4th sem project final
TRANSCRIPT
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Contents
Particulars Page
No.
Chapter 1 Industry overview 3
Chapter 2 Profile of the organization 23
2.1 Origin of the Organization 24
2.2 Growth and Development of organization 41
2.3 Financial Status of the organization 43
2.4 Organization Structure 45
2.4Product profile 46
Chapter 3 Discussion on Training 513.1 WorkProfile 52
3.2 Contribution to company 53
Chapter 4 Study of Selected Research problem 54
4.1 Statement of Research Objectives 55
4.2 Statement of Research problem 56
4.3 Research Design & Methodology 57
4.4 Analysis of Data 59
Chapter 5 Summary and Conclusion 87
5.1Summary and Learning Experience 88
5.2 Conclusion and Recommendation 92
Chapter 6 Bibliography 93
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Executive summery
Calculating the return over investment of newly initiated
lamps project at the Lenovo emphasizes the importance of
the calculating the return over investment of any new activity
that takes place at the company which required extra funding.
In this project we have tried to explain how we can calculate
the return of any productive investment in the percentage.
The main objective behind this project is to provide the
reader regarding how one can calculate how much we are
gaining from our new investment in terms of percentage. Also
in some case we can know where which product is selling
more and where we need to place our other product to get
better market share. Some time we also can push the high
profit margin product to be sold more to get improved profit.
For the benefit of the reader the comparison studies and
charts have given. To make analysis simpler we have given
the charts the location wise and also the product wise.
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The impact of the global economic crisis in 2008 reached far and wide.
It has significantly affected the worldwide PC market demand as many
large enterprises delayed purchase decisions and reduced IT budgets.
Even the growth of the China PC market has slowed down under the
economic challenges. At the same time, the PC industry as a whole
has shifted dramatically and rapidly to lower price points, imposing
additional pressures on industry players. During the 2008/09 fiscalyear, the year-on-year growth of worldwide PC market shipments
decelerated to approximately 4 percent mainly supported by consumer
and low-priced notebook segments. The China PC market and
worldwide commercial PC segment in which Lenovo is heavily
weighted showed significant slowdown in the second half of the fiscal
year under the economic crisis. In addition, the Group could not enjoy
the benefits of the growth in transaction space as it has not adequately
addressed the worldwide transaction segment outside China, in
particular the consumer market. Lenovo reported lower-than-market
growth in its worldwide PC shipments which only increased by
approximately 2 percent year-on-year. As a result, the Groups market
share decreased slightly to 7.6 percent, ranking number four worldwide
during the fiscal year. The Groups financial performance in the second
half of the 2008/09 fiscal year was significantly impacted by the
widespread economic slowdown. Lenovos overall sales for the fiscal
year decreased 9 percent year-on-year to approximately US$14,901
million, resulting from the slower PC shipment growth and a steeper -
than-normal decline in average selling prices exacerbated by the weak
economic backdrop. The Groups gross margin performance was
further affected by the continued shift in the market to lower price
points, aggressive pricing and currency fluctuations. The gross margin
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(excluding one-off items) for the fiscal year declined to 11.9 percent
from 15.0 percent while gross profit (excluding one -off items)
decreased 27 percent year-on-year to approximately US$1,779 million.
In anticipation of continued deterioration in the global economic
environment, Lenovo announced a global resource restructuring plan in
January 2009 to reduce costs and enhance operational efficiency.
About 2,500 employees were eliminated as a result of this action which
is expected to realize annual savings of approximately US$300 million
on a run rate basis in the coming fiscal year. Despite Lenovos efforts
to control expenses during the 2008/09 fiscal year, the decline in sales
and pressure on gross margin resulted in 95 percent year -on-year
decline in the Groups profit before taxation (excluding the cost of
restructuring actions and one-off charges) to approximately US$29
million for the year. The Group reported a loss attributable to
shareholders of approximately US$226 million, after accounting for
US$146 million of restructuring costs and US$71 million of one -off
charges. This compared to a profit attributable to shareholders
(including US$20 million net profit from discontinued operations) of
US$484 million in the previous fiscal year.
Vendorhighlights
Hewlett-Packard (HP) made further inroads into consumer portables
through the retail channel and continued to gain share overall. The
vendor's shipments grew 3.6% on year worldwide with above-market
performance in the US. The company also performed well in Europe
and Asia Pacific.
Although still heavily affected by the commercial slump, Dell saw goodgrowth from consumer-focused SKUs and reclaimed the number one
spot in the US. The company continues to restructure operations,
develop its consumer business, and should benefit from an eventual
rebound in the commercial segment.
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Acer continues to capitalize on its growing channel presence to ship
portables geared toward a wide range of cost-conscious consumers.
The company maintained its lead in mini notebook PCs while its early
entry into Atom-based netbooks should also pay dividends later in the
year. The company saw a significant gain in th e US market, likely
benefiting from the troubles of Dell and Lenovo.
Lenovo's renewed focus on notebooks and emerging regions produced
positive growth following declines in the past two quarters. Solid growth
was reported in Latin America and Asia Pacific market excluding
Japan, while yearly declines in mature regions slowed compared to the
first quarter of 2009. Its home court advantage in Asia Pacific market
excluding Japan also has led it to focus on a myriad of governmentstimulus programs, which could pay dividends while riding through the
commercial downturn.
Toshiba had a solid second quarter where it outgrew the market in
most regions and moved up to the fourth spot in the US. Toshiba's mini
notebook offering has helped it to weather the storm compar atively
better than other Japan-based OEMs and it was the only major Japan-
based OEM to have positive yearly growth in Japan.
Table - Top 6 vendors worldwide PC shipments
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matter whether companies operate production facilities or if they dobusiness with the country through exports. Many countries still haverestrictive policies which are maintained to protect domesticmanufacturers and production. Such policies often hinder foreigncompanies from entering into this market. The only possibility to dobusiness in those countries is to establish partnerships with local
companies, where they are additionally forced to accept minorityshares and to provide money and technological know-how. However,the computer industry sees great potential in those countries whichlose their restrictions. This is especially true for China which hasopened for many industries since its accession to WTO in2001. In thecourse of globalization trade barriers decline and new markets emerge,allowing free trade to expand.
2 EconomicThe computer industry expects a growth of approximately 10 percentover the next years. This growth is influenced by the economic
situation in a specific country, having an impact on the purchasingpower of potential customers. Additionally, changing inflation rates andcurrency fluctuation also determine the profitability of a company.
3SocialThe national demand for computers is dependent on the educationallevel prevailing in a specific country. The higher the educationalstandard, the higher is the demand. Furthermore, computers get moreand more involved in daily life. Today, children already get familiar withthe use of computers at a very young age, representing a generationthat will hardly live or work without a computer in future. Additionally,the brand image of a computer and lifestyle trends get more and more
decisive for the purchasing decisions. The computer industry adapts tothis trend, e.g. by offering a wide range of notebooks and by trying tocreate a strong brand name.
TechnologicalThere is hardly any industry that is characterized by a fastertechnological development than computer industry. Increased researchand development have caused permanent innovation processes whichlead to short product life cycles resulting in a faster depreciation of theproducts.
Market structureThe computer industry is characterized by a quasi -oligopolisticstructure. It is dominated by 5 major global players although there are alot of small companies which often serve only regional markets. Thefollowing graph illustrates the division of the computer market of eachindividual company.
