Please ensure it is 9 pages double spaced. Please only use sources from websites and not books. Please ensure APA style and the references have the links to the websites. Please read the guidelines word document for Lenovo I attached and used this for the case analysis. Please have separate pieces/paragraphs of the paper for the following: Understanding of the problem, Identify the multiple causes of the problems raised, Identify alternative ways of solving problems, Evaluate the proposed alternatives in terms of their pros and cons, Choose one alternative or a combination of alternatives, and Explain the implementation plans, including contingency plans in case the proposed solution would not work out as expected.
Global Strategy at Lenovo Case Analysis
A global strategy is the master plan taken and pursued by businesses when planning to expand internationally. This means that a company targets to grow, maximize its bottom-line and competitive advantage across borders. Global strategies are beneficial in both monetary and non-monetary ways; however, a significant concern for many companies and their leadership while operating globally is the concession or tradeoff between local responsiveness and global integration. Global integration refers to the degree and ability of a company to use and sell similar products and methods across foreign markets. Local responsiveness is the degree and ability the same company has to customize and localize its products and processes to meet the needs and conditions of these foreign markets and countries (Bruton & Lumen, 2018).
This paper is divided into four main sections for the development of a comprehensive and in-depth evaluation of the global strategy at Lenovo. The first section identifies and summarizes the primary problem from the case study, which involves pressures in Lenovo’s integration-responsiveness framework. The second section outlines and explains the primary sources of the development of this problem at Lenovo, identifying the difficulties acquired from global integration and local responsiveness. The third section defines possible and alternative solutions to address the primary issue and solve it at the grass-root levels. The final section outlines operationalization or implementation, contingency plans at Lenovo to ensure the problems are discussed, and the global strategy in Lenovo is competitively achieved.
Summary of the Problem
According to the case study, Lenovo integrates a profitable integration-responsiveness framework; however, numerous pressures and challenges are present in the dire need to maintain global successes. Lenovo employs the ‘protect and attack’ strategy, a comprehensive strategy in the framework in its foreign markets and countries to acquire exceptional success and enhance continuous growth of the company in all location and geographic areas. Lenovo’s strategy has enabled successful internalization of the company in foreign markets, including maximizing its flexibility, acquisition of market and customer knowledge, and economies of scale through M&A. However, a primary challenge and pressure on Lenovo’s framework are seen in its global supply chain management, notably in the worldwide sourcing and the need to harbor different distribution channels. Lenovo sources its raw materials from multiple suppliers, which, according to the case study, enhances logistics flexibility. However, global sourcing is complicated, especially when having various suppliers, as it provides susceptibility to the company in terms of logistics, customs, regulations, protectionism, and capabilities (Fan, Zhu, & Nyland, 2012). Global sourcing from multiple suppliers means increased logistics pressures in transportation, management of delays, border procedures, and many extensive inventories, which can be challenging to manage efficiently. In addition, risks associated with global sourcing include differences in time, language/cultural barriers, the difference in quality expectations, scheduling of production, and compliance issues.
Secondly, in response to local responsiveness and operating in diverse foreign markets, Lenovo must accommodate or harbor different distribution channels. Distribution channels outline and describe how products reach end-users from the manufacturers. Lenovo must accommodate these diverse and distinct distribution channels because they vary and are unique among countries. Hence, pricing, promotion, and even product positioning need to change to accommodate local responsiveness and different country regulations and customs. Having varying distribution channels means increased pressures and integration management issues, seen in the logistics, customs, transportation, and warehousing. Different distribution channels require varying inventory management strategies, transportation and warehousing, which involves having many and different pricing and overall operation activities. This results in increased susceptibility in nonvalue adding activities, increased costs, duplication of functions, and ineffective management of operations in primary functions of the company.
Causes of Problems Identified
The identified problems in Lenovo, according to the case study, are experienced in the company’s supply chain management, notably in the global sourcing and the need to harbor different distribution channels. Causes of having multiple worldwide sourcing and distribution channels are related in ensuring local requirements and customer preferences are met. The success of global business in Lenovo is accompanied by maximized ‘glocal’ strategy, whereby both global and local responsiveness is combined. For instance, Lenovo standardizes its products, which means that all global markets are treated similarly with similar products and minimal variations. Standardization at Lenovo shows that people from all over the world can benefit from the same products, namely phones, tablets, and PCs, among others. At the same time (locally), Lenovo customizes the software and keyboards to meet the cultural and language barriers as well as catering for local customer needs. Hence, the need to cater to diverse customer needs, preferences, and merging human (universal) needs with local consumer trends causes the problem of needing different sourcing suppliers and distribution channels. Distribution channels are highly influenced by volatilization in aspects such as consumer needs, which vary depending on customers and geographies.
