anjalicutek
Anjali Khurana
Lenovo Group Limited (SEHK: 0992, OTCBB: LNVGY) is a Chinese-based multinational computer technology corporation that develops, manufactures and markets desktops and notebook personal computers, workstations, servers, storage drives, IT management software, and related services. Incorporated as Legend in Hong Kong in 1988,[5] Lenovo's principal operations are currently located in Beijing, China, Morrisville, North Carolina in the United States, and Singapore, with research centers in those locations, as well as Shanghai, Shenzhen, Xiamen, and Chengdu in China, and Yamato in Kanagawa Prefecture, Japan.[6]
Lenovo acquired the former IBM PC Company Division, which marketed the ThinkPad line of notebook PCs, in 2005 for approximately $1.75 billion.
In 2009, Lenovo was the fourth largest vendor of personal computers in the world.[7] The company is the largest seller of PCs in China, with a 28.6% share of the China market, according to research firm IDC in July, 2009. It reported annual sales of $14.9 billion for the fiscal year ending 2008/2009 (ending March 31, 2009).
Lenovo markets its products directly to consumers, small to medium size businesses, and large enterprises, as well as through online sales, company-owned stores (in China only), chain retailers, and major technology distributors and vendors.
On September 4, 2009, Oceanwide Holdings Group, a private investment firm based in Beijing, bought 29% of Legend Holdings, the parent company of Lenovo, for 2.76 billion yuan ($404.1 million).[8] Legend Holdings is the asset management unit of the Chinese Academy of Sciences.
On November 27, 2009, Lenovo Group announced its intention to purchase Lenovo Mobile Communication Technology. Lenovo Mobile now ranks No.3 in China’s mobile handset market.
Prior to its headline-grabbing acquisition of IBM's personal computer division in 2005, Lenovo was little known outside of China. Today, Lenovo is well known both in the global technology industry and by millions of PC buyers worldwide.
When the IBM deal was announced, many observers doubted whether Lenovo had the abilities or resources needed restore Big Blue's struggling PC unit to anything close to its former glory. For two years, it seemed like the critics were right, as the organisation continued on what appeared to be a slide into oblivion. Then, last month, something happened that confounded the deal's critics - Lenovo announced its best results since the IBM acquisition. The company reported a record gross profit margin of 15.2% in the quarter that ended in March and pre-tax income of US$66m.
It's tempting to look at these figures and state that Lenovo has turned the corner and is now well on its way towards restoring the glory of the former IBM PC division. But that's not the case. The company's earnings announcement is certainly newsworthy, but it remains an open question as to whether the results are an important milestone in the company's history or a minor blip.
Lost in transition?
The reasons for this are fairly straightforward. First, Lenovo has yet to make a serious run on PC market leaders Hewlett-Packard (US), Dell (US), Acer (Taiwan) and Toshiba (Japan). While the Chinese company managed to nudge its global PC market share from 5% in 2005 to 6.9% in this year's first quarter, it will have to make a big push to catch up with HP and its 20.5% market share.
In part, Lenovo has yet to catch up with its bigger rivals because it remains a company in transition. Within the next year or so, the Big Blue label will all but disappear from its products, eliminating Lenovo's association (at least in consumers' minds) with one of the world's most famous and highly-regarded computer manufacturer. The loss of the IBM label means Lenovo will have to step up its rebranding process to establish its name in the public mindset and disassociate itself from competing Chinese computer manufacturers and their mostly low-end, poorly-manufactured machines.
With this in mind, Lenovo recently held a two-day event in Beijing, dubbed "Lenovo Connections 2007," showcasing the company's strategy to become a top-tier computer vendor in its own right. Using the phrase "the best engineered PC" as its motto, the event aimed to highlight Lenovo's commitment to building machines that are both durable and easy to use. As an example of its new emphasis, Lenovo showcased its new notebooks, including one which featured a special "roll cage" that's designed to protect the system from vibration and shock.
Another key part of Lenovo's marketing strategy is sporting event sponsorship. After testing the waters with its sponsorship of the 2006 Winter Olympics in Turin, Italy, the company is now preparing to play a high profile role in the 2008 Beijing Olympics. To target buyers in the key North American market, Lenovo has aligned itself with the National Basketball Association (NBA) to become the league's "official PC partner." In Europe, the company has signed on as a sponsor of the Williams Formula One racing team.