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8Calculatingt1 e 2 eturnover Invest3 entof 4 A 5 PS6
rojectat 4 enovo
Company arket share in india
HP 14.9%E 9.5%EN VO 5.5%
ACER 7.9%HCL 8.4%OTHERS 53.8%
IndustryProfile
In India, thesoft areboomstartedsomewhere in the late1990s.
ost of the Indiansoftwarecompaniesat that moment offeredonly
limitedsoftwareservicessuchas thebankingand theengineering
software. Thebusinesssoftwareboomstartedwith theemergence
ofY2K problem, whena largenumberof skilledpersonnel were
required to fulfill the mammoth database-correction demand in
ordertocopeupwith theadvent of thenewmillennium.
HP
15%
DELL
10%
LENOVO
5%
ACER
8%
HCL
8%
OTHERS
54%
Market share
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The profile of the Indian IT Services has been undergoing a
change in the last few years, partly as it moves up the value chain
and partly as a response to the market dynamics. Ten years ago,
most US companies would not even consider outsourcing some of
their IT projects to outside vendors. ow, ten years later, a vast
majority of US companies use the professional services of Indian
Software engineers in some manner, through large, medium or
small companies or through individuals recruited directly.
The market competition is forcing organizations to cut down on
costs of products. The professional IT services on the other hand
are becoming increasingly expensive. The offshore software
development model is today where onsite profes sional services
were ten years ago. There is a high chance (almost a mathematical
certainty), that in less than ten years, the vast majority of IT
services (software development being just one of them) from
developed countries, will be, one, outsourced and two, outsourced
to an offshore vendor.
Despite the global economic slowdown, the Indian IT software and
services industry is maintaining a steady pace of growth. Software
development activity is not confined to a few cities in India.
Software development centers, such as Bangalore, Hyderabad,
Mumbai, Pune, Chennai, Calcutta, Delhi- oida-Gurgaon,
Vadodara, Bhubaneswar, Ahmedabad, Goa, Chandigarh, and
Trivandrum are all developing quickly. All of these places have
state-of-the-art software facilities and the presence of a large
number of overseas vendors. Indias most prized resource is its
readily available technical work force. India has the second largest
English-speaking scientific professionals in the world, second only
to the U.S. It is estimated that India has over 4 million technical
workers, over 1,832 educational institutions and polytechnics,
which train more than 67,785 computer software professionals
every year. The enormous base of skilled manpower is a major
draw for global customers. India provides IT services at one-tenth
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the price. o wonder more and more companies are basing their
operations in India.
The industry is in an expansion mode right now, with dozens of
new offshore IT services vendors emerging every day, the industry
has a high probability of being subjected to the 80:20 rule in not too
distant a future. In perhaps another ten years, 80 percent of all
outsourced offshore development work will be done by 20 percent
of all vendors, a small number of high qualities, trusted vendors.
Only a few select countries and only the most professional
companies in those countries will emerge as winners. India will
definitely be the country of choice for offshore software
development. It has the potential to become and remain the
country of choice for all software developments and IT enabled
services, second only to the USA. The third choice could be far
distant.
India is among the three countries that have built supercomputers
on their own. The other two are USA and Japan. India is among six
countries that launch satellites and do so even for Germany and
Belgium. India's I SAT is among the world's largest domestic
satellite communication systems. India has the third largest
telecommunications network among the emerging economies, and
it is among the top ten networks of the world.
To become a global leader in the IT industry and retain that
position, India needs to constantly keep moving up the value chain,
focusing on finished products and solutions, rather than purely on
skill sets and resumes. It also needs to be able to package its
services as products, rather than offering them as raw material. It
needs to be able to recognize and build up on its strengths and
work on weaknesses.
Another extension of the IT industry is the ITES (Information
Technology Enabled Services) which is a sector dependent on IT
sector.
Information technology consulting (IT consulting or business and
technology services) is a field that focuses on advising businesses
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on how best to use information technology to meet their business
objectives. In addition to providing advice, IT consultancies often
implement, deploy, and administer IT systems on businesses'
behalf.
The PC industry is one of the strangest in the world. There is
probably no other type of product that is so technologically
sophisticated, sells for so much money, and yet is sold by so many
companies for so little profit. The severe competition in the industry
is the #1 reason why so many problems are encountered by those
who deal with PC vendors. While I consider there to be absolutely
no excuse for a company not treating its customers fairly, at the
same time I think customers should have some idea of what
vendors are up against in this demanding marketplace.
Features of the Industry
y It Is Very Price Competitive: By far, the most important
thing to remember about the PC industry is this: it is one
of the most competitive in the world. The main reason for
this is the simple fact that making a PC is just not that
difficult. Most are assembled from standardized
components and not a lot of expertise is required. There
are few barriers to entry to the market, meaning it is easy
to set up a new PC company. As a result, there are tens
of thousands of companies making PCs that perform
similar functions. This causes the market to be extremely
price-competitive. Most of the other characteristics of the
industry follow directly from this fact.
y Systems and Components Sell with Low Margins:
Since the market is so competitive, vendors often sell at
very low margins. Computers aren't like many other
products, where the company selling the device is
making upwards of 50% of the price of the product as
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gross profit (meaning, profit before overhead and general
expenses). For PCs it is more like 10% or less. Many
people buy a $1500 PC thinking the vendor is making,
say, $500-700 on the item, and they find it hard to
understand why these companies aren't getting rich. It's
more typical for the vendor to make less than $100 profit
on such a PC. Some small companies make virtually no
profit at all on straight PC sales, and survive on post-
warranty support and consulting!
y The Market Experiences Rapid Price Fluctuations:
There is probably no other industry that has prices
change as dramatically and frequently as the PC
industry. Usually, prices are decreasing. This is good for
the consumer but very bad for vendors, because it
means that their already low margins get squeezed if
prices drop between the time that they buy a product and
the time they sell it. It's not unheard of for a vendor to
buy a component wholesale at price $X and find 24
hours later that the retail price has dropped below $X!
The vendor must then try to dump the product as fast as
possible to limit his losses. You won't find many
industries where this occurs with regularity.
y Vendors Keep Low Inventories: In an environment
where margins are low and prices are generally
dropping, keeping high inventory is a death sentence--
whenever prices drop the vendor potentially loses money
on every component in inventory at the time. For this
reason, most companies try to keep as little in inventory
as they can get away with.
y Vendors Contend With High Bankruptcy Rates:
Because of all the challenges involved in running a PC
business, the bankruptcy rate is high. Many vendors
have been in business only a short time. Some open a
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store, have it fail, and then open another one with a new
name, sometimes year after year.
y The structure ofPC industry is almost unique. The
original equipment manufacturers (OEMs) that produce
and sell PCs bear most of the risk, while the downstream
suppliers of components make most of the profit. Many
analogies have been drawn with other mature -product
industries, such as automobiles, but we find such
comparisons inaccurate. The key difference is that the
suppliers of PCs are struggling to identify meaningful
differentiation vs. competitors. This leaves manufacturers
competing primarily on price, which exacerbates the
pressure on margins. The airline business presents a
more realistic comparison. Aircraft manufacturers and
airports are profitable and continue to benefit from
growth in demand, but the carriers are struggling and
further consolidation is viewed as inevitable.
Although the apparent inability to differentiate products drives the
PC industry's focus on price competition, the downward movement
of pricing is also because of oversupply. There are too manysuppliers, all struggling with similar challenges in this highly cash -
intensive business. We continue to observe fire sales resulting
from overproduction and price-led promotions by PC suppliers
looking to accelerate cash flow or boost market share. The result is
an industry which, in some market segments, seems locked into a
"race to the bottom" in the pricing of products. Clearly, this trend is
unsustainable.
