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Contents
Introduction .......................................................................................................................... 2
Ownership of Lenovo.......................................................................................................... 11
Current Position .................................................................................................................. 13
Protect & Attack Strategy.................................................................................................... 16
Benchmarking..................................................................................................................... 18
Product Lines...................................................................................................................... 19
Product Trends.................................................................................................................... 20
Cloud Computing................................................................................................................ 21
Sponsorship ........................................................................................................................ 22
Competition ........................................................................................................................ 24
Competition: Dell................................................................................................................ 25
Competition: HP ................................................................................................................. 26
Competition: Acer, Toshiba, Asus....................................................................................... 26
Competition: Apple............................................................................................................. 27
Key success factors............................................................................................................. 29
Pursue Outside Markets....................................................................................................... 30
Innovation........................................................................................................................... 30
Key issues........................................................................................................................... 33
What Lenovo Could Gain From Buying BlackBerry ........................................................... 36
Analysis and Discussion...................................................................................................... 37
Recommendations............................................................................................................... 51
Conclusion.......................................................................................................................... 58
References .......................................................................................................................... 59
Appendix ............................................................................................................................ 62
Matrix Appendix A ............................................................................................................. 63
SWOT Analysis Appendix B .............................................................................................. 64
PEST Analysis Appendix C ................................................................................................ 65
PORTER’S Five Forces Appendix D .................................................................................. 66

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Introduction
The following report is a company analysis of Lenovo, the largest PC Company in China, and
the fourth largest globally. A brief history is provided, followed by an analysis of the current
position, competitors in the industry and key success factors and key issues that will propel
Lenovo to become more successful in the global PC industry. In addition, recommendations
are suggested to guide Lenovo to even more success. Financial forecasts show the
repercussions of the recommendations and Lenovo’s overall financial structure.
Lenovo Group Limited is today the fourth largest personal computer manufacturer in the
world, after Hewlett-Packard and Dell of the US, and Acer of Taiwan. Lenovo produces
desktops, laptops, servers, handheld computers, imaging equipment, and mobile phone
handsets. Lenovo also provides information technology integration and support services, and
its QDI unit offers contract manufacturing. Lenovo also offers Internet access through its
FM365.com portal. Its executive headquarters are located in Beijing, People's Republic of
China and in Morrisville, North Carolina, USA.
Lenovo Group Limited (Chinese: 联 想 集 团 ; pinyin: Liánxiǎng Jítuán) is a
Chinese multinational computer hardware and electronics company with its operational
headquarters in Morrisville, North Carolina and its registered office in Hong Kong. Including
hardware its mentioned above and IT management software and smart televisions. Lenovo is
the world's second-largest PC vendor by 2012 unit sales. It markets the ThinkPad line of
notebook computers and the ThinkCentre line of desktops.
Lenovo has operations in more than 60 countries and sells its products in around 160
countries. Lenovo was founded in Beijing in 1984 and incorporated in Hong Kong in 1988
under its previous name, Legend. Lenovo is listed on the Hong Kong Stock Exchange and is
a constituent of the Hang Seng China-Affiliated Corporations Index.
"Lenovo" is a portmanteau of "Le-" (from Legend) and "novo," Latin ablative for "new." The
Chinese name (simplified Chinese: 联 想 ; traditional Chinese: 聯 想 ; pinyin: liánxiǎng)

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means "association" (as in "word association") or "connected thinking" but can also
imply creativity.1
For the first 20 years of its existence the company's English name was "Legend" (in Chinese
联想 Lianxiang). In 2002, Yang Yuanqing decided to abandon use of the Legend brand name
in order to expand outside of China, as the "Legend" name was already in use by many other
businesses worldwide, thus making it impossible to register in most jurisdictions. In April
2003, the company publicly announced its new name, "Lenovo," with a large media
campaign involving huge outdoor billboards and primetime television advertisements.
Lenovo spent 18 million RMB (R (ren) stands for person 人 M (min) stands for people 民
together they mean people B (bi) means currency 币) on television advertisements, which
were broadcast daily for eight weeks. The billboard advertisements featured the Lenovo logo
against blue sky with copy that read, "Transcendence depends on how you think." By the end
of 2003, Lenovo had spent a total of 200 million RMB on rebranding.
History
1980
1981 IBM PCD introduces its first personal computer, the IBM PC
1984 IBM PCD introduces its first portable computer, the IBM Portable PC, weighing 30
pounds.
With an initial capital outlay of only RMB200,000, (US$25,000) Lenovo's founding
chairman Liu Chuanzhi, together with 10 like-minded colleagues, launches the New
Technology Developer Inc. (the predecessor of the Legend Group) funded by the Chinese
Academy of Sciences.
1986 IBM PCD announces its first laptop computer, the PC Convertible, weighing 12
pounds.
1
http://en.wikipedia.org/wiki/Lenovo,2013-04-27

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1987 IBM PCD announces the Personal System/2 personal computer.
1988 Legend’s Chinese-character card receives the highest National Science-Technology
Progress Award in China.
Legend Hong Kong is established.
1990
1990 The very first Legend PC is launched in the market. Legend changes its role from that
of an agent for imported computer products into that of a producer and seller of its own
branded computer products. Legend PCs are ratified and accepted by the China Torch
Program.
1992 IBM PCD introduces ThinkPad, the industry’s first notebook with a 10.4 inch color
Thin Film Transistor (TFT) display and a TrackPoint (red ball) pointing device.
1993 Legend enters the Pentium era, producing China’s first "586" PC. Legend establishes
1+1 retail network.
1994 IBM PCD introduces the industry’s first notebook with integrated CD-ROM, the
ThinkPad 755CD.
1995 IBM PCD introduces the “butterfly” keyboard.
IBM PCD moves from Boca Raton, Florida, to Raleigh, North Carolina.
Legend introduces the first Legend-brand server.
1996 Legend becomes the market share leader in China for the first time.
Legend introduces the first Legend brand laptop.
1997 IBM PCD introduces the industry’s first notebook equipped with a DVD-ROM, the
ThinkPad 770.
Legend signs an Intellectual Property agreement with Microsoft, the most valuable deal ever
made in China at the time.

