging from laptops, mobile phones, tablets, desktops, supercomputers, printers, and televisions. He intended for his products to be of high technical superiority with maximum service content as well as offer customers suppliers who were specialists. (James 2009).

Strategic reality

During the invention of Lenovo products, the world was still lingering through the phase of adopting technology as such inventions were rare things to hear of therefore users of Lenovo products felt that it was difficult to use such electronics and would not use them efficiently. Another strategic reality Lenovo faced was the fact that the electronic specialists hired by the company to invent and make Lenovo products the best in the world did not want to be seen as computer specialists. (Ahrens 2013).

Strategic gap

From Chessnotes (2017), it was necessary for Lenovo Company to address the issue it was facing and the company offering solutions to its customers but not through computers did this. Instead, what was done was that Lenovo came forward to explain to people in China through advertisements that what they were offering in the market was an easier way or carrying out tasks for example with the use of computers to type and print.

Strategic intent

With a strong growth in internet penetration in China, customers all over were looking for quality commodities to buy both in China and worldwide. The founder of Lenovo saw this as an opportunity to offer businesses and customers a platform to get what they want at a higher price and that is exactly what he offered his customers. According to Wikiwealth (no date), Lenovo had the vision to offer its users products of high quality and at a slightly higher price than what other companies were offering their customers. 

Strategic reality

Smaller companies also had realized the trick Lenovo was intending to use thus lowered their prices. This move made it difficult for Lenovo to get customers as they were being swayed towards the other organizations since customers felt that the electronics were too expensive and intractable.

Strategic Gap

Strategic gap

The company saw that it was necessary to lower the price of commodities in order to attract more customers. It was enough that commodities from the company were of good quality and that became their selling point, not high prices. (Pressroom no date).

Communication

Lenovo has been able to provide communication services to its users during exchanges for example blogs, forums, and groups. This was a smart move to ensure there is an open communication channel between the company and sellers.

Strategic intent

According to Emerald Insight (no date), the initial vision for the company towards marketing and selling of its products was through getting the electronics from electronic shops by users and this seemed like a good idea as 30 years ago there was no platform for online marketing.

Strategic reality

During the late 19^th century and the beginning of the 20^th century, Lenovo was lagging behind in terms of sales and marketing as its opponents were venturing into an online platform for selling commodities while Lenovo was still depending on selling through visible markets.

Strategic gap

A new e-commerce search engine was created for Lenovo that enabled it to provide a marketing platform for its users across the world. The search engine provided a wider space for communication making the company bounce back to its original position. The search engine enabled customers to purchase electronics through the internet and get a delivery within 72 hours. (Compubase no date).

Strategic intent

According to Forbes (2009), this was seen as a strategic move to advertise products for Lenovo to cover a larger market and obtain more customers after the advertisement. Advertisements were intended to be done through the internet mostly as that was an era where people were highly depending on the internet for everything. The advertisements were also done to reinforce positioning in the company.

Strategic reality

It became evident that the company was basing its advertisements more on computers and less on the impacts of these electronics on customers and businesses that require it. This, therefore, led to the company to lose even more customers as it was focusing on the wrong target.

Strategic gap

Lenovo realized that it had a marketing problem, therefore, a new strategy was put across to deliver advertisements to the right group of people. According to global perspective (2014), The company was also facing a positioning problem where it was made clear what the company problem was and what it needed to do to solve that problem which in this case it case connecting with the customers.

Strategic intent

Lenovo over the past few years has been known to offering its users promotions in order to gain publicity and more users. The company does this through offering discounts on products on offer, giving vouchers and hampers for loyal users, and reducing its charges all to get more users to use the platform, this is according to BTS (no date).

Strategic reality

Despite the fact that Lenovo tried every trick to get more people to use its site, the number of people who actually turned out to use purchase its products was lower than expected. This was major because the company had less area coverage as its major and only target was China at the moment while its competitors had crossed the borders and gone international.

Operational Policies Criterion

Strategic gap

It was time for the company to expand its territories and during the early 20^th century Lenovo had crossed to more than 10 other nations apart from China and neighboring Asian states.

Strategic intent

Lenovo carries out the distribution of products through direct channels where customers are linked directly to the company, unlike other companies where customers first have to get through retailers and wholesalers. This was seen as a perfect move to protect customers from middle-men.

Strategic reality

The opposite of what the company was expecting happened as customers preferred going to traders and retailers instead of going to the company direct to purchase the products they want.

Strategic gap

This problem was solved when the company came to understand customer’s decision-making units and realized that the company needed to put its own retailers into the market to associate directly to the customers.

Logistics

Strategic intent

The company wanted to offer personal relationships with its customers, for instance, customer service care unit and consultations. It was also necessary for the company to offer installation services to its customers upon purchasing a product to ensure that the relationship between Lenovo and its customers is perfect. (CMO 2017)

Strategic reality

It turned out that customers do not trust company employees, for instance, customer care services and installation services offered by the company. According to Fast Company (2011), a century ago people preferred trusting their own instincts and going for advice or installation services to regular practitioners instead of trusting the company they have purchased from.