In ovember 2004, these observations, combined with our market
expectations for 2006 through 2008, led us to predict that by 2007,
three of the top 10 PC suppliers would exit the market. Within
weeks, IBM announced the sale of its PC Division to Lenovo
Group. Our market analysis was straightforward. Unit growth
between 2006 and 2008 will average about 6 percent, but revenue
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will remain flat. Key PC component suppliers, such as Intel and
Microsoft, have historically been highly adept at maintaining their
PC revenue, and their overall revenue from PCs will probably
continue to grow as the market continues to shift toward mobile
PCs. This leaves PC suppliers facing the prospect of producing
more PCs for dwindling revenue. This situation will inevitably lead
to further consolidation among the leading suppliers.
The impact of consolidation will not be limited to PC suppliers.
Intel, AMD, Microsoft and other component suppliers will also see
change as the structure of their market evolves. Although these
changes will ultimately result in a healthier PC industry that is
better able to equate innovation to sustainable business, the period
of adjustment will bring additional challenges to the buyers and
users of PCs. Choice of supplier and continuity of supply will be
less certain, while the adoption of emerging PC technologies will
present additional risk.
This collection of research further explores the analysis behind
these observations and examines the likely impact for PC
suppliers, key component suppliers and the buyers of PCs.
MajorPlayers in the PC Industry
y Hp:
y The Hewlett-Packard Company commonly referred to as HP, is
the largest PC manufacturer in the world. The company was
founded by Stanford University classmates Bill Hewlett and
David Packard in 1939.It is headquartered in Palo
Alto, California, United State and operates in more than 170
countries around the world. HP specializes in developing and
manufacturing computing, storage, and networking hardware,
software and services. HP is a Fortune 500 company and is
ranked 9 in 2009. In august 2001, HP and Compaq came
together to merge by a 25 billion$ stock deal.
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y The company employs 321,000 people as on 31st December,
2008. MarkV. Hurd chief executive officer and the chairperson
ofHP since September 22, 2006 has focused on maintaining the
companies leadership in exploring how technology and services
can help people and companies address their problem s and
challenges, and realize their possibilities, aspirations and
dreams.
y Even in the poor economic conditions of 2008, the company
had a net revenue growth of 13% from $104.2 billion in
FY07 to $118.3 billion in FY08.
y HPs Product Line:
The company HP provides a wide range of products and services to its
customers and is divided into six business segments:
y Personal Systems: Hewlett-Packard is the world's largest
manufacturer of personal computers, and its Personal Systems
Group (PSG) is responsible for the development and sale ofHP's commercial and consumer PCs, workstations, handheld
devices, digital entertainment systems, and other related
services and accessories.
y Imagingand Printing: Hewlett-Packard is the leading provider
of imaging and printing systems in the world. HP's Imaging and
Printing Group (IPG) provides consumer and commercial printer
hardware, printing supplies, printing media and accessories, and
scanning devices.
y Enterprise Storage and Servers : HP is one of the leading
providers of servers in the world, offering a wide range of
servers and storage products and solutions for small businesses
and larger corporations.
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y HP Services: This segment offers a large variety of information
technology services, including technolog y services, consulting
and integration services, and managed services.
y Software: HP's Software segment provides management
software solutions that assist large companies in managing their
operations and information technology infrastructure,
y HP Financial Services: Hewlett-Packard offers financing,
leasing, and other financial management services for its
larger enterprise customers, small businesses, and
educational and governmental customers in order to allow
its customers to purchase complete end-to-end information
technology solutions.
The company sets its corporate objectives as:
y Customer loyalty
y Profit
y Growth
y Market leadership
y Leadership
y Commitment to employees
y Leadership capability
y Global citizenship
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The SWOTanalysis of HP
STRE GTH
y Leadership position
y Consumer centric brand
y Strong after sales service
y Design strategy: looks
cost strategy
WEAK ESS
y Low flexibility: it does not
have high customization
available
y Decline in digital
entertainment market
y Software service
y Very poor HR policies
OPPORTU ITY
y PC business
y Service industry: bought
worlds o 2
Service provider EDS
THREAT
y Pricing pressure
y Component pricing
y Slow revenue growth
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as productivity software, security programs, and games. Dell
also sells a number of computer-related peripherals, including
LCD monitors, printers, input and storage devices, etc. Aside
from PC-related items, Dell sells various accessories and
electronic devices, such as LCD televisions, digital cameras,
and MP3 players.
y Servers and Storage 15% of total revenue in 2 8)
for its corporate customers, Dell provides both servers and
storage systems. Dell also sells customized servers and
enterprise systems designed to meet the specific needs of
certain customers.
y Technical Support and Services 9% of total revenue in
2 8) Dell also sells technical support services for its
products, providing customers with assistance after they
purchase their systems. In Fiscal 2008, revenue increased 6%
year-over-year to $61.1 billion, The company recorded net
income of $351 million for the fourth quarter ended Jan. 30, a 48
percent drop from the $679 million it recorded in last year's
fourth quarter. et income per share was $0 .18.
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SWOTanalysis of Dell
STRENGTH
y Inventory turnover rate is 6
days.
y Revenue growth at 100%
y Cost efficiency
y Direct to customer business
model: minimum credit risk
y Latest technology
customization
y Internet sales leadership:
$5M everyday worldwide
Weakness
y o proprietary
technology
y High dependency on
component suppliers
y Lack of software support
for customers
Opportunity
y etwork service in B2B
y Strong potential in china and
India
y Low costs and advanced
technology
y Growth in business,
education and government
markets
Threat
y Dells market share is
very less
y Price range considered
premium
y Currently fluctuation
policy instability
y Tariff trade barriers
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Acer Acer Incorporated is a Taiwan-based multinational electronics
manufacturer. Originally named Multitech, it was founded by Stan
Shih , his wife Carolyn Yeh, and a group of five others in 1976.
Multitech was eventually renamed Acer in 1987. Acer is renowned for the development and manufacture of
sophisticatedly and intuitively designed, easy to use products. Focused
on marketing its brand-name IT products around the globe, Acer ranks
as the world's o. 3 vendor for total PCs and o. 2 for not ebooks, with
the fastest growth among the top -five players.
Acers product line
y
Notebook 71% ofrevenue): otebooks are Acer's most profitableproduct, generating T$417 billion in revenue in 2008. Within the
past decade, growth in notebook sales has far outpaced growth in
desktop sales. For example, in 2007, overall notebook shipments
grew 33.8%, while desktop shipments grew only 4.8%.
y Netbook 9% of revenue): etbooks are an emerging type of
scaled-down portable computer, that are designed to be cheap, light
weight, and easy to use. Acer is the #1 producer of netbooks
worldwide by unit sales, with a 38% market share.
y Desktop 12% of revenue) : Annual revenue growth in desktop
sales has slowed from 50.2% from 2004 to 2005 to 3.8% in 2008 as
consumers demand more laptops. The company expects desktop
sales growth of 3-4% from 2009 to 2011.
y Display 5% of revenue): Acer manufactures LCD monitors,
HDTVs, and projectors. In addition to consumers, the company is
targeting businesses and governmental agencies for volume sales.
y Other 3% of revenue): Acer offers information security
management, software systems development, data center services,
and other IT support services. In addition, in 2008, Acer acquired E -
Ten, a Taiwanese manufacturer of Pocket PC phones and PDAs.
