Strategy of Lenovo in Chinese Market

Question: Use the theory relating to adaptation, aggregation and arbitrage to explain the success of Lenovo/Motorola in India. Answer: Introduction This report is basically for developing the strategies for Lenovo Organization in Chinese market and finding the strategies which Lenovo has adopted for India for getting success. Here, it is discussed about the strategies of AAA that is adopted in India and should also be adopted by Lenovo in Chinese market. Lenovo Organization in India For discussing the reason of success of Lenovo organization in India, we will relate it with the three theories, Adaptation, Aggregation, and Arbitrage. Adaptation Lenovo modifies its products according to the need and requirement of the time. Lenovo provides a wide range of services and facilities in their products. If we discuss about selling of the Lenovo products in initial stage, it started with providing the 16 GB hard disks with only 256 MB RAM which was enough at that time. But according to the requirements of present time, it sells laptops even of 2TB hard disk and up to 16 GB RAM. In the other adaptation theory of Focus, Lenovo mainly focused on the selling of laptops and somewhat on tablets, in India, which resulted in a great success for Lenovo laptops in the Indian market. Lenovos laptops are available in the market at affordable price. It provides quality at less cost according to the needs and requirements of the customers. Lenovo provides outstanding design and a professional look to the user. Lenovo also innovates various features in their laptops (Mathur, 2012). The examples of these are the detachable laptops which can be use d as both Tablets and Laptops. Aggregation Lenovo follows the strategy that it works in both developed and developing market in India. For developed market, the company used to make strategies to stay in the developed market while for developing market, the company tries to establish and promote its product; like Mumbai is the developed market for Lenovo where it maintains the quality of product and innovates new feature to stabilise its performance while Jaipur is a developing market where they try to know the peoples need and requirement and accordingly launches its product in the market. The company also used to develop strategies to stay in this competitive market. Currently, the main competitor of Lenovo is Dell in the Indian market. Lenovo had worked well in Indian market and ranked itself ahead from HP, Samsung etc. in laptop market. For competing in the market, Lenovo produces reliable products with high quality and features at relatively low price (Heinecke, 2011). Arbitrage For providing best quality and services at affordable price, Lenovo used to outsource some products and services from other sources; like, for operating system, Lenovo doesnt prepare its own operating system but it makes a contract with Microsoft or Linux for the operating system, to improve user experience. The other example of outsourcing for Indian market is the contract of ReasonNet. Lenovo ReasonNet provides its best IT services to Lenovo for various purposes but most of the hardware components are manufactured by Lenovo itself for Laptops (Lenovo, 2009). Here there and everywhere campaign of Lenovo is making the best offshoring source to Lenovo (economist, 2013). Strategy for Lenovo in Chinese Market The AAA strategies that should be followed by Lenovo in the Chinese market are as follows: Adaptation Adaptation strategy of Lenovo should include that Lenovo should have its design centre, manufacturing units and marketing centres in China. Lenovo needs to innovate various new features in their products and try to develop more reliable and best quality products for China. Lenovo should adopt the new technology available in the market. It should maintain its own supply chain unit by itself to stabilize in the Chinese Market (Jing, 2011). Aggregation Aggregation strategy of Lenovo should include the strategy of first focusing on the metro cities of the China. The targeting of market should include the proper research on market like current needs and requirements of the new technologies which can help Chinese market effectively and efficiently (Ghemawat, 2007). The company should also do some special preparation for the Chinese market competition. Arbitrage The company should outsource Chinese operating system for the Chinese market. The company should develop the products according to the culture of China and should provide various attractive offers in the festival seasons. Hence, these strategies can be used to compete in the market of China. Relevance of the Strategies Most probably, the above strategies works in Chinese market. If we consider the described adaptive strategies, Chinese market is proved as best manufacturing unit for the Electronics items. People of China have the outstanding capability towards the electronics, Chinese market develops various Electronics products. There is very high level of competition in the Chinese market in Electronics. Thus, Lenovo should innovate new features for their products. Managing own supple chain in Chinese market may reduce various costs for Lenovo (OECD, 2011). Again, if we talk about the described Aggregation strategies, Chinese market already has lot of facilities available in the electronics market. Thus, for stabilising in the Chinese market the companies need to deeply go through the requirements of the market and find various solutions in the electronics field which can help the Chinese people in accomplishing the various tasks. If the company is able to find those facilities that can be innovated to help in Chinese market then that will help the company in making its reputation in Chinese market (Deutsch Asset Wealth management 2014). Chinese people are very conscious about their culture. Thus, adopting a Chinese operating system which can work in Chinese language can be a great idea for stabilising in Chinese market. Due to cultural consciousness for the Chinese people, Lenovo should mainly consider that there products should not hurt the culture of Chinese People. Conclusion Chinese market is a hub of electronics items or it can be said a great source of electronics items. Thus, it is very necessary to develop various strategies to stabilise as well as to retain its position in the Chinese market very carefully. Thus, Lenovo needs to develop and innovate new features in their products and should go through the Chinese market deeply. References 1. Mathur, Sameer (2012). Global Value Creation: Adaptation, Aggregation and Arbitrage. 2. Economist (2013). Here There and everywhere. 3. Lenovo (2009). An Excellent reason to think about outsourcing. 4. Heinecke, P. (2011). Success factors of Regional strategies for multinational Corporations, 3 (12) p. 15- 60. 5. Jing, Wang (2011). Global Strategies Of Chinese Companies. 6. Ghemawat, Pankaj (2007). Managing Differences, The central challenge of global strategy. 7. OECD (2011). Chinas Emergence as a Market Economy Achievements and challenges. 8. Deutsche Asset Wealth Management (2014). Understanding and accessing the Chinese Equity market.