[photopress:lenovopcs.jpg,full,alignright]And, what, pray is a transaction model? Lenovo divides its sales system into two models: relationship and transaction.
- The relationship model mainly targets large commercial customers wanting tailored solutions, fast delivery and quick responses to service demands.
- The transaction model is suitable for small and medium businesses as well as consumers, where large distribution, service and aggressive pricing are paramount.
Deepak Advani, senior vice-president and chief marketing officer of Lenovo, said, ‘To go after the market growth we do not only need the right products, but we should also have the transaction model in place.’
Last week Lenovo’s top executives, including its chairman, CEO and Advani, met in Paris to review the use of the transaction model in the test market of Germany. It proved to be ‘very successful,’ with significantly higher growth over the past few months. The German market is a pilot for Lenovo’s strategy in mature markets, so success there will mean faster adoption of the transaction model.
In the second quarter Lenovo’s shipments of computers rose by 12 percent year-on-year, but it was mainly driven by growth of almost 30 percent in China.
In Europe Lenovo’s shipments fell by 12 percent and in the United States its growth was 5.3 percent, below the industry average of 6.7 percent, according to research company International Data Corp (IDC). Deepak Advani said the major factor behind this was that Lenovo does not have a strong presence in the fast-growing small and medium business and consumer markets of Europe and the United States.
IDC predicts the worldwide growth rate of PCs in the consumer segment will be 12.6 percent this year, while the commercial sector is expected to grow 9.3 percent. In the US market it is 8.5 percent versus 4.9 percent. Thus, one of Lenovo’s key strategies to revive its international business is the duplication of its transaction model.
Source: China Daily