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SWOTanalysis of Acer
STRE GTHS
y Operational Efficiency Tight
Control on Overhead Costs
y Improved Economies of Scale
y Fast Reactions to Market Changes
After Cautious ROI Evaluation
y Aggressive Price Strategy
Particularly Suitable to a Time of
Economic Recession
y Strong global logistics
y
Strong relationships with suppliers
WEAK ESS
y Low Profit Margins
y Multiple Brands, Which Increase
Costs and Dilute Resource
y Brand perception as Low-
Cost PC Provider
y Insufficient Attention to the
Chinese Market the Second-
Largest in the World
y Limited Product Portfolio for
Midsize Business
OPPORTU ITIES
y Economic Downturn, Which Favors
Low-Price Products
y Growth of Mobile PCs in Homes in
Emerging Markets, Where BrandPreferences Are Weaker
y Growth Into the Chinese Market
y Growth Into Midsize-Business
Markets
y Reaching Larger7
umbers of
Customers by Targeting Various
Segments Through Multiple
Brands
THREAT
y Continued Price Decline in Mobile
PCs, Due in Part to Mini-
notebooks, Which Erodes Margins
and profitabilityy Excessive Reliance on Western
Europe, Which Contributed 40% of
Acer's Total Mobile-PC Revenue in
2008
y Dell's Expansion Into Indirect
Sales
y Samsungs entering into consumer
mobile PC s.
y Profit margin squeezed by sales to
telecom service provider.
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2.1Vision and Mission
Lenovo strives to be a new world company that makes award-winning
PCs for our customers. We operate as a company uninhibited by walls
or organizational structures using world sourcing to harness the power
of innovation across our global team. We design innovative and
exciting products and services to meet our customers needs.
2.2Company History
The following is a brief history of Lenovo:
2 :Legend shares peak at HK$14.75 on March 6.
2 1:Dell takes the largest share of the worldwide PC market for the
first time. Legend sales reach a peak of HK$27.2 billion in the fiscal
year ended March 2000 and decline to HK$23.2 billion in the most
recent fiscal year ended March 2004.
2 3:The Company changes brand name to Lenovo from Legend to
avoid infringement of overseas brands. The company says it is
preparing for expansion outside China, which has overtaken Japan to
become the world's second-largest PC market. The US remains the
world's largest PC market.
2 : The Company changes its name to Lenovo Group. Time
Warner Inc, the world's largest media company, on January 7 exits a
US$50 million Internet venture in China with Lenovo. China accounts
for 99 percent of Lenovo's sales in fiscal year ended March 2004 and
98 percent in the previous 12-month period. Lenovo's first-quarter PC
shipment growth in China lags rivals such as Dell, according to market
researcher IDC Corp. Lenovo has a 10.9 percent share of the Asian
market excluding Japan, compared with 7.3 percent for Dell. Lenovo's
Asian shipments rise 19 percent, compared with 52 percent for Dell.
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Lenovo's sales of services and hand-held electronics grow the fastest
of all its products in the most recent two fiscal years, each at an
average rate that roughly quadruples. Computer sa les rise at an
average rate of 9 percent in the same period. Lenovo becomes an
Olympic worldwide partner. It is the first Chinese company to become a
computer technology equipment partner of the IOC. Lenovo decides to
develop the rural market by launching the "Yuanmeng" PC series
designed for township home users. Lenovo and IBM announce an
agreement by which Lenovo will acquire IBMs Personal Computing
Division, its global PC (desktop and notebook computer) business. The
acquisition forms a top-tier(third-largest) global PC leader.
2 5:Lenovo completes the acquisition of IBM's Personal Computing
Division, making it a new international IT competitor and the third -
largest personal computer company in the world. Lenovo announces
the closing of a US$350 million strategic investment by three leading
private equity firms: Texas Pacific Group, General Atlantic LLC and
ew bridge Capital LLC. Lenovo establishes a new Innovation Center
in Research Triangle Park, .C., to enable customers,
business partners, solution providers and independent softwarevendors to collaborate on new personal computing solutions. Lenovo
introduces the industry's thinnest, lightest and most secure Tablet PC,
the ThinkPad X41 Tablet. Lenovo introduces the first widescreen
ThinkPad with embedded wireless WA , the ThinkPad Z60,
available for the first time with a titanium cover. Lenovo becomes the
world's largest provider of biometric-enabled PCs by selling its one-
millionth PC with an integrated fingerprint reader. William J. Amelio i s
appointed as CEO and President of Lenovo.
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2 6: Lenovo introduces the first dual-core ThinkPad notebook PCs,
improving productivity and extending battery life for up to 11 hours.
Lenovo technology flawlessly supports the 2006 Olympic Winter
Games in Torino, Italy, supplying 5,000 desktop PCs, 350 servers and
1,000 notebook computers. Lenovo also hosts seven Internet i.lounges
for use by Olympic athletes and visitors. The first Lenovo -branded
products outside of China debut worldwide. Researchers, sci entists
and product design teams from around the world combine Lenovo's
heritage in enterprise and consumer PC technology to design theLenovo 3000 product line, which features new desktop and notebook
models specifically designed to provide worry-free computing to the
small business market segment.
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OBJECTIVE OF LENOVO
Lenovo nose-diving into rural market
China's top PC maker, Lenovo Group Ltd, by introducing cheaper
computers, is plunging head-on into the country's rural market, where
PC penetration is low and purchasing power is weak.
Analysts said the firm's low-price strategy will help it strengthen its
market share, which is shrinking. But they are divided about the long -
term profitability of the low-priced PCs.
Lenovo last week introduced a new consumer PC series and an e-
classroom solution aimed at users in ordinary households and the
education sector in townships.
The retail prices for the new PC models will range from 2,999 Yuan
(US$361), a record low, to 5,999 Yuan (US$723).
Lenovo previously focused on PCs that cost more than 5,000 Yuan
(US$602).
"The growth of the whole PC market is lackluster. But the township
market remains largely untapped," said Yang Yeaning, chief executive
officer of Lenovo Group Ltd.
The launch of the low-price PCs is part of Lenovo's strategic shift. He
expects shipments of the new PC series will reach 800,000-1 millionunits within a year.
Beijing-based CCW Research said tapping the low-end market will
increase Lenovo's market share. And so it did."Lenovo is delivering a
message that it intends to cover all market segments, from high-end to
low-end, "The low-price strategy puts pressure on some regional
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brands.Besides, operating systems are not pre -installed in the DIY
market.
"We have been put in an unfair position," said Lu.
"If all vendors pre-installed legitimate operating systems and pay the
VAT, our market share would be much higher."
GAO estimates gross profit margins for Lenovo's new series PCs will
be about 8 per cent.
For fiscal year 2003, Lenovo's profit margins were 14.6 per cent,
compared with 14.8 per cent in the last fiscal year.
Edward Yu, president of research house Analysis International,
predicted the profit margins will be much lower.
"The shipments of PCs priced at 2,999 Yuan are unlikely to reach
100,000 units. Otherwise, it will be unprofitable," Yu said.
"The most likely scenario is quite a few of the PCs will be available in
the marketplace.
The low-priced move is largely a promotion strategy."
Since Lenovo is not adopting a "direct -sales" strategy, the firm is
unlikely to save the "channel cost," which usually accounts for nearly
one-fifth of the price, Yu explained.
