Case Study: Lenovo’s “PC Plus” Strategy

Lenovo is the largest personal computers (PC) maker in the world as ranked by IDC, but global PC market is a hyper-competitive market with tough competition from competitors like HP, DELL and Acer. The industry also suffers from low profit margins too where Lenovo’s profit margin is around 2% only compared to Apple’s profit margin of 25-30%. Also the PC market itself is declining as consumers are buying more tablets and smartphones which is affecting the sales of desktop computers and laptops. All these factors have pushed Lenovo to adopt a new business strategy called as “PC Plus” Strategy, which covers terminal products like PCs, smart phones, table PCs and smart TVs. Lenovo’s acquisition of Motorola Mobility’s handset and tablet business from Google, following its acquisition of IBM’s x86 server business, puts the company exactly where it wants to be: at the forefront of the computing and smart devices businesses. Starting with its strong base in the world’s fastest growing market, China, Lenovo has thrived by acquiring, integrating and reengineering leading global hardware businesses. Already the world leader in PC sales and one of the largest tablet vendors, the IBM acquisition made it a major global player in data center hardware; the Motorola Mobility acquisition makes it a major global player in handsets. “It’s a very logical extension of our strategy,” said Gerry P. Smith, the head of Lenovo’s Americas business. “A couple of years ago, we recognized that the business is not just about PCs anymore.” Lenovo has been successfully implementing this strategy as highlighted by June 2013 IDC numbers, Lenovo has a 7% share of the global “smart interconnected device market” — smartphones, tablets, and PCs and the market is dominated by Samsung with 24% and Apple 14% market share, Lenovo is followed by, HP, with 3.6%.… Read the rest

Case Study: Cisco “Self-Defending Network” Ad Campaign

Besides being one of the NASDAQ’s fastest-growing stocks during the late 1990s, Cisco was also the world’s leading producer of switches and routers that directed traffic across the Internet. In 1998 Cisco released advertising that encouraged Internet usage, which in turn increased the demand for Cisco’s hardware. Two years later Cisco’s ad agency, Hill, Holliday, Connors, Cosmopulos, Inc., introduced a $43.8 million campaign with the tagline ‘‘Empowering the Internet generation.’’ The campaign’s television spots, including one titled ‘‘Factory,’’ featured Cisco’s hardware increasing businesses internet usage, which indirectly boosted the businesses profits. After the technology sector plummeted in late 2000, Cisco did not release a campaign for almost three years. In June 2002 Cisco awarded its advertising account to DarkGrey, the technology unit of Grey Global Group. For its first few months doing business with Cisco, DarkGrey developed a campaign with the tagline ‘‘Advancing the human network.’’ None of the DarkGrey advertisements were actually released, however. When Marilyn Mersereau became Cisco’s new vice president for corporate marketing in late 2002, she turned Cisco’s advertising account over to Ogilvy & Mather, an agency she had worked with as vice president of global advertising at International Business Machines Corporation (IBM).

In 2003 Ogilvy & Mather released the largest campaign in Cisco’s history, the $10–$150 million ‘‘This is the power of the Network. Now’’ campaign. With the goal of positioning Cisco as a leader in networking technologies for businesses and individual consumers, the campaign focused on associating Cisco’s brand with ingenuity. In a television spot titled ‘‘Olive,’’ the CEO of an olive distributor was humorously shown reducing his company’s costs by optioning for an Internet-based phone system.… Read the rest

Case Study: The Rise and Fall of Nintendo Wii

Nintendo was founded in Kyoto, Japan, in 1889 under the name of Nintendo Koppai by Fusajiro Yamauchi. They made decks of playing cards, known as Hanafuda, in Japan. The cards were made by hand originally and became very popular. As demand soared, Yamauchi hired assistants to mass-produce his cards and he opened up a second shop in Osaka. Nintendo took off as one of the largest card makers in the world and maintained that status until the 1950’s. In 1963, Nintendo Playing Card Co. became, simply, Nintendo Co. Hiroshi Yamauchiunimpressed with the limitations of the playing card industry, began to seek out other ventures. Their line of Disney themed cards had given the company a large cash injection, and risks could be taken. In the short period between 1963 and 1968, Nintendo opened and shut down unsuccessful ventures ranging from love hotels to taxi services to a TV network. They attempted to enter into the toy market in 1966, but lacked the ability to keep up with the quick turnover required and were outmatched by already established companies such as Bandai

