Curious about journey of Lenovo from dominating the domestic market to becoming a recognized global brand? Let’s uncover the strategic path that led to its remarkable rise in the tech industry.
Building a Global Brand
Lenovo is an international technology company founded in 1984 as Legend Group Ltd.– spin-off of Chinese Academy of Science. It is a global leader in the PC market, which means it develops, manufactures, and markets cutting-edge, reliable, high-quality PC products and value- added professional services.
Legend was the first company that introduced the PC concept to the People´s Republic of China. Moreover, it was established to distribute computers like HP or IBM in the country. Since 1997 Lenovo is the leading company in Chinese market with approximately 3 billion US of annual revenue for the year 2005.
In 2003, Legend Group launched new brand Lenovo, to meet future business development and laid the foundations for overseas market expansion. After the takeover of IBM PC Division, Lenovo had 7,8% of the world PC market. It has been ranked number one in the Asia Pacific (excluding Japan) market with a 55% market share at the end of 2005. This formed the third largest PC enterprise in the world.
The achievement of becoming such a powerful brand in Chinese market would not have happened without the competitive advantage. This prevalence was characterised by a strong brand recognition, good relationship with government and educational institutes, highly efficient operations, diversified distribution channels and market leadership with more than 30% market share.
Lenovo´s business performance proved its deep insight into the China IT market and clear understanding of user needs.
Until the year 2006, Lenovo has deeply penetrated local market with the help of 6.000 retailers and distributors. Moreover, to improve its position in application markets, built up strategic alliances with Intel and Microsoft.
Brand Development
Coming back in time, to the period from before IBM PC Division acquisition, the brand story of Lenovo started in 1992 with promotion of corporate brand Legend and creation of concepts: Legend 1+1, Household Computer and Economic Computer. During that time the company launched a campaign, using “What is the world going to be if we stop dreaming?” slogan.
The campaign had an extremely positive impact on the Chinese public since it sounded romantic and, after conducting a survey,- the company found out that 12,9% of customers learned about the company from this slogan and 7,6% bought the Lenovo PC because of it. After several marketing campaigns Legend was able to broad awareness and recognition of its brand name and build a loyal customer base.
In the early 2000s Lenovo faced some challenges, with slow growth on demand, intensive competition, diversified customer requirements. To solve it, the company divided individual clients into three segments: starters, main streamers, and senior players. To target them better, the company introduced new sub brands that helped Legend deliver different associations of easy life, passion, and harmony, with functional benefits and self-expressive benefits to different customers.
Legend changed its brand name to Lenovo for the purpose of internationalization. “Le” was taken from Legend to honor their roots and “novo” is a Latin word for “new”. During this period Lenovo focused on incorporation of emotional values and selected brand personalities consistent with those values. Lenovo positions its brand as integral, innovative, easy, and professional service.
Brand Management
After acquiring the PC unit of IBM, Lenovo got the ThinkPad brand, IBM’s more advanced PC manufacturing technology. Moreover, the company’s international resources, such as its global sales channels and operation teams. Lenovo got access to IBM´s global brand through 5-year right to use the brand of IBM. Lenovo has taken over IBM´s Think family brands including ThinkPad and ThinkCentre (innovation, reliable quality, professional services).
IBM then removed the barrier to Lenovo´s products- in particular outside of China. With this, IBM created a stamp of approval that allows Lenovo to become more trustworthy in the eyes of its customers.
Both companies announced a “commitment” to ongoing operational cooperation– each acting as preferred partner to the other. The association between them intends to bringing fresh markets and new customer relationships to be leveraged.
In the sense of brand personality, Lenovo became more than just a PC. It acts like an efficient communicator of the personality of the owner. With the values that are beyond functions of PC, Lenovo´s challenge is to develop further to make it accepted widely and make it an icon. The symbolic value of Lenovo expands to include meanings that symbolize social position, status that locate the individual in social- material terms.
Lenovo can deliver the PC brand along with regular maintenance and integrated solution support through a series of communications from the brand to individual customers. The service component enhances company´s ability to create value, energize Lenovo brand and differentiate itself.
The Olympics Sponsorship
Sponsorship Research International (SRI) survey on Olympics sponsorship effectiveness was conducted. It showed that products presented on Olympics are considered famous and world-class. Such sponsorship has a positive effect on product and corporate image. In 2004, as the first Chinese company, Lenovo joined The International Olympic Committee (IOC) for period 2005-2008. Lenovo managed to win out being an Olympic partner. This not only presents the company in a great position as a global corporation, but also elevates the image of China and Chinese companies.
If Lenovo was not superior, Olympics would not use it. This provides the credibility and association of being a leader in computer technology industry. Being ‘The Olympic Partner (TOP)’ provides relevance and communicates more than a product advertising.
Lenovo has achieved this success through creation of links around the sponsorship. Completing this with activities including promotions, public events, website content, newsletters, and advertising.
The new Lenovo brand enables to retain the existing customer base in China and worldwide. Moreover, allows to address competitive threats and enter new markets.
Lenovo provides an essential synergic force in the portfolio while subbrands- ThinkPad and ThinkCentre represent the reputation and recognition of IBM brand.
Key Takeaway
The re-born Lenovo brand filled its brand image with new values. Influenced the market environment and positioned itself as a differentiated brand leader, building a bridge from the east to the west. Lenovo is the first global brand “Made in China”.
Sources: 1; Kotler, P., & Pfoertsch, W. (2006). B2B Brand Management. Springer Berlin Heidelberg.