Lu reaffirmed Lenovo will not follow Dell's "direct -sales" strategy.
Lenovo's low-price strategy is expected to spark a round of price -
cutting in China's PC industry. China's o 2 PC maker, FounderTechnology, "will not rule out the possibility of making a similar move,"
said I Dongfeng, the company's managing president.
Qi last week said he agreed China's rural market promises much
potential.
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"I believe that combination of the charm of soccer and the sci-tech of
computer will bring more color and pleasure to people's life, noted Marc
Ingle, vice president of Barcelona FC.
The list of the commercial value of soccer stars done by Germany-
based BBDO Consulting months before shows that Ronaldinho, with
32.6 million pounds tops the rank.
How Lenovo works fortheirconsumer.
Find the Target Consumer: Innovate for Them Lenovo define
product opportunities for their consumer divisions in desktop, notebook,
and cellular so they could better compete on meaning and value. We
needed to create an approach that captured the soul of the Chinese
consumer and inspired Lenovo's design teams. We needed to create
new research tools to find out which design elements have meaning
and value for specific groups of Chinese consumers. Lenovo with a 36-
month strategic product plan for each of its three consumer technology
platforms. Because they were building a strategy, design research had
to create targets for idea generation and concept refinement.
Search for the Soul To create product experiences that connect with
China's consumers, the team needed to understand three cultures:
China, users, and products. To build these connections, the team
developed an approach called "Search for the Soul," which integrates
immersive experience (live-the-life), rapid ethnography, and method
acting to uncover latent needs and wants.
Turn Insights into Experiences By bringing together a mixed group of
social scientists, design strategists, and designers, we made sure our
insights and ideas stayed aligned. Lenovo design anthropologists
uncovered the behavioral, sensory, and reminiscent needs of Chinese
consumers. Design strategists packaged consumer insights for the
design team, stressed the need for differentiation with competing
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products, and demanded relevance to the Lenovo brand. Designers
worked closely with strategists to visualize the potential of every new
product direction and to ensure that consumer insights were captured
in exciting new designs.
Culture Starts Now Search for the Soul included jump-starting cultural
immersion even before the team left for China. They studied the
Chinese billboards and had the client send rock, pop, classical, and
traditional Chinese music, which blasted in the war room. A professorof Chinese history was brought in to lecture on key cultural differences
between the U.S and China. The team collected Chinese objects of
desire -- wallets, lighters, and cell-phone holders -- and assessed their
color, material, and finish properties. To connect with popular culture
and messaging, They hired a Chinese exchange student to help
interpret lifestyle and technology magazine articles and
advertisements.
Live the Life There is no substitute for being there. The team split into
two smaller groups, and both spent four weeks immersed in three
different regions in China. Design anthropologists, design strategists,
and industrial designers talked on cell phones as they commuted on
bicycle with Beijing workers. They ate from street carts and dined on
pig brain and pigeon in large banquet halls. They walked the ancient
Hutong alleyways and sang late at night in karaoke bars. Observati ons
and issues about use behaviors outside of the home were noted as the
team rode buses and trains, wrote text messages in nightclubs, and
used notebook PCs in Starbucks (SBUX ). Visual inspiration was
drawn from fashion boutiques and electronics stores, from traditional
gardens and modern architecture.
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Find the Target The team leveraged demographic information for
Lenovo on desktop PC, notebook, and cell -phone consumers. The
team had to target the right psychographic group as well, given that
Lenovo was looking to create platforms that would not just create buzz
and die with early adopters but would achieve mass-market adoption
and enhance brand image. The team developed psychographic
screening criteria to target the "fast followers," who are the first
consumers to buy based on benefit rather than newness.
Home Visits Rapid ethnographies were conducted in users' homes.
The team toured areas of work, relaxation, sanctuary, and socializing in
each household. They went into closets and gained an understanding
of users' fashion tastes. We hired a native interpreter. onverbal,
visually engaging tools helped users communicate more freely,
revealing thoughts and emotions.
To understand how users live and use technology, we developed an
approach that let us squeeze two days of observation into two hours.
Prior to the interviews, participants were given a camera, a glue stick,
and two poster boards. We asked them to photo-document a weekday
and weekend or leisure day, giving special attention to moments when
they integrated technology into their routine. These visual time lines let
us into their daily behaviors and emotions.
To identify opportunities for product integration (for example, a laptop
that's also a TV), we created a tool called MatchMaker. MatchMaker
puts people in a defined -use scenario and lets them explore which
products (depicted as icons) they would use in particular
circumstances. When users chose multiple devices, MatchMaker
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helped us identify opportunities for convergent devices.
We developed a concept-building tool to define and understand what
people want in terms of features and benefits. Features were grouped
into categories such as space-saving, entertainment, input, and
communication. Our goal was to uncover why users gravitate to certain
categories and features.
After each rapid ethnography, the team used a brief download session
to check their impressions against the client's understanding of
Chinese culture. This approach helped our client understand our
generative and qualitative methods, and it helped us improve our
knowledge of Chinese culture.
Cultural Immersion Through Images In China, the team collected
images of furniture, cosmetics, fashion accessories, cars, and
architecture. Back in the U.S., we launched a Web-based visual study
with 400 Chinese consumers (100 for each of four newly identified
consumer segments) to help inform the direction for the products'visual expressions. We cropped the images so users would focus on
the forms and details themselves rather than on associations with the
brand or actual use of a recognizable object. The study asked users to
match the diverse forms, details, patterns, and colors to the desired
product attributes that had been iden tified for their particular user
group. The study identified patterns in how Chinese consumers visually
interpret product attributes.
Benefits, Not Features The goal of the evaluation was to determine
how design could benefit Chinese consumers. The goal w as not to
determine a single direction but to identify which design elements are
valuable. One-on-one qualitative evaluations were conducted with 40
consumers (10 per segment). The team identified four key benefits that
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people wanted from technology produc ts. For example, we asked each
user to rank the importance of "connecting with my friends" vs. "staying
up on the latest business trends." Making reference to models and
sketches, the participants chose those concepts that best matched the
benefits they sought and the design details that were driving their
impressions.
Cultural Insight We learned that consumers in China generally do not
make impulse purchases of large items. Rather, making large
purchases (such as technology products) is a highly involved and
researched decision-making process. The team used this knowledge to
help elicit detailed feedback on product concepts. By asking
consumers which concept they would be most interested in purchasing,
then asking which design elements contributed to their positive or
negative ranking, the team got a second read on how the concepts
delivered benefits through different design configurations.
Find Visual Gaps in a Saturated Market The team first tried mapping
Lenovo's and its competitors' offerings on a two-by-two matrix, but thisapproach failed. Competitive desktops, notebooks, and cell phones, in
particular, had run the gamut of visual expressions. The team switched
lenses and instead developed a new tool for visual analysis:
MediaMapping. Research in China revealed that users see value in
convergent devices (desktop PCs, notebooks, and cell phones) for
their ability to help them perform specific media activities, such as
gaming, photography, watching videos, and reading. MediaMapping
allowed our team to identify visual cues that current Lenovo and
competitive offerings were using to communicate proficiency in a
particular media activity.
Move from Everyday People to Aspirational Tribes. Innovate for
Their Needs When the team returned to the war room, they distilled
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the visual worksheets, photographs, and observations from each
interview into a single Ethnography Inspiration Sheet. These sheets
use pictures and captions to highlight emotionally the key needs of
each user group and to expose the top observations and challenges
each user faced. The Ethnography Inspiration Sheets were bound for
the client, to give a raw, visceral view into the current market.