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1998 IBM PCD introduces the industry’s first ThinkLight, a small light that illuminates the
keyboard in low-light work environments, such as onboard an airplane.
The millionth Legend PC comes off the production line. Intel Chairman Andy Grove attends
the ceremony, and takes the PC for Intel’s museum collection.
Legend establishes the first Legend Shop.
1999 IBM PCD introduces the industry’s first mini-notebook, weighing under three pounds,
with standard ports and a keyboard that is 95 percent of full-size.
IBM PCD announces its exit from the retail business.
IBM PCD introduces the industry’s first PC with an embedded security chip.
Legend becomes the top PC vendor in the Asia-Pacific region and heads the Chinese national
Top 100 Electronic Enterprises ranking.
Legend launches pioneering Internet PC, with its "one-touch-to-the-net" feature, which
enables millions of Chinese PC users to easily access the Internet.
2000
2000 IBM PCD ships its 10-millionth ThinkPad notebook PC.
Legend becomes a constituent stock of the Hang Seng Index - HK.
Legend ranked in top 10 of world's best managed PC venders.
2001 An IBM notebook with an embedded security chip becomes the industry’s first
notebook to be certified by the Trusted Computing Platform Alliance, an industry body
setting data security standards.
Legend successfully spins off Digital China Co. Ltd., which is separately listed on the Hong
Kong Stock Exchange.
Legend appoints Yuanqing Yang as President and CEO.
Legend first introduces "digital home" concept and launches accessories-enabling PC.
2002 IBM PCD introduces ImageUltra and Rapid Restore, the first automatic data recovery
technologies of their kind.

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Legend launches its first technological innovation convention, “Legend World 2002,” which
opens up Legend’s “Technology Era.” Legend introduces its visionary concept for the future
of technological development and applications, its Collaborating Applications project, as well
as its strategies for implementing Collaborating Applications.
Legend’s supercomputer, the DeepComp 1800 makes its debut. It is China’s first computer
with 1,000 GFLOP (floating point operations per second) and China’s fastest computer for
civilian use, ranked 43rd in the Top 500 list of the world’s fastest computers.
2003 IBM PCD introduces the industry’s first notebook with an extended battery life of up
to 11 hours.
IBM PCD introduces its ThinkCentre desktop PC line.
IBM PCD introduces its Active Protection System, the industry’s first notebook with an
airbag for hard drive and data protection in case the system is dropped.
IBM PCD ships its 20-millionth ThinkPad notebook PC.
IBM PCD introduces its ThinkCentre desktop PC line.
Legend announces the birth of its new "Lenovo" logo to prepare for its expansion into the
overseas market.
Based on the collaborative application technology, Lenovo initiates IGRS Working Group, in
cooperation with a few large companies and the Chinese Ministry of the Information
Industry, to promote the formation of the industrial standard.
Lenovo launches a Tech RoadShow 2003 nationwide to promote Lenovo's innovation.
Lenovo successfully develops DeepComp 6800 in November 2003. It ranks 14th on the
global list.
2004 IBM PCD introduces the ThinkCentre ultra small desktop PC, no larger than a box of
corn flakes.
IBM PCD introduces the first notebook with an integrated fingerprint reader.
IBM PCD ships its 100-millionth PC (counting both desktop and notebook computers).

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Lenovo becomes an Olympic worldwide partner. It is the first Chinese company to become a
computer technology equipment partner of the IOC.
Lenovo decides to develop the rural market by launching the "Yuanmeng" PC series designed
for township home users.
Lenovo and IBM announce an agreement by which Lenovo will acquire IBM’s Personal
Computing Division, its global PC (desktop and notebook computer) business. The
acquisition forms a top-tier (third-largest) global PC leader.
2005 Lenovo completes the acquisition of IBM's Personal Computing Division, making it a
new international IT competitor and the third-largest personal computer company in the
world.
Lenovo announces the closing of a US$350 million strategic investment by three leading
private equity firms: Texas Pacific Group, General Atlantic LLC and Newbridge Capital
LLC.
Lenovo establishes a new Innovation Center in Research Triangle Park, N.C., to enable
customers, business partners, solution providers and independent software vendors to
collaborate on new personal computing solutions.
Lenovo introduces the industry's thinnest, lightest and most secure Tablet PC, the ThinkPad
X41 Tablet.
Lenovo introduces the first widescreen ThinkPad with embedded wireless WAN, the
ThinkPad Z60, available for the first time with a titanium cover.
Lenovo becomes the world's largest provider of biometric-enabled PCs by selling its one-
millionth PC with an integrated fingerprint reader.
William J. Amelio is appointed as CEO and President of Lenovo.
2006 Lenovo introduces the first dual-core ThinkPad notebook PCs, improving productivity
and extending battery life for up to 11 hours.
Lenovo technology flawlessly supports the 2006 Olympic Winter Games in Torino, Italy,
supplying 5,000 desktop PCs, 350 servers and 1,000 notebook computers. Lenovo also hosts
seven Internet i.lounges for use by Olympic athletes and visitors.

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The first Lenovo-branded products outside of China debut worldwide.
2007 The Beijing Organizing Committee for the Olympic Games selects a Lenovo-
designed Olympic Torch as the winning design from among 300 entries. Named the “Cloud
of Promise,” the Lenovo-designed torch will travel the world at the front of the global
Olympic Torch Relay.
Lenovo delivers a supercomputer for a Formula One racing team that will provide eight
teraflops of computing power.
Lenovo introduces first EPEAT Gold Monitor with new visuals portfolio.
2008 Lenovo enters the worldwide consumer PC market with new Idea brand.
Lenovo’s ThinkPad X300 is called “the best laptop ever” by BusinessWeek magazine.
Lenovo becomes the first PC manufacturer to announce a client virtualization platform.
Lenovo provides a smooth, error-free performance at the Beijing Olympic Games. The
Lenovo solution – which included more than 30,000 pieces of equipment and nearly 600
Lenovo engineers – powered the largest sporting event in history.
2009 Lenovo leads PC industry in using recycled material.
Lenovo becomes senior sponsor of Computing Equipment and System Operation Service for
the World Expo 2010 in Shanghai.
Lenovo debuts Enhanced Experience for Windows 7, delivering significantly better
performance for the new operating system.
Lenovo sells its 1 millionth Idea Product.
2010 Lenovo achieves its highest ever worldwide market share and becomes the world’s
fastest growing major PC manufacturer.
Lenovo introduces LePhone, its first smartphone
Lenovo sells its 60 millionth ThinkPad
2011 Lenovo forms Mobile Internet Digital Home (MIDH) business unit to attack growing
opportunity in consumer devices such as smartphones, tablets and smart TV

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Lenovo forms a joint venture with NEC, creating the largest PC company in Japan.
Lenovo acquires Medion, a PC and consumer electronics company based in Germany,
substantially increasing presence in consumer market in Western Europe.
Forbes names Lenovo one of the world’s “100 Most Reputable Companies”
2012 Lenovo forms a joint venture with EMC to selling servers in China and develop
storage solutions Lenovo acquires Stoneware, a software firm focused on cloud computing
Lenovo announces it will acquire CCE, a leading consumer electronics company in Brazil
Lenovo sells its 75 millionth ThinkPad2
.
The “Legend” Behind Lenovo
In 1981, IBM’s first PC was introduced, which launched the PC revolution (Lenovo, 2010).
IBM had an open architecture policy, which allowed others access to the instructions and
specifications that IBM had created to build its very own PC. After the development of
IBM’s computer, interest in the PC industry drastically increased.
Lenovo was established in Beijing, China, by Liu Chuanzhi and ten engineers, who were
members of the Chinese Academy of Sciences in 1984 (Lenovo, 2010).
Legend created their very first product, a Chinese character card for computing in 1985,
which could read English software and process commands in Chinese characters. In 1988, the
Chinese character set received the National Science Technology Progress Award (Lenovo,
2010).
2
http://www.lenovo.com/lenovo/us/en/history.html,2013-04-27
1981
IBM launches PC
revolution
1984
Legend is founded in
China
1985
Legend creates first
product, a Chinese
Character Set

