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
Themes : Globalization | International Business | Marketing
Industry : Information Technology and Related Services

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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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.

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.

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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4] Wang Yu, Lenovo joins Olympics Club, China Business Weekly, March 08, 2004.

5] Noguchi Yoki, Trying to stay in touch? Telecom companies are eager to help Hispanic families do just that, www.gwu.edu, June 06, 2004.

6] Founded in November 1949 by the Government of China, CAS is a leading academic institution and research and development center in natural and technological sciences and high-tech innovation.

 

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