Strategic gap

The company realized that what its customers needed most was hardware specialized technicians instead of services the company might offer. This made Lenovo train its own personnel to help customers with services involving the electronics.

Strategic intent

The company envisioned to interact with its customers through social events like the introduction of a new electronic in the company involving the participation of both parties. This was supposed to be a great move to know directly what the customers felt about Lenovo’s products. There have been several events hosted by Lenovo where the public was invited in order to interact for example the launching of Lenovo smartphones. (TI MPK732 2016).

Strategic reality

During such events, the company realized that its competitors hosted better events than what they did and even the turn out numbers was better than that in Lenovo events. It was necessary for the company to develop a strategic gap to deal with the issue as opponent companies were getting most of the customers.

Strategic gap

It was necessary for the company to formulate ways in which they would attract more audience during important functions in the industry and in the process getting to know what its customers felt about new technologies being invented.

Strategic intent

Lenovo intended for its products life cycle and market cycle to vary from between 2 to 5 years before changing the optics. This gap was efficient as it would have enabled the firm to develop new models and know of the changes taking place in the market before investing a product that would fit in the market. 

Strategic reality

What happened is that Lenovo realized that the market for electronics had already matured and did not require such a long time like two years to wait before a new model is invented. This made the company to lose a lot of customers and income. (Chinaabout.net 2015)

Strategic gap

Lenovo resolved to use market assumptions in the future in predicting the trend so that it would be up to date with what customers require. For example, new laptops from Lenovo are released almost every month despite the trend in the market as it had already anticipated the trend and made a product that would be accepted.

Strategic intent

Lenovo wanted to conquer its competitors by producing high-quality products that are easy to use and with a slightly higher price than the original offer in the market. This aspect was meant to attract users who were interested in good quality rather than cheap and ineffective.(TBR 2016)

Strategic reality

Buyers were not interested in purchasing electronics at a higher price as it seemed to be out of their price range and therefore opted to go to other companies with similar products but normal price. It made the company lose customers drastically in a short period of time.

Strategic gap

The company decided to lower the prices of its commodities to regular prices just like in any other company and after some time, its customers came back. (TBR 2018)

Conclusion

It is always necessary to have a backup plan to ensure that if the original plan fails, the backup will sustain and save the day. All companies and industries go through strategic gap period where a decision is supposed to be made since the first one failed. A good strategic gap will save a company from drowning while a company without a strategic gap is set to be doomed.

References

1. Ahrens N. (2013) China’s competitiveness Lenovo case study [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=7&cad=rja&uact=8&ved=2ahUKEwjnqq776vHeAhVEzRoKHSgGD3kQFjAGegQIAxAC&url=https%3A%2F%2Fcsis-prod.s3.amazonaws.com%2Fs3fs-public%2F130129_competitiveness_Lenovo_casestudy_Web_4.pdf&usg=AOvVaw0tpS4avvr8a3WRAf6qziFk[accessed Nov 26 2018]
2. BTS (no date) executing a global growth new strategy [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=5&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjAEegQIAhAC&url=https%3A%2F%2Fwww.bts.com%2Fdocs%2Fcase-studies%2FBTS-Strategy-Execution-Lenovo-Case-Study_1&usg=AOvVaw2tnml1wqpCHoD4DApHH-dg[accessed Nov 26 2018]
3. Compubase (no date) Lenovo channel review [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=4&cad=rja&uact=8&ved=2ahUKEwjbzNL36vHeAhWSxYUKHSwaClIQFjADegQIARAB&url=http%3A%2F%2Fen.compubase.net%2FLenovo-Channel-Review-commented-extract_a258.html&usg=AOvVaw0MHJDm35MPUtEVAkYHFSHd[accessed Nov 26 2018]
4. CMO(2017)how Lenovo social strategy helps bridging market analysis [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjAAegQIChAB&url=https%3A%2F%2Fwww.cmo.com.au%2Farticle%2F621502%2Fhow-lenovo-social-strategy-helping-bridge-marketing-sales-divide%2F&usg=AOvVaw205KbaBxe_k149AjSq_QoV[accessed 26 November 2018]

1. Chessnotes (2017) SWOT analysis of Lenovo 2017 [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=3&cad=rja&uact=8&ved=2ahUKEwjnqq776vHeAhVEzRoKHSgGD3kQFjACegQICBAB&url=https%3A%2F%2Fwww.cheshnotes.com%2Flenovo-swot-analysis%2F&usg=AOvVaw2xcm9C1g9j1u-qHT2JEHlu[accessed Nov 26 2018]