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Largest PC Manufacturer in China
The very first Legend PC was launched in 1990. At that time Lenovo changed its role from
being an agent of imported computers, to producing and selling their own brand of computer
products (Lenovo, 2010).
Legend became a publicly traded company on the Hong Kong stock exchange in 1994. The
Legend PC division was formally established that year. After only four years of launching its
first PC, Lenovo manufactured its one millionth PC (Plunkett, 2010).
Lenovo became the largest PC producer in China, producing 770,000 computers per year in
1998, outperforming IBM (Gonela, 2009).
1990
Legend launched its
first PC
1994
Legend builds one
millionth PC; and
goes public in Hong
Kong
1998
Legend becomes
largest PC
manufacturer in
China
2002
Legend begins
making Mobile
Phones
2003
Legend is renamed
Lenovo
2005
Lenovo acquires
IBM’s PC Division

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The Convergence of IBM and Lenovo
At the beginning of the millennium, Legend entered the Mobile Phone market and expanded
into different categories of the technology industry.
In preparation for the global market, Legend adopted the name Lenovo in 2003. They took
the “Le” from Legend to honor their roots and added “novo,” the Latin word for “new,” to
represent the innovation at the core of the company (Lenovo, 2010).
The most important year for Lenovo was in 2005. They acquired IBM’s personal computing
division, making them the third largest computer company in the world (Plunkett, 2010).
Lenovo became the sole provider of IBM personal computers, but IBM still continued to
finance and provide maintenance services for their PCs.
Ownership of Lenovo
The majority of Lenovo is owned by Legend Holdings, which is controlled by the Chinese
government. Legend Holdings is a Chinese investment company which was formed by the
Chinese Academy of Sciences that invests in IT, investments, and real estate.
Lenovo announced a strategic investment worth $350 million with three leading equity firms
in 2005, using part of the investment towards purchasing the IBM PC business ("US Firms
Invest," 2005). Texas Pacific Group (TPG) invested $200 million, while Newbridge Capital
LCC invested $50 million. TPG is one of the largest private equity investment firms in the
world, and they were also the creators of Newbridge Capital. Newbridge is an investment
company that invests in emerging markets, particularly in Asia. General Atlantic LLC, that
IBM
Lenovo

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provides capital and strategic support for growth companies, invested in $100 million ("US
Firms Invest," 2005) .
IBM also has a significant portion of ownership in Lenovo. When Lenovo purchased IBM’s
PC division in 2005, IBM became the owner of 18.9% of Lenovo (Lenovo, 2010). IBM has
decreased their shares of ownership in Lenovo, but they still provide Lenovo with support
services for “Think” brand products.
Percentages of Ownership

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Current Position
Lenovo is positioned in three market segments: China, emerging markets (excluding China)
and mature markets. The following section will explain the whereabouts of the markets, and
Lenovo’s future plans in the different regions. Before 2009, the main markets were classified
as Greater China; Europe, Middle East and Africa; Americas; and Asia Pacific (excluding

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China). Lenovo consolidated their market segments to have a more streamlined business
approach. Over the last two years, Lenovo has gained the fourth largest market share in the
world, and continues to be the largest producer of PCs in China. After a brief description of
the market segments, current strategies are included to give insight on their position in the
global market.
China is by far the largest source of revenue for Lenovo. As of 2010, China held 47 percent
of their total revenue, which is an increase of more than 6 percent from the prior year. About
3.5 percent of the sales are contributions from about two months of Lenovo Mobile revenues,
Lenovo’s recent re-acquisition of the mobile internet company in November 2009 (Lenovo,
2010). In Lenovo’s current “Protect and Attack” strategy, China is a main focus. Lenovo’s
plan is to protect China, grow revenues and expand in the market in which they have had
great success historically. Lenovo is currently the largest manufacturer of PCs in China, and
despite the global crisis that has taken a toll on nearly all other markets, Lenovo has
continually had strong demand. Demand was driven by economic stimuli and rural subsidy
programs. Additionally, unit shipments grew 37.4 percent from 2009. Lenovo is currently
targeting rural markets, government stimulus projects, and SMBs, (small-and-medium-sized
businesses). Lenovo’s market share in the PC industry in China grew to 33.4 percent. China
was the only market segment to have gains in 2010. In fact, from 2009 to 2010, the China
segment operating profit increased $68 million, which was the only reason Lenovo turned a
profit in 2010. The emerging market and mature market segments both had net losses
(Lenovo 2010/11 Annual Report).
Lenovo’s current strategy involves attacking the mature markets which include: North
America, Western Europe, New Zealand, Canada and Australia. Mature markets are usually
fairly stable and lack significant growth and innovation. Historically, these markets have
brought in steady revenues throughout the past decade. However, recent revenues have been
largely off-set by large expenses, and economies in many mature markets have been severely
weakened by the global financial crisis. Over the last four years, sales in mature markets have
decreased as a percentage of total revenue. In 2006, about 51 percent of the companies sales
came from mature markets, while at the year-end 2010, the percentage of sales decreased to
37 percent. However, sales grew 11.43 percent in 2010 (Lenovo 2007 Annual Report, 2010
Report).

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As of Q1 2011, Lenovo increased their unit shipments year-to-year by 49 percent and
improved their market share to 5.6 percent in mature markets. Lenovo also improved in
profitability. Due to the financial crisis in 2008, Lenovo had a net operating loss of $107
million at the end of the 2009 year, and a net operating loss of $97 million at the end of the
2010 year. However, as of the fourth quarter of 2010, the mature market segment only lost
$6 million, which is a huge improvement from a $37 million loss in the fourth quarter of
2010(2009/2010 Annual Report). The improvement in the Mature Market is due to the strong
shipment growth and cost cutting measures along with improving economies (Lenovo, 2010).
Lenovo is looking to bring a profit in the mature markets in the coming years (Lenovo
2010/2011 Q1 Report).
Within the last year, Lenovo has implemented its Mature Markets Group, which essentially
unites many of the markets into one entity for cost cutting purposes. The Mature Markets
Group was also created in effort to streamline the business structure. Lenovo also formed a
Channel Partner Organization that allows Lenovo to improve their relations, further
improving profitability. Their attempt to show their partners their commitment to its Business
Partner Channel bas been through holding partner events throughout the year to improve
relations (Lenovo 2010 Annual Report).
The emerging market segment currently holds the smallest percentage of revenue for Lenovo.
After the 2010 year, Lenovo held 15 percent of the yearly sales of $16,605 million, which
amounts to about $2,640 million. The emerging markets include: Africa, Asia Pacific
(excluding Japan, Australia, New Zealand), Central and Eastern Europe, Hong Kong, India,
Korea, Latin America, Mexico, Middle East, Pakistan, Russia, Taiwan and Turkey. China is
not included because it is the homeland country. Unlike mature countries with slow growth
and innovation, emerging markets are in a state of rapid growth, with much potential for
revenues. In both 2009 and 2010 Lenovo posted large losses of $107 and $97 million
respectively. Like the mature markets, losses were largely due to the global financial crisis.
Lenovo is however recovering. After the first quarter of 2010, Lenovo’s unit shipments
increased 69 percent from the prior quarter last year. The crisis is letting up and growth is
now starting to take a toll. Likewise, Lenovo’s emerging market share has increased 140
basis points to 5.4 percent. Lenovo’s focus in the emerging markets is primarily on
consumers, so they launched more Idea products (Lenovo’s consumer PC line) to address the
demand for consumer PCs (Lenovo 2010/11 Annual Report).