Lenovo’s global strategy shows an operation across cultural divides, which they must adjust to these cultural differences to ensure they do not affect their global operations and comprehensive supply chain management. Cultural differences and complexities profoundly affect the logistics and SCM, as operating globally for Lenovo mean susceptibility to different requirements. For instance, if taboos, history, customs, and laws are broken when sourcing raw materials and distributing products are broken in foreign markets, resistance among customers, wholesalers, and retailers may be experienced. This means the host consumers will halt any business activities with Lenovo creating barriers to the achievement of highly profitable results. Logistically, Lenovo must acknowledge and adjust to these cultural differences and complexities in all foreign geographic areas of operations through the adoption of different global sourcing partners and distribution channels to ensure localization of sourcing and distribution channels to meet customer needs and merging the universal needs with local consumer trends.
The identified problems are present in the company’s supply chain management, including global sourcing and accommodating different distribution channels. Many possible alternative solutions can correct and rectify these problems in Lenovo. In regards to global sourcing problems, Lenovo and its logistics teams can communicate and train its different and diverse suppliers on the company’s quality standards such as the quality-control methodology, safety standards, and conducting regular supplier audits for maximized compliance. Moreover, Lenovo can demand all its suppliers to integrate suppliers’ quality management systems to optimize the quality of supplies. Secondly, Lenovo can consolidate and rationalize its supply base for effective supply base management. As seen, the more the suppliers in Lenovo, the more complex and expensive is its supply chain. Hence, consolidation and rationalization of its supply base will mean minimizing its large number of suppliers while maintaining a high quality of supplies and minimizing costs. This alternative means cutting down the number of suppliers, with the remaining suppliers supplying more than regularly. Thirdly, Supplier Relationship Management (SRM) is another alternative solution for Lenovo, an approach essential for engagement of suppliers, strategic planning, management, and interaction with all suppliers of the company (Singh, Sharma, Samuel, & Verma, 2017). In addition, Lenovo can integrate an automated global sourcing system, which results in increased interconnectedness of its supply chain.
When evaluating the problems and pressures associated with having different distribution channels, Lenovo can employ an online, drop shipping approach in setting up global distribution in all foreign markets. Secondly, Lenovo can work with distributors such as export management companies and consultants in international geographies of operations. Such distributors have increased expertise and experience in the shipping of products fast and efficiently, as they know the countries’ procedures. Thirdly, the automation of the processes in its supply chain management can help in the speedy and efficient management of the distribution of products to all customers.
Evaluation of the Proposed Solutions
Each solution identified possesses advantages and disadvantages. Primarily, communicating and training suppliers on the company’s quality and compliance standards will maximize the quality of supplies and raw materials provided among all suppliers, increased and maintained quality of products thus becomes a valuable asset for the company’s products. Moreover, it will ensure all suppliers are on the same page with the corporate MVGOs, (Mission, Vision, Goals, and Objectives) in regards to the scheduling of products, increased compliance, quality expectations, and business models. Having many suppliers coordinated improves corporate processes, productivity, and performance. On the negative side, training all these suppliers will be time consuming and expensive, as it includes bringing suppliers from all over the globe.
Consolidating and rationalizing the company’s supply base for effective supply base management forms one of the most effective solutions. Advantages of this solution are the decreased supplier and global outsourcing related costs, as it becomes easy to manage fewer suppliers. Secondly, with fewer suppliers, Lenovo can purchase raw materials on bulks and more regularly, hence reducing purchase price and maximizing economies of scale. As outlined above, the more the suppliers in Lenovo, the more complex supplier relationships and expensive is its supply chain. This solution will enable effective management of fewer supply relationships with decreased management time and effort. It becomes easier to manage a smaller number of suppliers even financially, which maximizes chances to improve processes in the company and the supply chain. On the negative side, minimizing the suppliers will mean getting rid of suppliers that quickly effect the ‘glocal’ strategy. Some suppliers may be cut off, yet they provided some products smoothly and efficiently that it would be accomplished after the consolidation and rationalization of the supply base.
Integrating a collaborative Supplier Relationship Management approach will increase efficiency, enable costs savings, and facilitate continuous improvement of processes and business model. More importantly, the SRM provides an opportunity for Lenovo to focus on suppliers, making them more accessible, engaged, and productive. However, SRM may increase complacency due to increased familiarity and create exit barriers such as switching to new suppliers due to the long-term relationship created. Automation of the company’s supply chain including adopting online, drop-shipping approaches will increase efficiency, due to speedy operations, enable costs savings in warehousing; inventory management, and facilitate continuous improvement of processes and business model through improved integration of processes. Drawbacks of drop shipping will include increased difficulties in scaling up and maintaining cordial relationships (Thatcher, 2016). An all-powered supply chain in the distribution and supplier management may be ineffective due to security problems such as information hacking, skills gap can result in reduced productivity and performance, and a single mistake can jeopardize all distribution and sourcing functions and activities.
