Lenovo's Globalization Strategies
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Case Details:
Case Code : BSTR156
Case Length : 15 Pages
Period : 1998 - 2005
Organization : Lenovo
Pub Date : 2005
Teaching Note : Not Available
Countries : China
Industry : Computer Hardware
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Introduction Contd...
In the early 2000s, Lenovo expanded into new business areas
including the manufacture of mobile phone handsets and digital cameras, and
management consulting.
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After its significant success in the Chinese market, Lenovo made plans to go
global. In March 2004, Lenovo joined The Olympic Partner (TOP) to sponsor
Olympics games to be held in 2008 at Beijing. According to analysts, this move
would help Lenovo gain brand recognition globally.
Commenting on the benefits from this deal, an industry analyst said, "For
Chinese firms, like Lenovo, the Olympic Games provide an honorable opportunity
to enhance their image and demonstrate their strengths in key technologies,
products and services worldwide."4 In
April 2004, the company changed its name from ‘Legend' to ‘Lenovo,' where ‘Le'
stands for Legend and ‘novo' stands for novelty and innovation.
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Then Lenovo acquired IBM's PC unit in December 2004. Commenting on this move,
Leslie Fiering, an analyst from Gartner, a global research firm said,
"Lenovo aspires to become a major international player and a recognized
brand, a company with the ability to sell into multinational corporations
and be profitable.
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This deal
improves its chances, but the business is only going to get tougher over
the next few years since the worldwide growth in PC sales will slow to
about 2 percent a year from 2006 to 2008, less than half the projected
revenue gains of 4.7 percent a year from 2003 to 2005."5
Background Note
Lenovo was originally called Legend Beijing, and was
founded in 1984 by Chuanzhi along with ten colleagues at the Computer
Technology Institute of the Chinese Academy of Sciences (CAS)6.
With an initial investment of 200,000 yuan, the company was established
with the aim of commercializing the research and development activities
conducted at CAS... |
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