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Review The Lenovo Group Limited Commerce Essay

Lenovo Group Limited founded in 1984 is ranked as China ‘s largest and the universe ‘s 4th biggest personal computing machine maker, after Hp and Dell of the U.S. and Acer of Taiwan. Lenovo has a merchandise line that includes everything from waiters and storage devices to pressmans, pressman supplies, projectors, digital merchandises, calculating accoutrements, calculating services and nomadic French telephones, all in add-on to its primary Personal computer.

Its advantage over other maker is that Lenovo has become a name for quality produced computing machines that cater to the demands of the consumers. It has been successful in capturing the market with its latest inventions and late.Further with its purchase of the PC division of IBM became the start for Lenovo to venture into more high possible overseas market.With association with IBM, Lenovo acquired the right and privilege to utilize the IBM trade name name for five old ages, such as the ‘ThinkPad ‘ . The company transferred its corporate central office from Beijing, China to North Carolina, USA. Today the group conducts concern in 166 states and employs over 25,000 people worldwide.Sales outside of Greater China compromised 59 per centum of the company ‘s entire turnover in the 2nd one-fourth of 2007.

Lenovo ‘s success was consequence of really wise direction determinations and schemes. Lenovo is no longer merely an importer of computing machines but it turned itself into a manufacturer and marketer, opening more countries of chance for enlargement. Lenovo continued the development of advanced merchandises and entered into the “ Pentium epoch ‘ and has become unstoppable in making a name that captures a important market portion. In 2000what made Lenovo a really much loved company by the consumers is their ability to place the consumer demands, to instantly supply to fulfill such demands. Despite possible disadvantages to their company image, Lenovo, made known to the populace that they are remembering laptops and replacing them due to a study that a failure in battery public presentation has led to an incommodiousness to the users.


After 2004, transnational Personal computer shapers like Dell and HP began to hold a major impact on Lenovo market portion in 2004, peculiarly among cardinal accounts-mandating better executing and nucleus fight in order to increase market portion and better concern public presentation.

A Solutions

To turn to such challenges, Lenovo proposed alterations to its concern theoretical account and scheme in 2004, using a project-focused attack to develop its corporate scheme. Specific stairss taken were:


Expanding into new markets, work outing underlying jobs, heightening organisational efficiency or bettering employee satisfaction or capablenesss.


2. The company believes that certain conditions must be in order to successfully use undertaking direction: 1st, a company must confront a challenge ( i.e. an external factor that demands it to make so ) ; 2nd the office must be led by a professional squad in order to vouch that company-specific systems are developed ; and eventually, it must

adjust with the company ‘s organisational civilization and be appreciated. Otherwise it ‘s hard to put to death.


3. Previously, stretegic programs were non financially supported but now Lenovo earmarked money for strategic execution of programs.

Valuing undertaking direction professionals


1. Lenovo sent its top endowment in undertaking direction to take the PMP enfranchisement test developed and managed by Projecrt direction Institute ( PMI ) which is the largest professional undertaking direction institute in the universe. Get downing from its functional sections ( e.g. R & A ; D, supply concatenation direction, etc. ) Lenovo selected a group of cardinal professionals to have preparation in direction and sit for the PMP enfranchisement. The returning professionals catalyzed undertaking direction in their several functional sections and trained other squad members.


2. A hierarchy of undertaking direction places was introduced within the company. Management Professionals were appraised by experts yearly on two foreparts: 1st, based on their cognition base, viz. their background and relevant apprehension ;

2nd, based on their public presentation. As an illustration, the company ‘s gross revenues division is broken up into consecutive degrees such as adjunct sales representative, gross revenues director and adviser. The hierarchy builds a professional ladder for undertaking directors, functioning as a channel for undertaking direction calling development.


Major Accomplishments

Lenovo ‘s experimentation in undertaking direction significantly

– advanced the transmutation in its corporate scheme

– improved its concern theoretical account

– improved squad work and

– leveled the playing field

– squad civilization and corporate civilization have been promoted

– an advanced spirit has been instilled and international integrating has been improved.

In footings of the market consequences, Lenovo ‘s version of undertaking direction has improved the

company ‘s nucleus fight with improved bringing and client satisfaction.

In bend, typical public presentation was delivered: In 2006, the company had a market portion of 7 % in the planetary Personal computer market, led merely by Dell and HP. Its entire turnover was USD 14.6 billion, a rise of 10 per centum over the old twelvemonth.


The cardinal subject of Lenovo for 2010 is prosodies, prosodies and more prosodies. As administrations switch their focal point from lasting to showing concern value, prosodies will play an progressively of import function in maintaining direction informed about undertaking public presentation and its impact on the bottom line and client service.