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Lenovo is currently implementing the “protect and attack” strategy, a term coined in 2009 to
expand their market shares globally. Essentially, the strategy is to protect their core business
in the Chinese market for PCs, and expand in emerging markets and mature markets.
Globally, Lenovo holds about 10 percent of the PC industry. Currently, Lenovo is the largest
PC manufacturer in China with a market share of 28.7 as of Q1 2010. Revenues from the
Chinese market alone made up about 48 percent of Lenovo’s total revenues as of 2010
(Lenovo 2010/11 Annual Report).
Lenovo’s success in China can be attributed to several reasons. Firstly, Lenovo is a China-
based company. Since 1984 Lenovo was in the business of producing home computers in
China, and were the first to do so (Lenovo, 2010). Since 1997, they have been the largest
producer of PCs in China. Additionally, they have held a strong brand name and forecasts
show they will continue to be the strongest PC company in China (Mirae Asset, 2010). Even
after the entrance of HP and Dell into the Chinese market, Lenovo has held their ground.
Protect & Attack Strategy
The “attack” part of the strategy involves mainly emerging markets, but also mature markets.
Lenovo is focusing on SMB and consumer products to increase their market share. Lenovo
also “attacked” Lenovo Mobile Communication Technology Ltd. in January of 2009 and
recorded about $91 million in revenues in about two months in early 2010 before the year

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end. Much of the success of Lenovo Mobile Communication Ltd. is in the success of
LePhone, Lenovo’s smart phone that is competing with Apple’s iPhone in China. The Group
saw an increase in revenue in emerging markets, but due to the change in classification of
geographic segments, further extraction of regional revenue is very difficult.
Additionally, The “Lenovo Way” has been a topic of discussion for the entire Lenovo
company. From the top down, Lenovo is implementing a new idea to streamline their
company culture in order to increase efficiency and innovation (Lenovo 2010 Annual
Report). The “Lenovo Way” adds core values to their current “protect and attack” strategy to
result in executing excellence and achieving objectives. The “way” includes commitment
and ownership to improve overall profitability and increase productivity (2009/2010 Annual
Presentation).
According to Dow Jones & Company, Inc, Lenovo is considering opportunities for
acquisition in China, specifically in the mobile internet sector, global consumer computer
market and developing regions (WSJ, 2010). Although at this time, Lenovo has not made any
moves to acquire.

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Benchmarking
After comparing Lenovo to its top competitors, many aspects of the companies stand out.
One of the most important financial aspects is the gross margin. Lenovo’s gross margin is
pressuring all parts of the business. Even after drastic cost-cutting procedures in 2009 and
2010, Lenovo’s gross margin is the lowest. The challenge will lie in where to make
adjustments. Lenovo could raise prices, further increasing gross margin, but that may
decrease sales and overall profitability. Competitor’s operations are large enough to utilize
economies of scale, in which they can lower their per-unit costs.
Additionally, Lenovo’s research and development costs are also the lowest by a long-shot.
Lenovo, being the largest PC company in China should be concerned, especially because HP
and Dell are continuing to expand their presence in China with considerable force. Lenovo,
even with a home-court advantage ,will have to step up their game to compete with the
power-houses of the PC industry.
Lenovo’s leverage is also a number to consider. Having a leverage of 5.58 is relatively high
to other PC manufacturers, except for Dell. The high leverage could add a level of risk to
current and future investors. The leverage could give investors potential for significant gains,
but for a large company like Lenovo, it’s important that they consider the long-term well-

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being of the company. Leveraging such a significant amount of their finances could over time
pose a huge risk for Lenovo.
Lenovo does seem to have a fairly illiquid position against its competitors, but the risk is not
as apparent after digging deeper. The reason they have more current liabilities than current
assets is in their payment structure of trade payables. Their current ratio is below 1, which
indicates they cannot cover their short-term obligations with their current assets. However,
their days in trade payables is 77 days and days sales outstanding and days sales in inventory
are both about 22 days. This means that Lenovo collects their receivables much faster than
they expend their payables, thus showing an illiquid position.
Product Lines
The ThinkPad laptop is well known for its outstanding performance and reliability, it’s “the
ultimate business tool.” This laptop offers small-business solutions, enterprise and education
solutions, powerful mobile workstations, durability, ergonomic designs, and tools that will
save businesses time and money. Lenovo’s ThinkPad X201 won “Best Business Laptop,”
from Computer Shopper in 2010 (Lenovo, 2010).
The ThinkPad was 61.2 percent of Lenovo’s sales, as of Q1, 2009/2010, bringing in largest
amount of the company’s revenue. This line of PCs primarily target commercial consumers.
Lenovo’s Think products grew 9 percent YTY, which was better than the global industry
average. It also outperformed the PC Market with 15 percent unit shipment growth this past
year (Lenovo, 2010).

