Can Lenovo Do It?

While the majority of us receive email, surf the web and text message on our Apple Iphone’s, Samsung smart phones or even blackberry’s we rarely think about or identify with the number 1 maker of computers in the world.  After a very successful acquisition of IBM’s money losing PC business in 2005 Lenovo a Chinese company has asserted themselves as the leaders of the PC business.  While more traditional PC powerhouses like HP and Dell are faltering Lenovo is beefing up their supply chain, making acquisitions and setting the stage to dominate the mobile phone and tablet business as well.

Lenovo is perhaps one of the most unique Chinese firms and possibly the world.  Lenovo has made itself a truly global organization.  They have dual headquarters in Beijing and North Carolina along with top executives stationed in 7 different countries.  In addition Lenovo still handles all manufacturing and R&D in house versus outsourcing.  Lenovo’s CEO Yuanqing Yang believes that Lenovo’s strategy of production and R&D has allowed them to move quicker than the competition and as a result they are gaining market share far faster than any of their competitors.   Just last year Lenovo picked up 13% of the PC market share in the US, a number that by far outpaced HP and Dell.

Every year Yuanqing Yang, known around Lenovo as YY hosts a dinner at his estate with all of his top lieutenants to discuss the upcoming year and growth strategies.  What started as a simple toast years back has turned into a tradition where each business head holds a glass of wine in their hand and sets a goal for their own business unit.  This year many of the toasts centered around a rise in Smartphone’s or retail growth.  Lenovo is focused on overtaking Apple and Samsung in many categories.  Lenovo is slowly creeping into the retail and Smartphone sector like Apple did years ago.  Lenovo is currently offering Smartphone in Asian countries where they have more brand recognition and expanding their retail stores into new countries.  Instead of making a big splash and entering every market Lenovo is slowly building up their reputation and dominating the markets where their presence is already known.

What struck me as extremely interesting and well thought out is Lenovo’s current growth strategy.  Instead of just trying to jump into the Smartphone market in North America they are starting slowly where Lenovo currently has the brand awareness of an Apple or Samsung in the US.  In addition Lenovo has a very good feel for the retail industry and what type of stores/outlets to have in what areas.   For example Lenovo has a very high end Apple type store in Beijing but just a few miles away they have a smaller less flashy store in the local electronics market.  After reading this article I do not think it will take that long for Lenovo to transform itself from the PC you get at work to a household name on a number of devices for everyone.

Do you think Lenovo has what it takes to dominate these competitive sectors in the US and do they have the right strategy to build their global brand?


9 thoughts on “Can Lenovo Do It?

  1. I absolutely think they can develop themselves into a globally accepted brand. Personally, I was recently weighting a purchase of one of their products. I was doing a comparison between what Apple, Dell, and Alienware, and Lenovo offered and being a techie, I was surprised that Lenovo actually outclassed the competition. My first notebook pc was an IBM Thinkpad back when I was in college and I have to say, Lenovo steps beyond many of the pc competitors through their offering of the classic high quality exterior and innovative components within. I think if they continue on their path and do not make the same mistakes many competitors have done over the years in cutting quality for profitability, I will more than likely be going their direction.

    Over the years, one of the trends that I have seen is that each firm gets to the top through innovation and commitment to quality and always seems to fail when the organization changes priorities. If Lenovo is smart and maintains their current path, I feel they will be successful in the long run and become a new Apple for the PC market.

  2. Rob,

    I tend to agree with Richard’s statement, in that I also feel Lenovo has the potential to increase their brand recognition and image from a global perspective. The strategy they have is a great strategy, starting in a place where they have that recognition and building from there. They aren’t immediately trying to hit a so-called “home run” with their initial strategy. By continuing on in their current path while developing superior products (which they already sell pretty innovative computers, e.g. ideapad), they have the potential to become a major player.

    In terms of overtaking the Apple’s and the Samsung’s in the smartphone industry, that’s a really ambitious desire, which I’m a little more hesitant to say will be successful. There have been phones released in the US and the world dubbed the “iPhone” killer, only to find out that it barely made a dent on the market share. I feel Lenovo could definitely pass Blackberry in terms of market share though, as I feel Blackberry is a dying brand.