Chosen Alternative Solution
The chosen alternative solutions for adequate solving of the problem Lenovo faces are automating the global sourcing system, employing an online drop shipping approach, and integrating a coordinated and effective Supplier Relationship Management. These solutions revolve around increased automation; digitalization of the company’s sourcing, building effective relationships with suppliers and distribution functions. They address the problems to the root core. The automation of operations in the company will maximize the coordination of functions and integration of information or data sharing among employees, departments, and suppliers. More importantly, automation will improve supply chain activities through enhanced efficiency, speedy operations, easy management of suppliers, and coordination of the different distribution channels. Using the online drop shipping approach will be beneficial in risk pooling, as they will not have to worry about inventory movements and management, as drop shippers will handle the risks. Drop shipping becomes an essential portable part of Lenovo’s distribution networks. Besides, operating virtually will become easy to penetrate and distribute products to customers, without worrying about many customs, transportation, storage, and logistics costs and issues.
Implementation and Contingency Plans
The operationalization and implementation plan of the chosen combination of solutions will involve five crucial steps. The first step will include defining objectives, goals, contingencies, and key success variables that Lenovo wishes to accomplish while integrating the identified solution. Primary goals and objectives include improving Lenovo’s operations and effectiveness in the global sourcing and integrating the different distribution channels through automating the global sourcing system, employing an online drop shipping approach, and incorporating a coordinated and effective Supplier Relationship Management. The second step will involve allocating both human and nonhuman resources, including physical, educational, financial, and technological. Through the project’s charter and scope, resource allocation will be conducted easily as all tasks and milestones are defined. The third step will involve identifying and scheduling tasks and milestones necessary for having a successful project. Tasks and milestones crucial for the operationalization of the solutions include designing the SCM software, optimizing the corporate website to accommodate and enable drop-shipping service. In addition to creating a global sourcing management system, installing these systems into Lenovo’s operations and functions, and finally training and educating both employees and suppliers on the utilization and integration of the systems.
Each of these tasks and milestones will take different time and effort; thus, a definitive timeline will be developed. The plan will take 7 months to complete, beginning in September 2020 and ending February 2021. Below is an illustration of the timeline and scheduling of tasks.
|September 2020||Defining objectives, goals, contingencies, and key success variables
Reviewing the charter and scope of the plan
|September 21 2020||Allocating resources|
|October 1 2020||Defining and scheduling tasks and milestones|
|October 7 2020||Designing the SCM software
Optimizing the corporate website to accommodate and enable drop shipping services
Designing a global sourcing management system
|December 7 2020||Installation of these systems into Lenovo’s operations and functions
UAT testing plans Invalid source specified.
|February 8 2020||Training and educating both employees and suppliers on the utilization and integration of the systems.|
|February 29 2021||Project end|
The fourth step will include designating the responsible team members and their responsibilities, which will be conducted using the RACI (Responsible, Accountable, Consultation, and Informative) tool.
It will be supplemented by a communication plan identifying the sender, message, means, and reporting dates to maximize efficiency in the implementation of the solution. Finally, the actual installation of the systems and software will be conducted, followed by extensive communication, education, and training of suppliers and employees on the changes for effective change management.
The developed contingency plan will include constant monitoring, evaluation, analyzation of the solutions implemented to identify possible achievements, successes, and mostly risks, where they will be prioritized, and mitigation strategies developed. Below is an illustration that will enable effective application of the contingency plan.
According to the case study, Lenovo faced pressures in its integration-responsiveness framework, including its global supply chain management, notably in the worldwide sourcing and the need to harbor different distribution channels. Primary causes of these problems include different local requirements and customer preferences, the need to cater to diverse customer needs, preferences, and merging human (universal) needs with local consumer trends, and the need to adjust to cultural differences. The identified alternative solutions for the problems identified in Lenovo include communicate and train its different and diverse suppliers on the company’s quality and compliance standards, consolidate and rationalize its supply base for effective supply base management, integrate effective Supplier Relationship Management, and integrate an automated global sourcing system. Moreover, Lenovo can employ an online, drop shipping approach; can work with distributors such as export management companies and consultants in foreign geographies of operations, and can automate its supply chain management functions. The implementation plan will include defining objectives, goals, contingencies, and key success variables; allocating both human and nonhuman resources; defining and scheduling tasks and milestones; include designating the responsible team members and their responsibilities using the RACI chart; the actual installation of the systems and software, and training suppliers and employees.
Bruton, J., & Lumen, L. (2018). Global Business Strategies for Responding to Cultural Differences. Retrieved from Lumen: Principles of Management: https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/responding-to-cultural-differences/
Fan, D., Zhu, C. J., & Nyland, C. (2012). Perceived Factors Affecting the Integration-Responsiveness Framework: An Analysis from Chinese Multinationals Operating in Australia. International Journal of Business and Management, Vol 7(13), pp; 1-20. doi:10.5539/ijbm.v7n13p1.
Singh, P. K., Sharma, S. K., Samuel, C., & Verma, S. (2017). Supplier Relationship Management and Selection Strategies – A Literature Review. International Conference on Industrial Engineering, https://www.researchgate.net/publication/322068731_Supplier_Relationship_Management_and_Selection_Strategies_-_A_Literature_Review.
Thatcher, J. (2016, September 26). Thinking Supply Chain. Retrieved from https://www.apics.org/sites/apics-blog/thinking-supply-chain-topic-search-result/thinking-supply-chain/2016/09/22/drop-shipping-and-digital-supply-chains
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