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Lenovo's Integrated Distribution Channels, Whether the Solution of Bureau of Mystery? In the mainland market of China, dealing with the relationship between the dealers has always been a great headache for manufacturers. Lenovo has made a great effort to balance the relationship between dealers and manufacturers. As early as in 1994, Lenovo set up the first China's PC industry, forming a distribution system. Those ass ociations and channel partners were of relatively simple trading relationship, and basically , there was not much shared information between pairs of these two channels. This phase is called the traditional distribution phase, also known as agent distribution stage. In 1998, the big think idea was put forward. Lenovo's channel partners were defined as long-term business partners, and partners were encouraged to participate in the product line, training system, distribution system, service system, etc. This phase was called the close distribution, and the most important feature of it was that there was much information shared between channels. Lenovo was not only a direct agent in' the transactions, but also began to exchange information with the distributors. Lenovo began to understand customers' needs more precisely. At the same time, Lenovo began to provide technical, training and marketing support for direct distributors at all levels. Since 2002, along with the technical transformation of Lenovo, Lenovo has continued to deepen its cooperation between distributors. In 2004, Lenovo proposed the concept of integrated distribution model, which is a customer orientation strategy. Integrated distribution model can also be viewed as an integrated distribution model of the prototype, although this stage is still dominated by distribution. May 18, 2005, to gain the support of more partners in urban and rural market and to achieve its PC market dream in the new fiscal year, Lenovo introduced an integrated distribution channel. However, Lenovo's channel change, and its new channel model, left the market a bit of suspense. Case Analysis According to Lenovo's official statement, in the integrated distribution model, roles of partners will be clearer and they will work with Lenovo in the client-oriented design. And a closer strategic partnership in information sharing and integration of operations between Lenovo and its partners will be formed. Lenovo claims there are four main features in the integrated distribution model: an integrated setting, customer guidance, the professional division of labor and collaboration. Small and medium customers can buy Lenovo products through the chain retailers, distributors, franchisees and other services, and for large customers they can buy the products through the dealers and customer service agents. Although there are some potential disadvantages behind the integrated distribution as some analysts pointed out, there are sti l l many points worth noting: First of all, the integrated distribution holds the sales philosophy called "store marketing" or “ store is the king ”. It stresses the importance of terminal channels. Especially in the development of new markets, more attention should be paid on channels, the terminal building. Then it put forward the strategies of optimizing the channel, the channel proposed to go professional development. The fast and widespread distribution system makes Lenovo reach even the remotest cities of China possible. Lenovo has a chain of stores to promote and sell Lenovo computer and is using retailers to increase their presence and reach their customers. Second, the integrated distribution channel will strengthen the cooperation between distributor and manufacturers. Although there was competition among distributors , Lenovo nurtured a positive relationship with its distributors , many of which had grown with Lenovo over the years. In the mid - 199 0 s, for example, Lenovo established the rule that its own regional sub units would not sell PCs, but would only provide information and material flow service to distributors and resellers. Such policies and practices engendered greater loyalty among its distributors than those of other manufacturers, foreign or domestic. Even as Lenovo increased the depth and breadth of its distribution channels, it never had equity interests in its distributors. Third, to some extent, the integrated distribution channel reduces manufacturers' reliance on the channel and increases their ability to make a quick response to the changing market information. According to the integrated distribution model, whether it is to serve major clients, or to serve small and medium customers, the integrated distribution channel can reduce the channel length to a large extent, strengthening Lenovo's ability to control the channel and to respond to the market. However, the efficiency of Lenovo's integrated distribution channel cannot be judged. After all, the ultimate test of the model is the market, rather than the model itself.