To connect emotionally with consumers, you can't just design to their
current baseline needs -- you also need to connect with their
aspirations. Using the Inspiration Sheets as the foundation, the team
began to identify the aspirations, behaviors, and needs of distinct
clusters. These clusters became known as "technology tribes."
The five technology tribes identified were: Social Butterflies,
Relationship Builders, Upward Maximizers, Deep Immersers, and
Conspicuous Collectors. Each of these groups has vastly different
needs, ranging from the need to connect to a broad social network
(Social Butterflies) to the desire to seek escape through fantasy and
immersion (Deep Immersers). These profiles gave us a creative
springboard for concept generation and filters for evaluating concept
relevance. Our creative team worked with Lenovo to gauge the size of
each market segment.
To drive concept generation, the team used method -acting techniques
to understand how, for example, a Social Butterfly would use a cell
phone compared with how a Deep Immerser or a Relationship Builder
would do so. Search for the Soul led to a clear understanding of who
Lenovo's target consumers ought to be (four primary tech tribes: Social
Butterflies, Relationship Builders, Upward Maximizers, and Deep
Immersers) and laid the groundwork to create product-line strategies
for Lenovo's desktop, notebook, and cellular platforms.
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Deliver Actionable Insight The purpose of the evaluation was not to
select a single product for each platform but to build insight into how
users read benefits. The insights had to be actionable for the design
team. We emphasized the need to communicate insights in the context
of design elements. The result was a strategy that uses research-
based insight to communicate visually the desired product benefits. If
the team and the client wanted to enable Deep Immersers to escape
into immersive fantasy games on their cell phones, the del iverable
highlighted the appropriate design elements. Each concept was
evaluated for its ability to communicate benefits to the consumer.
Understand,Then Innovate Our research produced a desktop PC for
Deep Immersers, a notebook/tablet PC for Relationship Builders, and a
cell phone for Upward Maximizers. The products address the unique
needs of specialized customer tribes. The modularity of the multimedia
desktop PC enables users to easily modify and upgrade their systems.
The notebook/tablet PC makes sharing content with friends easy for
Relationship Builders. The cell phone has a PDA and camera, giving
Upward Maximizers the chance to multitask.
The definition of rich, psychographic tribes gave Lenovo's senior
management and marketing teams a common language and a
common vision of the future. Our research gave them a defined
segment map (based on behavior, attitudes, and values) to guide the
development of appropriate products for target consumers. Future
product lines are now organized around the needs of specific "tech
tribes." Our research gave Lenovo an understanding of Western
approaches to creativity and markets. Within months of the completion
of this project in 2005, Lenovo cemented its commitment to high -value
design by acquiring IBM's PC (ThinkPad) business unit
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SWOTanalysis
STRENGTH
y Lean cost structure
y Effective business model
y Innovation leadership
y Event sponsoring
y Good marketing and
distribution strategies
y Strategic alliance with
suppliers
y Quick responsiveness
y Strong R&D: taken over
from IBM
WEAKNESS
y Unable to maintain sustained
growth rate in all market
segment
y Ignoring potential market
y Retaining of largest shares
by competitors
y Poor global perception
yHigh delivery time:3 weeks
OPPORTUNITY
y Increasing global demand
for PC
y Specialty shops proving
one stop platform for
distribution
y Government organizations
increasing their spending
on IT
y Internet boom
y Increasing product
portfolios/ product lines
y et-books
y Converting manual orders
to automotive orders
THREAT
y Competition threat from
both local and international
markets
y Industry reaching maturity
y Software piracy and clone
market
y Price war
y Emerging small firms
y International competitors
forming alliances with local
competitors.
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STRENGTH
1. Lean cost structure:
The Groups distinctive capability and expertise in managing
costs and expenses allows it to achieve high efficiency and has
been one of the most important factors for its success. This has
become more critical under the current economic conditions.
2. Effective business model:
Lenovos dual business model sets its products, services and
business process around customer need and market
segmentation. This tightly integrated, end to -end model allows
the Group to quickly react to market dynamics and changes in
the back-end.
3. Innovation leadership:
Lenovo owns the greatest track record for innovation in the PC
industry and remains committed to innovation in its products and
technology. While it needs to be cost-effective, innovation can
drive business and add value for customers.
. Good marketingand distribution strategies:
Promotion and distribution at Lenovo is done through a network
of channel partners, retail stores, Teleweb, and Lenovo
authorized dealers across the globe. Lenovo also promotes
environmental friendly green produ cts- ThinkPad X300 series is
the first notebook to earn Green Guard certification
5. Strategic alliance with suppliers:
Since Lenovo is horizontally integrated, it depends on the
outsourced suppliers for in time delivery of quality products; like
many companies, keeping the customer always in mind, time
and quality.
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6. uickresponsiveness:
The company has Best-in-Class Service. It has 24/7
Technical/Sales Support centers across the globe.
7. Strong R&D: taken overfrom IBM:
Acquiring a reliable/well-known company such as IBM has
helped boost its products, especially ThinkPad and Idea Pad.
8. Event sponsoring:
Lenovo was the TOP Sponsor of the Olympic Games and
provided the technology hardware for these Games in 2008.
early every aspect of the management of the Games, from
gathering and storing participant data to displaying the scores,
was dependent on hardware provided by Lenovo. It gave
Lenovo an upper edge as compared to other competitors.
OPPORTUNITY
1. Increasing global demand for PC:
2. Signing of memorandum of understanding: The company can
develop their market in US by signing a memorandum of
understanding with the US
3. Specialty shops proving one stop platform for distribution
. Government organizations increasing their spending on IT
5. Internet boom
6. Increasing product portfolios/product Lines
7. et-books
8. Converting manual orders to automotive orders
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WEAKNESS
1. Unable to maintain sustained growth rate in all market segment:
Lenovo is heavily weighted showed significant slowdown in the
second half of the fiscal year under the economic crisis because
it has not adequately addressed the worldwide transaction
segment outside China, in particular the consumer market.
2. Ignoring potential markets: The main focus of Lenovo is on the
established markets and they lack marketing strategies to enter
into the untapped markets.
3. Retaining of largest shares by competitors: Lenovos
competitors have larger number of shares in the market. HP
(18.1%), Dell (15.6)%, Acer(9.4)% give Lenovo a tough
competition.
. Poor global perception: In China, the customers perceive
Lenovo as a premium brand, but Lenovo has to reinforce this
perception to its global brand.
5. High delivery time: The order delivery time in Lenovo is around
3 weeks. This results in customers waiting for a longer time.
THREAT
1. Competition threat from both local and international markets:
2. Industry reaching maturity:
3. Software piracy and clone market:
. Price war
5. Emerging small firms
6. International competitors forming alliances with local
competitors.