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The IdeaPad is a high quality computer offered at a convenient price to consumers. It’s “for
business and pleasure,” according to Lenovo. This computer has high definition
entertainment and security tools for consumers. Lenovo offers light notebooks and touch
screen tablet notebooks in this line of their PCs. Lenovo’s IdeaPad Y550 won “Best Budget
Laptop,” from About.com in 2009. (Lenovo, 2010).
The IdeaPad was 34.5 percent of Lenovo’s sale, as of Q1, 2009/2010, bringing in the second
largest amount of the company’s revenue. Shipments increased 86 percent YTY and sales
increased 94 percent (Lenovo, 2010).
Product Trends
On Lenovo’s Q1 results, for 2009/2010, desktop computers accounted for 33.2 percent of
Lenovo’s total sales, notebooks accounted for 60.5 percent, mobile devices accounted for 3.5
percent, and other products accounted for 2.8 percent (Lenovo, 2010).
Consumers are becoming less interested in desktop computers as technological trends are
changing. Consumers and small businesses are now looking for more portable computers
with access to wireless internet. That way they have easy access to the internet wherever they
may be. As a result, notebooks have become the core source of revenue for Lenovo.
Notebooks will continue to be a strong source of revenue, but there is also great potential in
the mobile internet industry.
IDEA
34.5%
THINK
61.2%
Mobile
3.5%
Others
0.8%

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Lenovo realized the PC and mobile internet phone industries were converging, so they
repurchased Lenovo Mobile for twice the price they sold it for just two years ago (Schuman,
2010).
The company does not believe that mobile internet devices will replace notebooks because of
the sizes of keyboards and screens, but there will be an increase in the demand for mobile
internet devices within the next few years.
Cloud Computing
Cloud computing is a technology that uses the internet and central remote servers to maintain
data and applications. Cloud computing is a fast-rising concept that allows consumers and
businesses to rent or use numerous IT services without installation. Additionally, businesses
can acquire these applications on any computer as long as the computer has internet access.
This technology allows for much more efficient computing by centralizing storage, memory,
processing, and bandwidth at a low cost.
Desktop
33.2%
Notebook
60.5%
Mobile
3.5%
Others
2.8%

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In a chief information officer survey by Gartner, about 1,600 CIOs managing over $120
billion of IT spending stated that cloud computing is their second most important priority this
year (“Singapore”, 2010).
Just recently, Lenovo has announced the company’s cloud computing strategy and named it
Secure Managed Client. Lenovo’s cloud computing strategy consists of offering a number of
cloud computing products, ranging from its LePhone, ThinkPad and IdeaPad laptops,
desktops, enterprise servers and large public computing facilities (Xinhua News Agency,
2010). According to the company, Secure Managed Client will help businesses to reduce IT
costs and security risks by turning off hard drives and storing all data in a non-server remote
location. Lenovo states that cloud computing can reduce the average $120 a month that
enterprises spend to fully manage a PC to as low as $70 (Channel Insider, 2010). The
company hopes their vision will appeal to enterprises and both small and medium-sized
businesses. Mr. Chen Xudong, Lenovo’s vice-president and general manager of the Chinese
operations, said “Lenovo will be offering a simple cloud solution with a flexible and
streamlined way to manage companies’ complex IT environments.” Lenovo plans to
introduce more cloud terminals in 2011 (Xinhua’s China Economic Information Service,
2010).
Liu Jun, senior vice president of the company mentioned a cloud terminal, internet TV. Mr.
Jun believes that capturing the internet TV market will post an explosive growth of over 336
percent each year (Xinhua’s China Economic Information Service, 2010).
Sponsorship
Lenovo did not want to be seen as just a Chinese company, but as a global brand with a high
quality computer (Clifford, 2008). This is highly concentrated on building brand awareness
because not many consumers know of the company outside of China. Lenovo had decided to
associate themselves with sports to not only establish themselves as a global brand, but to
also associate themselves with values that are closely related to the company. That is exactly
what the Olympics and Formula One Racing provided for Lenovo (Ladousse, 2009). Creating
a sponsorship with the Olympics and Formula One provided Lenovo with the opportunity to
market their product worldwide.

23. 23 | P a g e
Lenovo was a sponsor for the 2006 Winter Olympic Games in Turin, Italy and the 2008
Summer Olympic Games in Beijing, China (Clifford, 2008). Lenovo provided the Olympics
as well as other partners of the Olympics computers, servers, engineers, technicians and a
variety of other technologies. Lenovo also won the Olympic torch design beating out over
300 competitors for the 2008 design. The torch was named “the cloud of promise” (Lenovo,
2010). Lenovo is able to associate their product as a world class brand by sponsoring the
Olympics.
Lenovo contributes to Formula One’s business in every way possible. They provide the
Vodafone McLaren Mercedes Team with technology to help improve race team
performance, engineering and testing, product and development and even to start the cars
before races and test sessions (Ladousse, 2009). Formula One has such a large dependence on
technology, which is why this partnership is so successful. Lenovo is able to associate their

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products with top performance and high reliability by providing the Vodafone team with the
technology they need to win.
Competition
This section deals primarily with Lenovo’s main competitors. Other computer companies are
trying to maximize their market share at home while also reaching abroad, beyond their
country’s borders. China is seen as one of the most profitable emerging markets in the world,
and the PC industry has taken great interest to say the least. The following briefly discusses
each of the global top five PC manufacturers as well as the popular Apple corporation.
Lenovo was already the largest PC maker in the world’s most populous country, China, when
it acquired IBM’s PC operations for approximately $1.75 billion in 2005 (Hoovers, 2010).
The deal allowed Lenovo to have exclusive access to the prestigious IBM logo for five years,
along with permanent ownership of the “ThinkPad” brand of computers. IBM helped pioneer
the PC industry in the 1980s, but more recently its PC division has dragged down on their
profits, a factor that led to their decision to sell off the branch. Now IBM can focus more on
its services and software, while simultaneously boosting Lenovo into the global PC market
(Knowledge@Wharton, 2005). Lenovo currently owns approximately 10% of the worldwide
PC market, and 28.6% of the market share in China, where it generates about half of its sales
(Fletcher, 2010).
Lenovo HP Dell Acer
Asus
and
Toshiba
Apple

25. 25 | P a g e
Competition: Dell
At the moment, Lenovo is the fourth-largest PC maker in the world by shipments behind
Hewlett-Packard, Dell, and Acer (Fletcher, 2010). Although Lenovo is number one in
China’s market, the competition for this coveted position is becoming more intense. Dell in
particular is about to turn up the heat and implement some significant changes in its overseas
strategy. China is the company's largest source of revenue besides the United States, and in
their last quarter, their revenue from China grew 52% from the year before. Dell now owns
about a 9% share of the Chinese computer market. Just this month Dell announced it would
be shutting down its large manufacturing plant in Winston-Salem, North Carolina, and it will
be investing $100 billion in China over the next decade. Dell and Lenovo both make laptops,
netbooks, desktops, servers, and now they have started to create smart-phones (Local Tech
Wire, 2010). Dell also ships almost twice as many units as Lenovo on a global scale, which
puts Lenovo at a disadvantage in gross margin and per-unit research and development and
administrative costs (Technology Business Research, 2008).

