A Case Study of Lenovo Strategies

4635 Words Jan 22nd, 2013 19 Pages
Case @ China

The Roadmap
Cheung Kong GSB Case Study Centre

for Lenovo to Go Global
—A Case study of Lenovo Group Strategies
I.Lenovo: refocus on PC operation
On December 8 , 2004, Lenovo consummated a deal with IBM whereby Lenovo was to acquire IBM’s desktop and laptop PC unit and its R&D and procurement operations worldwide for the sum of US$1.25 billion. On May 1 2005, Lenovo completed its acquisition of IBM’s PC Unit. “Using an analogy, our enterprise is well likened to a tortoise but our foreign competitor is more like a rabbit. Instead of racing against the rabbit heads-on, we would rather ride on its back and let it carry us forward,” said former Lenovo Chairman Liu Chuanzhi. L e n o v o a c q u i r e d I B M ’s P C U n i t
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Under the guidance of this main principle, Lenovo kicked off its strategic transformation in 2001 by
Figure 1. Lenovo 2001 diversification organization adjustment scheme

shifting from a focus on PCs to a major international corporation diversified in operation and leading in IT technology, while cautiously and proactively marching toward the ideal of a “high-tech, service-oriented and international Lenovo.” (i) “High-Tech Lenovo” Lenovo CEO Yang Yuanqing acknowledged that the core competency of Lenovo lay in its management and teamwork rather than technology. To continue rapid growth in the future, however, Lenovo needs to flex its competitive muscle in respect of technology and services. In early November 2001, Lenovo announced the launch of Greenland–a 3GHZ CPU enabled concept product in partnership with Intel, signalling that it had become globally advanced in PC heat dispersion technology. In March 2002, Lenovo unveiled its latest development in server core technology—Sureye server smart monitoring management system. IDC statistics indicated that Lenovo’s Wanquan server became one of the top 10 servers globally in the fourth quarter of 2001 and this was the first time China’s server vendor became an advanced vendor worldwide. On August 27th 2002, Lenovo developed Shen Teng 1800 PC with a peak value of 1.027 million MIPS. In November 2002, an authoritative organization published the Top 500 High-

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