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76
2008/09AnnualReportLenovoGroup
2.3 financial status of the organization
CO SOLIDATED I COME STATEME TFor the year ended March 31, 2009
Continuing operations
Sales
Cost of sales1
8
,99
1,351
@13,159 ,7
8
2)16,351,503
(13,901,523)Gross profit
Other income net
Selling and distribution expenses
Administrative expenses
Research and development expenses
Other operating expenses net
1,78
1,69
9
929
@
938 ,451)
@
627 ,99
3)
@22
9,010)
@
166 ,305)
2,449,980
17,261
(1,103,713)
(595,902)
(229,759)
(38,823)Operating (loss)/profit
Finance income
Finance costs
Share of profits of associated companies
@210,131)
59,977
@38,142)
351
499,044
52,048
(38,366)
124(Loss)/profit before taxation
Taxation
@187 ,945)
@
38,444)512,850
(47,613)(Loss)/profit from continuing operations
Discontinued operations
Profit from discontinued operations
@
226,389)
465,237
19,920(Loss)/profit for the year
@
226 ,389) 485,157
(Loss)/profit attributable to
shareholders of the
Company
@
226,392)
464,343
19,920
Minority interests
@
226,392)
3
484,263
894@
226 ,389) 485,157
dividends 35,575 186,753
Basic (loss)/earnings per share attributable
to shareholders of the Company
Continuing operations
Discontinued operations @
US2.56 cents)
US5.29 cents
US0.22 [email protected] cents) US5.51 cents
Diluted (loss)/earnings per share attributable
to shareholders of the Company
Continuing operations
Discontinued operations @
US2.56 cents)
US4.86 cents
US0.20 cents@
US2.56 cents) US5.06 cents
2009 2008US$000 US$000
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2008/09AnnualReportLenovoGroup
BALA CE SHEETSAt March 31, 2009
particular 2009 2008
US$000 US$000
Non-current assets
Property, plant and equipment
Prepaid lease payments
Construction-in-progress
Intangible assets
Investments in subsidiaries
Interests in associated companies
Deferred tax assets
Available-for-sale financial assets
Other non-current assets
1,035
7,780
12,235
1,860,176
617
13,893
8,243
1,187,893
1,881,226 1,210,646
Current assets
Inventories
Trade receivables
Aotes receivable
Derivative financial assets
Deposits, prepayments and other receivables
Amounts due from subsidiaries
Income tax recoverable
Bank deposits
Cash and cash equivalents
596
1,013,394
163,618
6,679
1,369,267
338,1221,177,608 1,714,068
Total assets 3,058,834 2,924,714
Share capital
Reserves
29,530
1,792,581
29,699
2,066,469
Shareholders fundsMinority interests
1,822,111
2,096,168
Total equity 1,822,111 2,096,168Non-current liabilities 453,356 684,399Current liabilities
Trade payables
Aotes payable
Derivative financial liabilities
Provisions, accruals and other payables
Amounts due t o subsidiaries
Income tax payable
Short-term bank loans
Current portion of non-current liabilities
383
18,945
329,039
435,000
1,991
13,955
93,201
35,000783 ,367 144,147
Total liabilities 1,236,723 828,546
Total equity and liabilities 3,058,834 2,924,714
Net currentB
liabilities)/assets 394,241 1,569,921
Total assets less current liabilities 2,275,467 2,780,567
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2.4Organizational Structure
It is the formal and informal framework of policies and rules, within
which an organization arranges its lines of authority and
communications, and allocates rights and duties. Organizational
structure determines the manner and extent to which roles, power, and
responsibilities are delegated, controlled, and coordinated, and how
information flows between levels of management. This structure
depends entirely on the organizations objective and the strategy
chosen to achieve them. In a centralized structure, the decision making
power is concentrated in the top layer of the management and tight
control is exercised over departments and divisions. In a decentralized
structure, the decision making power is distributed and the
departments and divisions have varying degree of autonomy.
There are various functional departments like-
HR Department
Relational Department
Strategic Department
Legal Department
Financial Department
Marketing Department
Transactional Department
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rojectat H enovo
rgani ational Structurechart
People
Companybelieves that theirpeopleprovide them thecuttingedgeand
for the sustainable success, their performance orientation and
customer focus is imperative. Thecompanybelieves that onlywhere
peoplegrow, theorgani ationgrows. Peopleare thebiggest asset of
the company. They believe that the biggest brands they stand for
today are a consequential of our best people. The company has
measurement systems and recognition schemes to identify and
encourage individuals and teams demonstrating customer service
excellence.
Rewards, promotionsandgrowthopportunitiesat Lenovoarebasedon
performance. Thecompanyensures that all of theirpolicies, forward -
looking initiativesandgoalsare fullycommunicated toall the
employeesand that theyunderstandandrelate to these. Companys
commitment to theirpeople isreflected in thesenseofbelongingand
pride they feel towards thecompanyand thepassionandcommitment
theybring to theirwork.
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2.5Awards and Certifications:
1)"Client of the Year" in the Advertising Big Bang 08, organized by the
Ad Club, Bangalore.
2) MEDIA, the premier marketing trade publication in Asia has awarded
Lenovo the Communicator of the Year for this years Asia -Pacific PR
Awards.
In particular, Lenovos sophisticated usage of social media and
willingness to blur the lines between conventional marketing and PR
impressed the
Media editorial team this year.
3)In DIGIT's cover story
Icons of Trust 2008 which brands can you rely on?:
Lenovo/IBM beat all other brands to bag the top spot on the Trust
IndexLenovo has been voted the most trusted brand in the Laptops category
4)Lenovo India wins three awards in the DQ Channels Channel
Choice Awards 2009
a) Best Marketing Support- Silver award
b) Best Commercial Terms- Silver award
c) Best Online Support Silver award
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2.6LenovoProducts
Notebooks
Think
Pad
oteb
ooks
Track recordofsuccess,cost-savings Industry-leadingcapabilities
that dramatically increaseproductivityandreducecost.
eatures:
Businessclass technology
Thin, light widescreendesigns
E tra longbattery life
dvanced mobile orkstations
IdeaPad otebooks
Engineered for a great user experience Perfect for home/home
office, with distinctive designs and features for entertainment and
multimedia.
eatures:
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Home/officeversatility
. to 7 inches idescreendisplays
olbyhometheatreaudio
Touchsensitivecontrols
Veri acefacerecognitionsecurities
Lenovo3000 otebooks
Worry-freecomputingat agreat value.
A smart choice forbusinesscomputingneedsandbudgets. Plus, new
models ideal forhome/homeoffice.
Features:
oomy, idescreendisplays
Stylishsilvercoloredtopcovers
Preloadedsmall businesssoftwares
LenovoCaretools,supportandservices
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Desktops
ThinkCentreDesktops
wardwinning uality and innovation Industry-leading capabilities
that dramatically increaseproductivityandreducecost.
Features:
Energyefficientdesktops
Securityonacorporate level atasmall businessprice
Dual IndependenceDisplay (DID)
TheThinkCentre EnergyCalculator
IdeaCentreDesktops
New PCs for home/home office Loaded with features for everything
from family finance tomultimediaandentertainment.
Features:
VeriFacefacerecognition
utomaticbrightnessadjustment
ntibacterial keyboard
neKeyconvenience
Workstations
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ThinkCentre orkstations
Features:
sercentricdesign
Cool and uiet
ISVcertificationsEnvironment-friendly
Servers
TowerServers
Features:
Singleanddual sockets
EasiercoolingExisting-networkscalability
Harddiskdriveoptimi ation
ack Servers
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Features:
Singleanddual sockets
Space-optimi eddesign
Centrali edcable management
Centrali edservermanagement
Accessoriesand pgrades
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3.1WorkProfile
In Lenovo we were exposed to the different departments to
know how they work and also how they are interrelated and integrated
with each others.
For our project about calculating the return over investment of the
mareting activity we were exposed to the marketing activity and also
the finance activity.
In addition to that we were also part of the many events that
took place in the company we also given the crucial responsibility of
that event. For some events we were given whole end to end
responsibility for that event.