26. 26 | P a g e
Competition: HP
HP is the world’s largest PC manufacturer by sales, and it was the second largest PC vendor
in China. Now Dell and HP are both at about the same level with about an 8 or 9 percent
market share as seen in the graph on the previous slide. They are trying to strengthen their
presence even more, and are in the process of negotiating a deal with China’s three mobile
carriers China Mobile, China Unicom, and China Telecom to start offering HP’s low cost
netbooks for sale (Chao, 2009). HP has a distinct advantage over Lenovo on a global scale
because they sell more than twice as many units as Lenovo, and enjoy many of the benefits
that come with economies of scale like lower costs associated with each unit (Technology
Business Research, 2008). Interestingly, David Roman, a former Apple executive and former
vice president of HP’s worldwide marketing communications, was just hired by Lenovo this
year. Mr. Roman was the man behind HP’s acclaimed “The computer is personal again”
advertising campaign. Lenovo’s brand name may gain a significant boost with the help of
this well-respected marketer (Madden, 2010). HP is also looking to open many large-format
branded stores throughout the Asia-Pacific region, a strategy that proved successful in the
U.S. and in India where it already has more than 1,000 retail outlets (Hicks, 2008).
Competition: Acer, Toshiba, Asus
The Taiwan-based company Acer just fell into third place this year behind HP and Dell as the
top leaders of the PC industry (Sherr, 2010). Acer acquired the well-known Gateway and

27. 27 | P a g e
Packard Bell brands in 2007 for $710 million which greatly increased their market share in
America and Europe. This also gave Acer access to popular retailers like Best Buy and
Circuit City. Lenovo also had their eyes on Packard Bell, which had a strong presence in
Europe and would have strengthened Lenovo’s brand image to consumers outside of China
before Acer took control. Thankfully for Lenovo, Acer doesn’t have nearly as strong a
presence in the Asian market with 6 percent market share compared to Lenovo’s nearly 30
percent. However, Acer’s CEO J. T. Wang says that, “Lenovo is strong in China, but we are
growing everywhere”. The senior vice president of Lenovo, Ravi Marwaha says, “The most
important thing is to make sure Lenovo continues to grow in China. The Chinese market is
the company’s primary concern and will act as a growth engine driving Lenovo’s expansion
in global markets” (Gonela, 2009).
During the second quarter of 2010, Asus and Toshiba tied for fifth place in the worldwide PC
market. Asus is a Taiwan-based company and it is notable for being the world’s largest
manufacturer of computer motherboards. In 2008 it made a big appearance in the consumer
market when it released the Eee netbook, one of the most attractive and inexpensive
computers available. This wildly successful product helped launch Asus into one of the
biggest computer manufacturers. Asus is quickly becoming a considerable threat as their
shipments rose 80 percent from the second quarter of 2009 to the second quarter of 2010,
nearly quadruple the industry average (Ogg, 2010). The Toshiba corporation is based in
Tokyo, Japan and they are known for their computers as well as medical equipment,
transportation systems, appliances, and a variety of other products. Because of their wide
breadth of products, Toshiba may have an advantage over Lenovo in that they have the power
to drop some of their business units and pour more funds into their computer manufacturing
unit. Toshiba’s shipments in the lucrative U.S. market grew 50 percent in the first quarter of
this year (Pettey, 2010).
Competition: Apple
Apple on the other hand is “missing a huge opportunity in the Chinese market” says Lenovo
chairman Liu Chuanzhi. “We are lucky that Steve Jobs has such a bad temper and doesn’t
care about China. If Apple were to spend the same effort on the Chinese consumer as we do,
we would be in trouble” (Hille, 2010). Apple has not responded to Mr. Liu’s comments but
they are planning on opening a new store in Shanghai along with 25 other retail outlets in the

28. 28 | P a g e
country by the end of next year. Part of the reason Apple doesn’t have much of a presence in
China is because only a few stores are authorized to sell their products. The iPhone for
example, is only legally available through China Unicom, the country’s second-largest
mobile phone operator, and its selling price is much higher than the normal going rate.
China Unicom is the Chinese equivalent of the American telecom network AT&T, the sole
cell-phone provider for the iPhone in each company’s respective country. China Unicom is
far behind market leader China Mobile, and it is notorious for its bad service, which
negatively affects Apple’s image (Einhorn, 2010). The iPhone is also in direct competition
with Lenovo’s smart phone, LePhone, which is customized for Chinese users. Apple has the
advantage of having over 100,000 content providers that create apps for the iPhone, whereas
LePhone only has 1,000 (Hille, 2010).
HP; 18.1%
Dell; 12.8%
Acer;12.4%
Lenovo, 10.1%
Toshiba, 5.4%
Asus; 5.4%
Apple; 4.9%
Others ; 30.9%

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Source http://prafulla.net, April 14, 2013 5:36 am
Key success factors
For Lenovo to continue making profits and continue competing against its massive
competitors, there are several key success they must reach in order to see the company
prosper. These factors include: pursuing markets outside China, becoming more innovative,
reaching economies of scale and continuing their strong presence in China.

30. 30 | P a g e
“We focus every day on meeting our commitments and delivering results. Guided by a clear
strategy, we are able to protect our core businesses and attack new opportunities for growth
in any market worldwide. Our business requires exceptional execution every day, in every
market, for every customer”-Yang Yuanqing
Pursue Outside Markets
In order to continue to grow outside of China and keep up with competitors in the PC
Industry, Lenovo is concentrating on pursuing outside markets. This includes emerging
markets such as Asia Pacific (Excluding Japan, Australia and New Zealand) and India as well
as mature markets such as North America and Western Europe. This presented an
extraordinary opportunity for the global success of Lenovo. In the 2009/2010 Q1 results,
Lenovo achieved for the first-time ever, double-digit market share worldwide increasing their
global PC market share to 10.2 percent (Lenovo, 2010).
As a result of Lenovo’s global strategy to pursue outside markets, emerging markets sales
rose 50 percent and mature markets sales rose 39 percent (Lemon, 2010). As Lenovo
continues to pursue this strategy, the company will gain a stronger global presence as well as
increase market share in emerging and mature markets.
“Our performance was strong globally, Lenovo has a clear strategy when and where to
focus on gaining share, and when and where to focus on maximizing profit, and we
executed that strategy well.”
-Lenovo Chairman, Liu Chuanzhi
Innovation
Lenovo has made a commitment to become well known for their innovation in products and
technology. “Our goal is to put more innovation in the hand of more people, so they can do
more amazing things” (Lenovo, 2010). Of the top 50 most innovative companies of 2010,
Lenovo ranked 30 according to Bloomberg’s Business Week (Boston Consulting Group,
2010). This is a great achievement considering Lenovo is a much younger company than their
competitors.

