Pestle Analysis Of Lenovo

PESTEL analysis

Lenovo is based in China and has a manufacturing unit in China and its major products are supplied from China market, hence look at the PESTLE analysis of China’s electronic industry.

Political factors:

From 1970, China government committed to provide stable political environment to drive the development of economy. From then there is a political stability in China and it opened the door for international market. After joining WTO, China given relief in restriction and helped many industries to grow. China government also supports a lot to local manufacturer to grow compare to foreign companies, which is an advantage to Lenovo.

Economic factors:

Economy of China is growing very rapidly and it is considered as one of the

China is basically known for their electronic goods and growing penetration of internet users helping it much broader way. High demand of electrical goods locally and internationally will definitely going to help China to grow further and maintain it.

Technological factors:

There is a huge demand for the Chinese electrical products worldwide due to low cost. Though there is a question on quality of product, but people still attract towards cost of margin between Chinese product and other competitor products. Because of low cost Chinese raw material, other manufacturer can able to reduce cost of their products. Even because of cheap Chinese electronics goods, globally people from developing and poor countries are able to afford the smartphones and other electronic goods.

Legal factors:

Legal factors impact a lot in electronics goods and services due to patent rights and licenses. Every company would like to match or overpower the competitor products and hence, it has become necessary to build a good legal system to protect every manufacturer’s rights. Though law and regulations are not strong enough in China compare to other developed countries but Chinese government understood the importance of the good legal system for development and started implementing the

Every manufacturing unit has to obtain certain environmental clearance and yearly certification to manage the manufacturing unit. Even company management is taking interest in greenhouse and carbon emissions, which can be considered as CSR and to increase shareholder wealth.

Lenovo PC Market share

As we all know Lenovo is number one in PC manufacturing, let’s look at the diagram 1 which explains its PC share in 4 geographical area i.e. China (PRC), America (AG), Europe Middle East Africa (EMEA) and Asia Pacific (AP). Out of this you can notice that Lenovo has a strong base in its home country China, after which PC sale is considered high in EMEA, but if you notice carefully PC business in EMEA has grown very high compare to other geographical region. It shows the increasing demand for Lenovo in EMEA market.

Now let’s look at the competitor’s shares in worldwide PC market (refer diagram 2). Lenovo is leading at 20% market share followed by HP (18%) and Dell (14%). But Lenovo need to work hard in America market as it is still far behind from Dell and HP (refer diagram