Some of the event:
PMCP: People Manager Certification Program
In this program we were responsible to rectify, modify and
rearrange the reading material of the managers for the programs
and also establishing the online examination and material
reading facility.
Also handling the all backhand process for that program.
Events:
We were part of many events like the kickoff event which is the
main new financial year stating event. we were responsible for
whole backhand operation of that event.
Other event was the kids at work event where kids of employee
come to office and we have whole day fun activity for them. In
this event we were responsible for end to end from planning for
the fun activity to its execution.
For our project we work closely with the marketing and Finance
team with a view to understand how we can calculate the return over
investment of the marketing activity which sometimes non-tangible.
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3.3Contribution to the company
While being in the company we did take some initiative like the PMCP
(people manager certification program).Which was basically for the
managers and to transform them to managers to People managers
which can be a great impact in terms of making the employee base
more empowered and more committed too organization and its goals.
About over project calculating the Return over Investment of the
marketing activity gave a good view about the how some of the
marketing activity is brining good amount of revenue and how some
helps to build strong brand image among the consumers.
It also helps to finance to check is the money invested in the
marketing activity is bring good impact or not, and also for the
marketing team to check which activity is non productive and which is
giving more productive result.
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4.2 Statement of Research problem
In the research problem we need to find out the Return
over investment of the particular LAMPS activity.
y The 18 locations marketing activities were taken into the
consideration where the company operated that particular
marketing activity.
y To get the all the data about the products was not possible
y To get information about the intangible return is not possible
it can only be shows in the charts or graphs
y To get all the information about the all items sold via that
marketing activity is not possible.
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4.3Research Design & Methodology
Research method: research method is analytical in nature
The research is based on the facts and the
information already available and analyze to make an evaluation, so
the analytical method is return over investment.
Data collection:
The source of data is from the third party vendors and also the
people of marketing team and their trackers about the cost of the
particular marketing activity.
Primary data:
Meaning- Are those data, which are originally collected for the
first time for a specific purpose by an investigator? They are collected
directly from the people to whom the enquiry is related. They are
original in character and primary to the institution, which collects them,
they are secondary to all other institution except the one, which has
collected them.
This was chosen to obtain both qualitative and quantitative
information from the despondence.
Here primary data are those data which were collected
from the third party vendors about their sales in the particular quarter.
Secondary data:
Meaning- Are those data, which are already collected,
processed and used by someone else for their own purpose. They are
either published or unpublished. They are finished products. They aresecondary to all institutions except the one, which has collected them.
Here secondary data is those data is the data or the
feedback got from the marketing manager and finance manager. Also
some details published by the some magazines or the blogs.
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4.4Analysis of Data
About the LAMPS project
LAMPS is newly initiated project of the Lenovo to sell
their product with the Operating system of the other companyto increase the market share. In the project the third partysales specialists are hired for the sales of the certainproducts with the operating system of the other company.
The hired person is paid by the both party Lenovo aswell as the Operating system vendor to make more combinesales. The other aim of this project is to provide more marketcoverage to the small and medium business (SMB) unit. ThisLAMPS Sales people reports directly to the SMB head of the
India.
For the analysis we got the all the specific informationof the payment of the LAMPS sales people as well as thedetails information about their sales for the 3 months. Thedetail contents the number of product sold by the each salesperson and also the cost incurred for that particular salesperson.
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Lamps Sales Persons Cost details:Because of the confidential reasons the product name and locationname is not given.
ote: there is only one sales person in the particular location.All the revenue and profit figures are in I R
cost to company
location basic months total basic travel incentives total
a 19000 3 57000 8550 50243 115793
b 19000 3 57000 8550 49238 114788
c 19000 3 57000 8550 30410 95960
d 19000 3 57000 8550 67272 132822
e 19000 3 57000 8550 31679 97229f 19000 3 57000 8550 51565 117115
g 19000 3 57000 8550 24910 90460
h 19000 3 57000 8550 29352 94902
i 19000 3 57000 8550 22741 88291
j 19000 3 57000 8550 23535 89085
k 19000 3 57000 8550 33477 99027
l 19000 3 57000 8550 78749 144299
m 19000 3 57000 8550 49449 114999
n 19000 3 57000 8550 50560 116110
o 19000 3 57000 8550 20890 86440
p 19000 3 57000 8550 30516 96066
q 19000 3 57000 8550 6452 72002r 19000 3 57000 8550 37021 102571
total 1026000 153900 688059 1867959
This cost details given are only those which is paid by the Lenovo tothe sales person. It includes the basic salary travel allowance and theincentives that they earn for their sales.
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Lamps Sales Persons detailed Sales report.
The data contains only those products which are being sold by themand its the region wise data as there is only one sales person for theparticular location.
Locationproduct1
product2
product3 total
A 669 151 130 950
B 600 210 121 931
C 225 100 250 575
D 850 272 150 1272
E 360 20 219 599
F 600 175 200 975
G 300 100 71 471H 400 75 80 555
I 350 40 40 430
J 350 20 75 445
K 430 28 175 633
L 768 335 386 1489
M 510 105 320 935
524 41 391 956
O 158 22 215 395
P 495 47 35 577Q 100 11 11 122
R 472 33 195 700
Total 8161 1785 3064 13010
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Calculation of the Total revenue and profit forProduct-1.
Product-1
Average Unitprice INR) 25000 profit % onsales price 5
Location quantity total revenue profit
A 669 16725000 836250
B 600 15000000 750000
C 225 5625000 281250
D 850 21250000 1062500
E 360 9000000 450000F 600 15000000 750000
G 300 7500000 375000
H 400 10000000 500000
I 350 8750000 437500
J 350 8750000 437500
K 430 10750000 537500
L 768 19200000 960000
M 510 12750000 637500524 13100000 655000
O 158 3950000 197500
P 495 12375000 618750
Q 100 2500000 125000
R 472 11800000 590000
Total 8161 204025000 10201250
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Calculation of the Total revenue and profit forProduct-2
Product-2
Average Unitprice INR) 27000 profit % onsales price 10
Location quantity total revenue profit
A 151 4077000 407700
B 210 5670000 567000
C 100 2700000 270000
D 272 7344000 734400
E 20 540000 54000F 175 4725000 472500
G 100 2700000 270000
H 75 2025000 202500
I 40 1080000 108000
J 20 540000 54000
K 28 756000 75600
L 335 9045000 904500
M 105 2835000 28350041 1107000 110700
O 22 594000 59400
P 47 1269000 126900
Q 11 297000 29700
R 33 891000 89100
Total 1785 48195000 4819500
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Calculation of the Total revenue and profit forProduct-3
Product-3
Average Unit
price INR) 32500
profit % on
sales price 5
Location quantitytotal
revenue profit
A 130 4225000 211250
B 121 3932500 196625
C 250 8125000 406250
D 150 4875000 243750
E 219 7117500 355875
F 200 6500000 325000G 71 2307500 115375
H 80 2600000 130000
I 40 1300000 65000
J 75 2437500 121875
K 175 5687500 284375
L 386 12545000 627250
M 320 10400000 520000
391 12707500 635375
O 215 6987500 349375P 35 1137500 56875
Q 11 357500 17875
R 195 6337500 316875
Total 3064 99580000 4979000
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Total revenue and profit Table
Lo ation
Total
revenue
Total
profit
CD
F
H
I
J
R
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ow we will calculate the return over the investment by the locationwise and also the graphical presentation of it.
For calculating