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At this past year’s Consumer Electronics Show, Lenovo stood out with several of their
industry first products such as the IdeaPad U1, the world’s first hyrbid notebook, the
IdeaCentre A300, the world’s thinnest all-in-one PC and IdeaPadS10-3t, the world’s first
multi-touch capacitive tablet netbook (“Understanding Lenovo,” 2010).
Lenovo is also expanding into new categories such as the mobile internet market. Their latest
product was their “LePhone” Smartphone, which is only available in China. This device runs
on the same program as the Google Android OS. It is now the number one preferred mobile
device in China (Lenovo 2010/11 annual report).
-First modern laptop to fly in
space
-First with a spill-resistant
keyboard
-First with built-in CD-ROM
-First with built-in DVD-ROM
-First with built-in wireless
capabilities
-First with embedded security
system
-First with built-in fingerprint
reader
-First dual-screen mobile work
station
Record For
Innovation

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Lenovo has many plans for the future of the company. They are planning to release a hybrid
computer sometime in the near future, a game console in 2011, and they are currently
working on the development of an Android tablet PC.
A hybrid personal computer, IdeaPad U1, is planned to be launched in China in early 2011
(“Lenovo Sets Hybrid,” 2010). This will be the industry’s first hybrid PC, which has a
detachable screen that functions as a netbook computer as well as tablet. “By fusing the
functionality of a notebook with the slate tablet’s rich multi-touch entertainment and mobile
Internet experience, U1 provides consumers the freedom to choose the device they prefer for
any activity,” Lenovo’s vice president Liu Jun stated (Lenovo, 2010).
Lenovo also saw an area of growth potential in the video game console market. They are
launching a game console, called eBox, with Beijing Eedoo Technology Ltd, in 2011
(“Lenovo to Launch,” 2010). The eBox does not use a physical game controller. Instead, the
game console is controlled by movements and gestures detected by a camera. This device
will integrate a cloud computing software architecture, providing interactive games for users
(Lee, 2010).
An Android tablet, known as LePad will be launched sometime in the near future. This
device is similar to the iPad that was recently introduced by Apple. The company has yet to
enclose a launch date, as the device is still under development but they do believe that tablet
PC’s will be a smaller portion of the market at least for the next five to ten years.
Lenovo plans to launch new technology to keep up-to-date with the technological trends, but
they will still maintain their focus on notebooks and desktops (“Lenovo to launch tablet,”
2010).
IdeaPad U1 IdeaCentre
A300
IdeaPadS10-3t LePhone

33. 33 | P a g e
Key issues
Lenovo is in a position to face many challenges in the PC market. The emerging markets are
still in a rough financial position. Likewise, mature markets are still lacking financial strength
and are easing out of recession. Also, China is the fastest growing country in the world, so
Lenovo must be quick to adapt and respond to movements in the market. Without the
revenue from China, Lenovo would be in a world of trouble. In 2009, Lenovo recorded a loss
of $225 million, making it the biggest loss in the history of the company (Lenovo, 2010).
Fortunately at the year end of 2010, Lenovo pulled out a $129 million gain. The following
section will debrief the challenges Lenovo is facing and will potentially face in the near
future.
Weak Global Brand Image
Despite Lenovo being the fourth largest computer company in the world, their brand image is
not well known outside of China. Many Chinese companies have not succeeded in marketing
their products in other countries very well, mainly due to their lack of advertising,
sponsorship, and the perceived quality of Chinese products. Foreign consumers may have a
stereotypical notion that Chinese products are cheap and low quality because of the
abundance of “dollar store” products that are stamped with the well known “Made in China”
mark. This stigma may negatively affect Lenovo, though their recent purchase of the PC
division of the American company IBM may help that.
Hybrid IdeaPad
U1
LePad Android
Tablet
eBox Game
Console

34. 34 | P a g e
Lenovo has also not advertised their products in other countries well enough for consumers to
identify the brand. This puts Lenovo at a competitive disadvantage in their pursuit of new
markets where industry giants like HP and Dell already have a well known presence.
A variety of different marketing strategies have been implemented to strengthen brand
awareness, including the exposure Lenovo received in its purchase of IBM’s personal
computing division. The company also renamed itself in 2003 from Legend to Lenovo, they
sponsored the 2006 Winter Olympics and the 2008 Summer Olympics, and they continue to
sponsor Formula One Racing. Each of these events have helped increase Lenovo’s brand
awareness, but there are many consumers in the market that are still unaware of who the
company is. In order to dissociate itself from not be recognized as a low quality product,
Lenovo has stepped away from being portrayed as a Chinese company. Lenovo has blended
their management staff to include original Chinese managers as well as American managers
who used to be a part of IBM. They have also established several headquarters and
manufacturing plants in multiple countries around the world.
Gross Profit Margin Pressure
Currently, Lenovo’s cost of sales is extremely high; nearly 90 percent. This indicates that the
mark-up on Lenovo’s products is very low. This is mainly attributable to the emerging and
mature markets. For the last 2 years, both the emerging market segment and the mature
market segment have had losses. In the 2009 year, Lenovo reported a combined operating
loss of $244 million and in 2010 a loss of $162 million in the emerging and mature markets.
The decrease in losses in 2010 can be attributed to their significant cost-cutting measures and
increased overall sales. Lenovo decreased their selling, general and administration costs
nearly $350 million. A portion of this is their 11 percent staff layoff, sales and distribution
expenses were reduced by $100 million, administrative and research and development
expenses decreased $66 million, and other operating expenses were lessened by $170 million
(SinoCast Computers & Electronics Beat, 2010). However, sales increased from 15 billion in
2009 to over 16.5 billion in 2010. Additionally, their PC shipments rose 48 percent in China,
outperforming the market growth rate of 21 percent. Even still, economies in the emerging
markets and mature markets are hurting Lenovo’s profitability. Lenovo has had to keep prices
down in effort to keep sales up. In those segments they have increased profitability, but until
the economies gain significant strength, gross margin will remain under pressure.

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While the strengthening economies will add profits to Lenovo’s operations, economies of
scale will also significantly increase their gross profit margin and ultimately their net income.
Economies of scale is when a company such as Lenovo can produce mass amounts of their
product in order to decrease per unit costs. Companies such as Dell and HP have operations
much larger than Lenovo and with gross margins of 18 and 24 percent respectively, they have
much more control over price and less strain on other parts of their operations.
Competition: Dell & HP
The PC industry is currently one of the most competitive industries in the world. Since the
PC revolution in the 1980s, PC manufacturers have been constantly striving to produce the
newest, fastest, most innovative machine. Lenovo was born in China, one of the fastest
growing countries in the world, and they have a significant market advantage over its
competitors there. They have a strong brand image in their home country and have had no
trouble bringing in high revenues.
However, industry giants HP and Dell have already started infiltrating China and have no
intentions of letting up. They are trying to grasp the opportunity of increasing their profits,
especially in times like this, when many of their historically successful countries are
struggling financially. Lenovo now has to compete both at home and abroad with some of the
strongest companies in the world. Dell already owns a 9% share of the PC market in China,
and over the next decade they plan to invest around $100 billion into the country. HP owns
an 8.2% share and they are currently the biggest PC manufacturer in the world. These two
companies appear to be the biggest threats to Lenovo both globally and in China.
Dell and HP both have higher revenues than Lenovo, and have the ability to pursue a wider
variety of options with all their money. It isn’t as big of an issue for them to penetrate a
foreign market like China. Obviously Lenovo’s funding is more limited, so they need to find
an efficient balance for their expenses between the Chinese market and outside markets. The
graph on the next slide illustrates the differences in purchasing power between the three
companies.The graphs depict the worldwide total amounts of revenue, gross profits, and net
income of HP, Dell, and Lenovo, which are the top three PC companies in China. Clearly
Dell and HP have a lot more capital to work with compared to Lenovo. The distribution of
spending power between the three has remained pretty consistent over the past several years.
The fiscal year ended 2011 is not yet complete and is therefore not portrayed.