1. The Implementation of New PPM Solutions Will Soar

Programme and undertaking directors, under force per unit area from senior direction to show undertaking portfolio public presentation and its impact on the endeavor, will do the pitch for – and win – resources to implement undertaking portfolio direction solutions. This will supply the fact-based decision-making for

senior direction.

2. Senior Executives Will Embrace the Value of Project and Programme Governance

To ease improved organizational public presentation, undertaking and programme administration will be embraced from executive direction to the undertaking directors. This will assist public presentation by guaranting the portfolio,

3. Vendor Management and Programme Outsourcing Will Move Front and Centre

The tendency of outsourcing will jump frontward in 2010 as administrations continue to look to make more without lasting additions in staffing and other resources.

4. Risk Management Will Become a PM Compulsion

The greater accent on fiscal hazard direction will dribble through to other parts of the endeavor where hazard appraisal rules can be used to drive public presentation. This will take to an increased focal point on PM hazard appraisal with an accent at the programme every bit good as the portfolio degree.


Working Model

Lenovo owes its success to holding user-friendly merchandises and services, being less over-engineered and less expensive than those provided by planetary market leaders with characteristics that address curious demands of China ‘s markets. Its concern theoretical account combines: acquaintance with specific market features and user demands ;

a superior domestic distribution web and information direction

advanced industrial designs ;

strong trade name acknowledgment ;

trust on a low cost construction ; and

entree to knowing and trainable cognition workers.


Developing Advanced Capabilities

Another strength is in industrial design and stuffs. Legend ‘s success in the China market owed much to its determination in 1998 to present a laptop ( the Tianxi theoretical account ) for consumers and little concerns, melding a fashionable design with public presentation characteristics that suited this market. It was introduced after 2 old ages of work that involved some of the taking planetary participants in stuffs, such as GE Plastics and Nike, and well-known design houses such as Palo Alto-based IDEO and Portland-based Ziba Design.


Weak to travel planetary

Around 2004, the company realized that it had to spread out beyond its China base if it wanted to avoid a slow-down. This exposed two cardinal failings:

A heavy trust on China ‘s price-sensitive and low-margin market range could squash the company ‘s net incomes.

This limited financess available for developing new merchandises and services and developing planetary trade name acknowledgment.

With grosss of HK $ 22 billion ( approximately US $ 2.9 billion ) in 2005, the company was much smaller than planetary industry leaders.


Geting IBM ‘s Personal computer division

Execution challenges

The challenges of implementing this acquisition are immense: to vie in a concern with slim borders and ferocious competition while piecing together complicated supply ironss, gross revenues webs and information systems. The new Lenovo needs to retain IBM Think Pad clients, while developing its ain trade name.

An every bit of import challenge is maintaining cost leading. The new company has four times the gross of the old Lenovo, but six times the staff cost of the China group entirely and merely twice the net income.

A A A A A A A A A A A A A A clang seemed ineluctable. The first CEO of the new Lenovo, an IBM veteran, A left after merely a few months The new one, William J. Amelio was hired by TPG. He had worked in IBM ‘s Personal computer division from 1979 to 1995 but arguably his greatest attractive force for Lenovo was his place with Dell since 2001 where, as Senior Vice President for Asia-Pacific and Japan, he had shaped Dell ‘s aggressive market incursion schemes.



A A A A A A A A A A A A A However, this diverseness of direction civilizations could besides go a beginning of learning.A For case, merely 18 % of Lenovo ” s pre-acquisition grosss came from laptops, while that portion for IBM ‘s Personal computer division was 60 % . For IBM, corporate clients represented about 60 % of grosss while 83 % of Lenovos grosss came from little concerns and consumers. Most significantly, Lenovo expected to profit from IBM ‘s planetary presence to get the better of its deficiency of experience in abroad markets.

Lenovo expects to derive entree to a world-wide web of skilled computing machine gross revenues and distribution employees who know revenue enhancement Torahs and invoicing patterns in 66 states. The same is true for R & A ; D. After the acquisition,


A A Immediate benefits include proficient support from IBM R & A ; D labs, entree to planetary market intelligence and distribution know-how, and larning for farther development of Think Pad laptops.A The acquisition of 1,500 IBM patents might besides bring forth extra income for Lenovo It is an unfastened inquiry, nevertheless, to what degree this will enable Lenovo to beef up and upgrade its ain advanced capablenesss.



An of import determination here is that successful companies have non attempted to leap into “ engineering leading ” functions, seeking to vie head-on with planetary engineering leaders through “ extremist ” inventions. Alternatively, they have focused on “ incremental ” and “ architectural ” inventions that allow them to prosecute “ engineering variegation ” schemes.

Such policies can merely win if they fulfill two conditions: they need to equilibrate protection of rational belongings rights with inducements for cognition diffusion to local houses ; and they need to supply a sufficiently big pool of people with the accomplishments needed to profit from integrating into planetary cognition webs.

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