When you think of some of the biggest technology companies that manufacture mobiles, computers, laptops, and other gadgets, what company pops up in your head?
You must be thinking of Lenovo since it is one of those few companies that manufacture many different gadgets.
Lenovo is one of the most renowned technology companies. It is a Chinese company, but its operations have spread across the globe over the years.
Due to the vast operations and its excellent reputation, today we have decided to conduct the PESTLE analysis of Lenovo, having already conducted the SWOT analysis of Lenovo.
Before proceeding further and conducting the PESTLE analysis of the tech company, let’s look at the history and current operations.
Lenovo was founded in 1984 in Beijing, China. The initial objective of the company was to distribute computer equipment. After Lenovo started operating in the market, it decided to manufacture computers in 1990.
By 1992, Lenovo became the market leader in the computer market of China. The company then decided to go public on the Hong Kong stock exchange.
The tech company has grown since it became China’s most famous tech company. Lenovo adopted the latest technologies and hired skilled labor, so it launched its Thinkpad X41 Tablet in 2005, a hybrid laptop-tablet device.
This device was ahead of its time. It gained massive popularity among the masses, and the company grew further.
In 2006, Lenovo became the third-largest PC manufacturing company worldwide, according to the market share.
In 2008, the tech company launched the IdeaPad series of laptops and a series of ThinkCentre desktops. Consumers loved both series due to their advanced features.
In 2011, Lenovo diversified its portfolio and entered the smartphone market. Lenovo launched its first smartphone called the LePhone. A lot of people bought the smartphone made by Lenovo.
Later, Lenovo acquired Motorola Mobility from Google to further expand its operations in the smartphone market. In 2014, Lenovo became the largest PC manufacturer in the world, according to Marketshare.
In the coming years, Lenovo will introduce more technologically advanced smartphones, which consumers love.
In 2016, Lenovo formed a subsidiary, Lenovo Capital, to invest in tech startups. Lenovo Capital invested in several new tech startups and helped them grow.
In 2018, Lenovo’s smart speaker with a built-in display shook up the market. It had Google assistance, which made it cooler!
In 2021, the tech company introduced the world’s first foldable PC. Lenovo constantly innovates and uses the latest technologies to enhance the user experience.
Lenovo currently operates in more than 60 countries. However, It further plans to expand its operations in more countries.
Now that we have discussed the operations of Lenovo enough let’s proceed further and discuss how different external factors impact the operations of Lenovo.
Before proceeding to Lenovo’s PESTLE analysis, we must first discuss what PESTLE analysis is. PESTLE analysis is a tool different businesses use to examine how various political, environmental, social, technological, legal, and economic factors impact a company.
Now that we have informed our readers about the PESTLE analysis, let’s proceed and discuss how different political factors impact Lenovo.
Political factors are the factors that are associated with internal or international politics and the political environment. Let’s take a look at how different political factors impact Lenovo.
Lenovo is an international brand. The tech company exports its products across the globe. Lenovo is greatly impacted by the trade policy of China.
For example, If the Chinese government decides to limit its exports, Lenovo will suffer since it exports its products worldwide.
Moreover, Lenovo imports inputs to manufacture its products. Suppose the Chinese government imposes an import ban or a high import tariff. In that case, Lenovo will suffer since it won’t be able to import its inputs.
Other than that, tax policies impact Lenovo significantly. If China’s government imposes high tax rates on the manufacturing industry, Lenovo will have to pay more tax. As a result, the profit of Lenovo will fall, and the tech company will suffer financially.
On the other hand, If the government decides to support the manufacturing industry by providing electricity at low rates to the manufacturing industry, the operational costs of Lenovo will fall, and the company’s profits will increase.
Besides that, political tension between China and the USA also impacts Lenovo. The USA might ban the products of Lenovo since it is a Chinese brand due to the political turmoil. This will damage Lenovo since it will lose its market in the USA.
Economic factors are related to the economy of a country. In this section, we will look at how different economic factors will affect Lenovo.
All businesses grow when people have money in their pockets to spend on the products offered by these businesses.
Similarly, economic prosperity favors Lenovo because in the eras of economic prosperity, people’s living standards improve, and they have more money to spend. Hence, during periods of economic prosperity, the demand for the products of Lenovo rises.
Other than that, inflation impacts Lenovo significantly. Suppose there is a high rate of inflation in the economy. In that case, all the essential commodities would be very expensive. In such an economy, people will save money to buy essential commodities instead of gadgets made by Lenovo.
On the contrary, during periods of low inflation, people would have excess money to spend on Lenovo. Furthermore, interest rates also have an impact on Lenovo.
Whenever the interest rates are high, the borrowing cost increases. However, during periods of low interest rates, borrowing cost falls. Like any other business, Lenovo prefers low interest rates in the economy to borrow at low rates.
Besides that, exchange rates also affect Lenovo. Since Lenovo sells its products all over the globe, the fluctuation in exchange rates causes the prices of the products of Lenovo to fluctuate internationally.