1. NET(2015) Gap analysis in Lenovo [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjABegQIABAB&url=https%3A%2F%2Fwww.chinaabout.net%2Fgap-analysis-of-lenovo%2F&usg=AOvVaw02H0KC9ew9cMWTzzt3VJnu[accessed March 7 2015]

1. Emerald insight (no date) Lenovo’s successful acquisition of IBM PC division [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjAFegQICRAB&url=https%3A%2F%2Fwww.emeraldinsight.com%2Fdoi%2Ffull%2F10.1108%2FSD-06-2016-0090%3FmobileUi%3D0&usg=AOvVaw2aNGZdOIfJHKiB0o1m9AKr[ accessed Nov 26 2018]
2. Forbes (2009) Lenovo reboots leadership [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=9&cad=rja&uact=8&ved=2ahUKEwiMh7nw6vHeAhUyyoUKHWYuCs0QFjAIegQIARAB&url=https%3A%2F%2Fwww.forbes.com%2F2009%2F02%2F05%2Flenovo-amelio-china-markets-equity-0205_ibm_03&usg=AOvVaw0Se8vgRKuSeJ_5SenG67tC[accessed Nov 26 2018]

1. Fast company (2011) Lenovo’s new strategy of protest and attack [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=4&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjADegQIBxAB&url=https%3A%2F%2Fwww.fastcompany.com%2F1793529%2Fprotect-and-attack-lenovos-new-strategy&usg=AOvVaw3Y6pw3yCargApkv6kqM-Ob[accessed Nov 22 2011]

1. Global perspective (2014) Lenovo goes global [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=8&cad=rja&uact=8&ved=2ahUKEwjygMvp6vHeAhUGHxoKHYbrCiUQFjAHegQIARAB&url=https%3A%2F%2Fwww.strategy-business.com%2Farticle%2F00274%3Fgko%3Dabf3e&usg=AOvVaw0GBrQGiPF8DMENuRbdzjW2[ accessed Aug 8 2014]

1. James A.L (2009) building an information technology industry in China [online] available from: https://books.google.co.ke/books?id=OUborjGEGLkC&pg=PA32&lpg=PA32&dq=competitors+lenovo+face&source=bl&ots=zWDuVj1UjX&sig=YIDzmcc66Kkl0mpUOwHMo7xoUKc&hl=en&sa=X&ved=2ahUKEwjnqq776vHeAhVEzRoKHSgGD3kQ6AEwB3oECAEQAQ[accessed Nov 26 2018]
2. Pressroom (no date) Lenovo ranked number one for customer satisfaction [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwiMh7nw6vHeAhUyyoUKHWYuCs0QFjAAegQICRAB&url=https%3A%2F%2Fnews.lenovo.com%2Fpressroom%2Fpress-releases%2Flenovo-ranked-no-1-for-notebook-customer-satisfaction.htm&usg=AOvVaw0XBuhwJja1P6jQYTK60xIO[ accessed Nov 26 2018]

1. TBR (2018) Lenovo outperforms its competitors [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=4&cad=rja&uact=8&ved=2ahUKEwiMh7nw6vHeAhUyyoUKHWYuCs0QFjADegQIBhAB&url=https%3A%2F%2Fen.resources.lenovo.com%2Fanalyst-reports%2Ftbr-lenovo-outperforms-its-competitors-in-x86-based-server-customer-satisfaction-1h18&usg=AOvVaw2qADuFDXf0ffxV3VefpMLX[accessed  Aug 8 2018]

1. TBR (2016) Lenovo leads in customer satisfaction [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwiMh7nw6vHeAhUyyoUKHWYuCs0QFjABegQICBAB&url=http%3A%2F%2Fblog.lenovo.com%2Fen%2Fblog%2Fnumber-one-in-customer-satisfaction-again&usg=AOvVaw2OiPfDnPi1i-ANfBRglpa8[accessed Nov 26 2018]

1. T1 (2016) MPK732 Lenovo distribution channel [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwjbzNL36vHeAhWSxYUKHSwaClIQFjAAegQICBAB&url=https%3A%2F%2Fmpk732t12016clusterb.wordpress.com%2F2016%2F05%2F16%2Fthe-distribution-of-lenovo%2F&usg=AOvVaw0QpQffPJVAxmFIwR4KVuoX[accessed  Nov 26 2018]

1. Wikiwealth (no date) diverse distribution channel [online] available from: https://www.google.com/url?sa=t&rct=j&q=&edata-src=s&source=web&cd=9&cad=rja&uact=8&ved=2ahUKEwjbzNL36vHeAhWSxYUKHSwaClIQFjAIegQIABAB&url=http%3A%2F%2Fwww.wikiwealth.com%2Ffive-forces-supplier%3Alenovo%3Adiverse-distribution-channel-len&usg=AOvVaw0yboIppEl538b-G5CpKcPS[accessed Nov 26 2018)