  3. I found your article very interesting because I had never thought of Lenovo as a company that sold smart phones or tablets. So, I had to go into their website and check out their phones and I must accept I was very impressed. They were pencil thin with incredible specs. With Lenovo already being a leader in the computer industry and with the knowledge base they currently have, I am pretty sure they are going to be famous in the smartphone and tablet markets too. A good product and global reach is what a company needs to become an industry leader and Lenovo has both. Apple and Samsung, both entered the smartphone and tablet industry early in the game. The only challenge that Lenovo might face by entering this industry a little late is, more competitors. It’s products have to surpass at least 10 – 20 medium scale industry products, before it can start competing with Apple or Samsung. Customers are always looking for new products to buy and Lenovo just needs to make one revolutionary product to become famous and there would be no looking back from then on!

  4. If Samsung and Apple had zero foresight, they would not think that Lenovo would be a threat in the smartphone market. One would have to assume that the threat to those companies will come faster rather than slowly. As mentioned, they already have a global reach with headquarters in China. The Chinese people are starting to create a “middle class” and as more and more people move into the cities and they get the infrastructure with cell towers, etc. it is safe to assume that Chinese people will start to buy Chinese products. If the technology gap is closed on that front, I think the threat will come sooner rather than later. Cracking the code in the United States might be a longer term project, but I definitely think it is possible.

    One of the advantages that my company has with being $250 million in sales versus competing with companies that are in the billions of dollars in sales is the fact that we are able to buy with the big guys at the mill level but we are small enough to be flexible to shape our services towards our customers. You touched on the flexibility of the Lenovo company, and if they are able to keep that mindset and remember what the end goal is, I think they will be incredibly successful.

  5. Nice article, I had no idea that Lenovo was venturing into the smartphone market. I have been very impressed with their products in the PC realm and after looking into their smartphones I think they have a shot to carve out a piece of the smartphone industry. They sound like they’re a rather global company that has a pulse on their product awareness in different areas. I think they’re making a smart move by starting off small where they know they have a somewhat established presence. I’m excited to see when they make the jump to North America – I’ll be interested to see how this venture turns out.

  6. I agree that Lenovo is mostly known in the US market from their PC production and predominantly for their computer use in offices in the business world. I am not even sure if they are dominant PC maker for the home use. It may change, if they keep their current strategy on course however it is not an easy task to compete with such players like Apple, Samsung, LG, or even Sony. Therefore, I believe that at this stage Lenovo does not offer much to dominate smartphone market and it would be quite difficult to compete against such strong establishments as Apple and Samsung products. In my opinion it would take a long time to for Lenovo to catch up to the market leaders, not to mention dominate them, unless of course they will introduce such a revolutionary product as Apple did with their iPhone.

  7. Good article. I think in the U.S. we tend to think that whatever is happening here is happening everywhere. Domestically, the iPhone has been dominant primarily because they have found a way to show everybody that they need to have 1) an iPhone 2) an iPad, and 3) a MacBook. As a result, they have turned the need into one device for personal computing into three.

    Despite successfully being able to do this, other challengers are starting to rise, and Apple seems to be struggling to maintain their innovative edge that they have had for years. This opens the door for a Lenovo to carry their dominance of Asia and other parts of the world to the US.

  8. What a great post. So far I’ve had two Lenovo laptops in the past 5 years and have absolutely no complaints about their products as far as quality and performance, which is probably one of the reasons why they are doing so well in PC industry all around the world. All that aside, I personally think that it would be very hard for them to break into the US Mobile industry, since Apple and Samsung and are dominating this market already along with less popular Windows phones, etc.

    I really like how you touched up on the company not making any huge waves and just “slowly building up their reputation and dominating the markets where their presence is already known”. I honestly think that it’s their best business plan. If they do come up with something that could knock Apple’s socks off, I’m sure that product would quickly hit US market as well.

  9. Great post. I’ve honestly thought that there’s been room for more players in the laptop industry for a while, there just needs to be a company that does it right. I’ve only pudchased apple laptops in the past, and while their quality is good, the price isn’t. I wouldn’t be surprised at all if they continue their path and eventually become comparable to apple and Microsoft.

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