Lenovo and Dells channel dispute.docVIP

 PAGE \* MERGEFORMAT 12 Lenovo and Dell’s channel dispute China’s IT industry’s leading companies - Lenovo Group - in the past three years, suffered a ‘Growing Pains’, according to Lenovo’s three-year plan to 2003, the business scale to reach 600 billion, while the reality is that only 200 billion yuan, sales grew 26%, profit growth of 50%. Although this growth rate is higher than the industry the vast majority of businesses, but was unable to reach the goals set in 2000 planning. At the same time in 2003, Lenovo’s main business PC sales increase was only 16.4%, while Dell’s rose by more than 40%, more than double the growth rate beyond the association. Lenovo on how to resist the impact of Dell’s direct sales channel, is placed in front of a big topic Lenovo. 1. Lenovo’s growth in four levels of the channel Lenovo’s channel after 10 years of sustained efforts to reach the current size and quality. 10 past few years, Lenovo has not stopped improving channel, almost every year there are some small improvements, every 3-5 years there will be a big improvement. Lenovo’s growth in the history of channels can be expressed in following diagram: ① . Before 1994, Lenovo channel in the first level, the channel capacity is only a simple distribution and reimbursement, for the final product flows almost no understanding of the demand characteristics of consumers lack of assurance, the channel is extensive, low-function of the primaryState . ② . In 1994 -1998, the Lenovo channel to reach the second level. At this stage, Lenovo give up direct marketing, transfer of attention to distribution. To ‘big think’ concept, and constantly optimize the channel structure, dedicated channels, flat and close associations with the business ties between dealers and mutually beneficial relations, the formation of ‘communities of interest’, and avoid vicious channel conflict. During this period, due to PC market capacity at an average annual growth rate of 40-50%, the external situatio