Rank 8: Too early to discount as a performer- Lenovo

Lenovo, or Lenovo Mobility Business Group (MBG) to be precise, went on an offline expansion last fiscal. The expansion was an extra effort on the part of the brand, which did not yield the desired results. While the thinking behind the expansion was to increase the points of sale that would eventually lead to increase in sales, it appeared this wasn’t the main cause of the brand doing less than its potential.

Lenovo MBG has not been able to decide the right positioning mix between Lenovo and Motorola as two distinct brands. Among the two, Motorola is still a performer compared to dismal performance of Lenovo in Smartphones after some early successes.

Motorola is a very mature brand and it was always used by people who would understand the technology. Had its strengths been appropriately utilised, it could have posted a similar success as OnePlus resulted out of nowhere. Motorola totally lost its proposition after getting into the reigns of Lenovo.

The consumers earlier had formed an opinion that Lenovo would be for entry level and Motorola for the premium segment. This positioning was also in line with the strengths of the brands. However, after witnessing downfall of Lenovo in Smartphone market, the company decided to coverup banking upon Motorola equity. This not only did not succeed, but also, backfired as Motorola was tried out in lower mid-range of Smartphones, where it had performance issues; in other words did not stand upto expectations as consumers would have from Motorola.

Lenovo has not been able to capitalise the equity that Motorola as a brand enjoyed in the market. Had this been implemented correctly, today Lenovo MBG would have been a strong performer in the mid-premium segment through Motorola and its Lenovo brand could have excelled in the entry level. This would have made the brand a strong contender for 3rd largest Smartphone maker in India. For a moment, it did earn this rank, but it was very short lived and could not withstand the fury of Vivo and Oppo, in particular.

There were also industry rumours about Lenovo contemplating divesting out of mobility business, but perhaps, close to Rs 10,000 crore revenue from India alone, would have motivated them to stay and attempt to recover.

Lenovo MBG has to clearly decide about how to take the two brands – Lenovo and Motorola together. There are still clues in the legacy of the two brands that could be capitalised to decide their future course. Motorola offering has to be superior than Lenovo and it has to be targeted at the tech savvy consumers. If implemented correctly, Motorola could bounce back and be a strong competitor even to the likes of OnePlus, which is undisputed leader in its category.

Lenovo on the other side, has to continue its focus on the entry level, but with better product portfolio. It cannot operate without looking at what competition is offering in terms of specifications as well as performance even at these price levels.

Strategically, for the group, it is important that the mobility business is revived and rejoiced. It is still one of the traditional hardware companies, as the global trend is moving towards becoming a solutions company. If it wants to be a hardware only company, the Smartphone proposition has to be very compelling that could let it remain a very strong player in the game. Else, it’s going to see the same fate as has happened with some of the leading hardware only brands, which are defunct or almost out of vision of the customers.