This section in the PESTLE analysis highlights the social and cultural factors that impact the operations of Lenovo. In this section, we will examine how different social factors affect Lenovo.
Lenovo is greatly impacted by the average of people in society. For example, say there are two societies. In one society, the average age of people is 30. While in the other, the average age of people is 50. The sales of Lenovo in both societies will vary.
In a society where the majority of people are young, the demand for the products of Lenovo would be high.
Besides that, different countries’ religious values and practices also impact Lenovo. In some countries, women appearing in advertisements are considered taboo.
In such societies, Lenovo has to be careful with its marketing campaigns and ensure it advertises its products in a way that doesn’t violate society’s moral or religious boundaries.
Moreover, Lenovo’s specialty has always been computers. However, if the trend changes and people abandon computers and laptops, the tech company will suffer great economic losses.
Recently, after COVID, the trend of work-from-home has increased. Due to this, the demand for laptops and computers has increased significantly. Such trends have a positive impact on the sales of Lenovo.
Rapid technological advancements are taking place globally.
Lenovo must adapt to the latest technologies to stay ahead of its competitors. For example, the tech company can use Artificial Intelligence to automate its operations and improve its customer service.
Moreover, Lenovo can rely on data analytics to identify its customer base. According to the results of data analysis, the brand can then make well-informed decisions. Furthermore, data analysis can help identify trends and customers’ tastes.
Besides, as technological advancements have occurred, marketing mediums have changed completely. Earlier businesses used to advertise their products through newspapers, TV, and radio.
However, these mediums have been replaced by social media platforms. Now, businesses market their products on Facebook, TikTok, Instagram, etc. Lenovo should also adopt the latest marketing techniques to increase its customer base.
Other than that, technological innovations have also replaced conventional brick-and-mortar stores. Now, consumers can purchase any product they want online through E-commerce.
Lenovo can also use E-commerce in its favor. It can also sell its products online. This can increase the reach and sales of Lenovo.
Legal factors are the factors that are linked with the legal framework and the laws of the country. In this section, we will discuss what legal factors affect the operations of Lenovo.
Lenovo is a multinational brand. Lenovo must abide by the laws of every country where it operates. One of the laws that greatly impact Lenovo is the law against the theft of intellectual property.
This law protects Lenovo since it prohibits any other manufacturer from copying Lenovo’s design. However, Lenovo also has to be careful and ensure that none of its designs are similar to any other manufacturer; otherwise, Lenovo might end up paying penalties for intellectual theft.
Moreover, Lenovo is also affected by labor laws. According to the labor laws, Lenovo has to ensure that the employees of Lenovo are not facing any kind of discrimination and they are getting their complete rights.
If Lenovo fails to protect the rights of its laborers, the company will have to pay heavy fines, and it might get banned, too.
Besides the labor laws, Lenovo must also take care of its customers’ data. After the recent data breaches, governments are monitoring businesses very closely.
If Lenovo loses its customers’ data or the data gets leaked, the tech company will be punished under data protection laws and will have to pay a heavy price.
Environmental factors are the factors that are related to the natural environment. This is the last section of the PESTLE analysis. In this section, we will discuss how different environmental factors will impact the operations of Lenovo.
Lenovo manufactures products that are often functional when connected to the internet. However, as the frequency of natural calamities is increasing, there is often disruption of the internet, which can make it difficult for users of Lenovo to use their products.
Other than that, road blockages are very common due to natural calamities. Due to these blockages, the supply chain of Lenovo gets disrupted, and the inputs get delayed.
Furthermore, natural calamities can also cause damage to the stores and manufacturing facilities of Lenvo. For example, If the water enters the stores or the manufacturing facility of Lenvo in case of a flood, Lenovo will have to incur heavy damages financially.
Besides that, Lenovo is often held responsible for causing pollution. Lenovo packs its products in plastic, which is a non-biodegradable material. Lenovo has to change its packaging and shift to more eco-friendly packaging, or it might face lawsuits for damaging the environment.
Lenovo is one of the world’s most renowned tech companies. Lenovo got established in 1984 in China. Initially, the company aimed to distribute computers. Later, the company started manufacturing computers itself.
Everyone loved computers made by Lenovo, and soon Lenovo became the biggest manufacturer of computers in China. After that, the company decided to open its stores in other parts of the world.
People across the globe were impressed by Lenovo’s products, and soon it became the third-largest PC manufacturer according to market share. Over the years, Lenovo diversified its product portfolio and started manufacturing laptops, smartphones, speakers, etc.
Looking at the success of Lenovo, we decided to conduct the PESTLE analysis of Lenovo to see how different external factors impact the operations of Lenovo.
We examined how various external factors impacted Lenovo through the PESTLE analysis framework. If you enjoyed reading this article and want to know more about the PESTLE analysis technique, then look at one of its examples.