Ready to retail
Lenovo inherited a strong presence in the corporate PC market from IBM, which over the past two years it has managed to maintain. But the company's increased focus on quality, innovation and sport sponsorships shows that it's now aiming to make a bigger push into the mass merchant and dealer channel. This makes sense, but it won't be easy. Not a single Chinese manufacturer has managed to crack the global consumer consciousness with a brand name to rival the likes of Dell or HP. If Lenovo wants to grab market share, it will need more than sharp engineering and a low cost base – it will also need to become an expert on marketing as well
Lenovo acquired the former IBM PC Company Division, which marketed the ThinkPad line of notebook PCs, in 2005 for approximately $1.75 billion.
In 2009, Lenovo was the fourth largest vendor of personal computers in the world.[7] The company is the largest seller of PCs in China, with a 28.6% share of the China market, according to research firm IDC in July, 2009. It reported annual sales of $14.9 billion for the fiscal year ending 2008/2009 (ending March 31, 2009).
Lenovo markets its products directly to consumers, small to medium size businesses, and large enterprises, as well as through online sales, company-owned stores (in China only), chain retailers, and major technology distributors and vendors.
On September 4, 2009, Oceanwide Holdings Group, a private investment firm based in Beijing, bought 29% of Legend Holdings, the parent company of Lenovo, for 2.76 billion yuan ($404.1 million).[8] Legend Holdings is the asset management unit of the Chinese Academy of Sciences.
On November 27, 2009, Lenovo Group announced its intention to purchase Lenovo Mobile Communication Technology. Lenovo Mobile now ranks No.3 in China’s mobile handset market.
Prior to its headline-grabbing acquisition of IBM's personal computer division in 2005, Lenovo was little known outside of China. Today, Lenovo is well known both in the global technology industry and by millions of PC buyers worldwide.
When the IBM deal was announced, many observers doubted whether Lenovo had the abilities or resources needed restore Big Blue's struggling PC unit to anything close to its former glory. For two years, it seemed like the critics were right, as the organisation continued on what appeared to be a slide into oblivion. Then, last month, something happened that confounded the deal's critics - Lenovo announced its best results since the IBM acquisition. The company reported a record gross profit margin of 15.2% in the quarter that ended in March and pre-tax income of US$66m.
It's tempting to look at these figures and state that Lenovo has turned the corner and is now well on its way towards restoring the glory of the former IBM PC division. But that's not the case. The company's earnings announcement is certainly newsworthy, but it remains an open question as to whether the results are an important milestone in the company's history or a minor blip.
Lost in transition?
The reasons for this are fairly straightforward. First, Lenovo has yet to make a serious run on PC market leaders Hewlett-Packard (US), Dell (US), Acer (Taiwan) and Toshiba (Japan). While the Chinese company managed to nudge its global PC market share from 5% in 2005 to 6.9% in this year's first quarter, it will have to make a big push to catch up with HP and its 20.5% market share.
In part, Lenovo has yet to catch up with its bigger rivals because it remains a company in transition. Within the next year or so, the Big Blue label will all but disappear from its products, eliminating Lenovo's association (at least in consumers' minds) with one of the world's most famous and highly-regarded computer manufacturer. The loss of the IBM label means Lenovo will have to step up its rebranding process to establish its name in the public mindset and disassociate itself from competing Chinese computer manufacturers and their mostly low-end, poorly-manufactured machines.
With this in mind, Lenovo recently held a two-day event in Beijing, dubbed "Lenovo Connections 2007," showcasing the company's strategy to become a top-tier computer vendor in its own right. Using the phrase "the best engineered PC" as its motto, the event aimed to highlight Lenovo's commitment to building machines that are both durable and easy to use. As an example of its new emphasis, Lenovo showcased its new notebooks, including one which featured a special "roll cage" that's designed to protect the system from vibration and shock.
Another key part of Lenovo's marketing strategy is sporting event sponsorship. After testing the waters with its sponsorship of the 2006 Winter Olympics in Turin, Italy, the company is now preparing to play a high profile role in the 2008 Beijing Olympics. To target buyers in the key North American market, Lenovo has aligned itself with the National Basketball Association (NBA) to become the league's "official PC partner." In Europe, the company has signed on as a sponsor of the Williams Formula One racing team.
Ready to retail
Lenovo inherited a strong presence in the corporate PC market from IBM, which over the past two years it has managed to maintain. But the company's increased focus on quality, innovation and sport sponsorships shows that it's now aiming to make a bigger push into the mass merchant and dealer channel. This makes sense, but it won't be easy. Not a single Chinese manufacturer has managed to crack the global consumer consciousness with a brand name to rival the likes of Dell or HP. If Lenovo wants to grab market share, it will need more than sharp engineering and a low cost base – it will also need to become an expert on marketing as well