Finally, in the early 1970’s Nintendo saw some success with family entertainment. They created a line of arcade games with the new light gun technology. While their larger arcade ventures had to be shut down due to the global oil crisis and recession of the early 70’s, Nintendo saw promise in the emerging arcade and home entertainment market. Starting with the rights to distribute the Magnavox Odyssey in 1974, Nintendo broke into the video game industry, slowly.Read the rest

Case Study: Reasons Behind the Collapse of Research in Motion (RIM)

Jim Balsillie and Mike Lazaridis are running Research in Motion (RIM) as co-CEOs since 1993 successfully until 2011 and the company had been through a turbulent year. Analysts and investors believe that co-CEOs are ruining the company. Lazaridis takes care of the technical side (Engineering & R&D) and Balsillie is responsible for the Finance, sales and marketing. Lazardis built Blackberry, a device which was a new type of wireless handheld solution for companies and it created an uncontested market space with in the enterprise segment and companies saved time and money because employees can access email almost from any place at any time without having to go back to the office. Balsille sold the device successfully to Companies and Governments and created an uncontested market space with in the enterprise segment, reaching beyond existing demand to unlock a new mass of customers (B2B) that did not exist before and aggressively partnered with wireless carriers to expand availability, with 100,000 installations of BlackBerry Enterprise Servers worldwide and currently has agreements with about 475 carriers and distribution channels in over 160 countries. In April 2009, RIM launched BlackBerry App World, a virtual storefront that collects BlackBerry applications in one central location and developers keep 80% of what they charge for their programs.

With its disruptive Product offering and unique blend of service and hardware solution the number of units of Blackberry sold raised from 500,000 in 2002 to 47million in 2010 and 38 million units in 2011 till third quarter. As of October 2011, there were seventy million subscribers worldwide to BlackBerry. Read the rest

Case Study: Success of Amazon’s Kindle Fire

In 2007 Amazon introduced the first Kindle e-reader for $359, their first foray into selling a tangible product under their own brand. The media quickly named the product an e-reader, a limited use mobile device designed for downloading and storing content from online. Perpetuating a successful, yet deceptively simple business model, the Kindle e-reader made “online [book] shopping so easy and convenient,” customers could browse, download and read books, magazines and newspaper content, at the click of a button on the Kindle. The e-reader market perked up as Amazon offered an affordable price point of $9.99 for book downloads and blended it with an easy to read e-ink, glare free device along with a simple user interface and operating system. Kindle’s launch success became the catalyst that opened up the e-reader market for big box book retailers, Barnes and Noble and Borders bookstores who shortly followed with introductions of their own e-readers and content libraries. Barnes & Noble jumped into the market in 2010 with their product, the Nook. These e-readers had the ability to upload books, magazines and even some newspapers almost instantaneously, but they were not in fullcolor nor did they have email, video and word processing capabilities like tablets, such as the iPad, HP Touchpad and Samsung Galaxy. As more tablets came to market, some mused about whether Amazon, the successful e-tailer, could credibly compete in the tablet war. Jeff Bezos, Amazon’s founder and CEO seemed to think so. By early Fall 2011 Apple thought they had the tablet market all wrapped up for the upcoming holiday season with their popular iPad tablet posting record sales.… Read the rest

Case Study: Success of Starbucks Mobile Payment Application

Starbucks redefined highly competitive coffee shop business and successfully created an uncontested market by turning the simple coffee drinking experience into a way of life experience by drastically redefining the coffee shop environment by adding music, Wi-Fi, relaxed seating and luxurious interiors. Till Starbucks disrupted the traditional coffee shop market most of the focus was on the price, location and quality of coffee shops. Starbucks innovative value proposition includes wide variety of mostly coffee based menu along with other types of drinks that catered to wide range of audience who are willing to pay top buck for the luxurious and relaxed interiors that are perfect environment for socializing with friends and relax. Another important aspect that Starbucks focused was on the quality of customer service with an exclusive aim of maximum customer delight and they meticulously recruited and trained the best talent in the industry that has added huge value to their brand reputation. Starbucks successfully created an aspirational brand that created highly loyal and delighted customers who repeatedly come to Starbucks for the unique experience it is offering.

For years Starbucks has been successfully maintaining its dominant position in the coffee shop market despite the market becoming highly competitive with many players offering similar product and service offering of Starbucks. There has also been a rise in strong competition from fast food chains such as McDonalds and Dunkin Donuts that now offer premium coffee, which is threatening the market share of established players. In order to hold onto its competitive advantage and create new value proposition for its customers Starbucks has started to focus on the use of information technology, mobility and particularly social media.… Read the rest