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What Lenovo Could Gain From Buying BlackBerry
Lenovo (992) means ( lenovo group ltd (992:Hong Kong)) executives can’t seem to stop
talking about BlackBerry (BBRY) means (research in motion (BBRY:NASDAQ GS) . First,
the Chinese computer maker’s chief financial officer, Wong Wai Ming, told Bloomberg
News in January that the company was “looking at all opportunities,” including the Canadian
company formerly known as Research in Motion. Now BlackBerry’s share price is rising
because Lenovo Chief Executive Officer Yang Yuanqing suggested his company is seriously
considering acquiring it. Yang told French financial newspaper Les Échos that a deal with
Waterloo (Ontario)-based BlackBerry “could possibly make sense, but first I need to analyze
the market and understand what exactly the importance of this company is.”
A Lenovo spokesman says the company has not done “any specific evaluation or activity” for
a BlackBerry deal. “Lenovo confirms that the company evaluates all growth opportunities on
a regular basis,” Brion Tingler said in an emailed statement. “We continue to focus on
driving organic growth while at the same time, as we have stated many times in the past, we
will consider M&A when it is aligned with our Protect and Attack strategy.”
It’s easy to see why Yang is interested in a foreign brand such as BlackBerry. Unlike many
Chinese companies just beginning to move beyond their home market, Lenovo is already a
global player. As the dominant brand in China, it is also growing fast in Europe, Africa, and
the Middle East. In the fourth quarter, Lenovo was the only one of the top five PC companies
to enjoy any growth in those markets,
( HP Retakes Top Spot From Lenovo as PC Shipments Decline according to data from
Gartner.)
Lenovo has consistently shown it’s not afraid of buying down-on-their-luck Western brands
to expand its reach. That’s the tactic the company followed for its computer business in 2005,
when it bought the PC division of IBM (IBM). The rough integration that followed
precipitated Yang taking over in 2009 from former Dell (DELL) dell inc (DELL:NASDAQ
GS) executive William Amelio. New CEO of Lenovo Group Yang Yuanqing and former
CEO William J. Amelio. Eventually, though, the deal helped Lenovo join the top ranks of
global computer makers: The company is neck-and-neck with Hewlett Packard (HPQ) dell
inc (DELL:NASDAQ GS) for bragging rights as the world’s largest PC company, having
passed HP in the third quarter before the American company regained its lead.

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Yang and others at Lenovo know they can’t afford to stick with computers. Lenovo is
growing—sales increased 8.2 percent in the fourth quarter—but the overall pie is shrinking
fast: PC shipments fell almost 5 percent in the quarter. That’s why company executives talk
about a “PC+” era for the company. They’ve had success in China, where Lenovo has in
three years vaulted from nowhere to No. 2 in the smartphone market, ahead of Apple (AAPL)
and behind only Samsung Electronics (005930).
Repeating that success outside China will be challenging. Abroad, Lenovo won’t enjoy the
same consumer brand strength or unmatched distribution network. BlackBerry remains a
favorite among business customers, and it could be just what Lenovo needs to overcome its
global weaknesses and compete against Apple and Samsung. Buying a tired brand with
strong ties to the corporate world worked once for Lenovo. Yang might be looking for a
repeat.
Analysis and Discussion
Market Definition/Description.The market is defined by the following type of products:
Notebook PCs are those with a screen size that is more than 11 inches in various form factors
and configurations. Mobile thin-client terminals, notebooks, media tablets, mobile phones
and smart phones are not included in this Magic Quadrant.
Desktop PCs include desk-based systems of various form factors and configurations.
However, we do not include thin-client terminals or technical workstations in this Magic
Quadrant. Although we are not evaluating thin-client offerings, we do broadly consider how
each vendor approaches alternative delivery models.
For more information about notebook and desktop definitions, see "Dataquest Guide:
Computing Hardware Definitions, Worldwide, 2009."
The main customers in this market fall into three private-sector segments:
Enterprises that operate globally
Enterprises that operate regionally but have some global presence

38. 38 | P a g e
 Midmarket or large enterprises that operate in one or more countries and have more than
1,000 employees
Vendor Strengths and Cautions
Acer
Although Acer is a global powerhouse in consumer PCs, it has not been able to translate that
success into the global enterprise market. In selected areas (Europe and Africa), the company
has established good corporate capabilities; however, the level of commitment, products and
direction are not consistent across all geographies. Customers requiring high levels of service
and support for PCs should expect to rely on local channel partners, especially if they are
operating in multiple countries. Users may need to make separate deals for each region, and
execution could be inconsistent as a result.
Strengths
Acer has good market visibility.
It provides good regional offerings in education and for small or midsize businesses that are
supported by a good channel partner network.
Acer has some global product offerings, with a highly efficient supply chain and a strong
market presence across many regions, but targeted mostly to transactional business.
Figure1. Quadrant for
Global Enterprise
Desktops and Notebooks
Source: Gartner (October 2012)

39. 39 | P a g e
Cautions
Acer's large-enterprise-level product offerings are weak. Commercial systems are targeted at
transactional (small business and retail) markets.
It lacks global service and support capabilities and has limited global account management.
Acer has limited, but improving, capabilities for delivering standardized products across
multiple regions.
Its image and platform stability programs are limited.
Apple
An increasing number of companies are interested in procuring Macs for all or part of their
global fleets. Apple has intentionally chosen to focus its business toward consumers. It does
not aggressively develop programs and services for global enterprise customers. For
organizations that have a strong dependence on Windows applications, the decision to adopt
Apple Macs can be a more complex undertaking, because Macs are not directly
interchangeable with PCs from other vendors in the market. Organizations that have multiple-
country operations will likely need to make separate arrangements in each region, with local
partners making global deployments more complex.
Strengths
Apple exhibits excellent product design and innovation.
It has ongoing financial and organizational stability.
Apple shows strength in selected vertical sectors in which high-end media creation tools are
necessary.
Cautions

40. 40 | P a g e
Apple lacks consistent global service and support capability.
Its enterprise-focused global sales organization and account management capability are
limited.
It lacks an enterprise-focused product offering.
Dell
Dell is a strong corporate PC supplier with good global coverage and capabilities. Although
the company provides good products and has bolstered its worldwide service capabilities, its
execution continues to be inconsistent, with some customers complaining of late deliveries
and inconsistent support levels. As the company positions itself beyond its PC roots, we see it
being less competitive on PC pricing, but broadening the range of products and services it can
provide. This includes the recent addition of thin clients through the purchase of Wyse
Technology. Dell is a strong viable supplier for all business PC requirements, and for global
and large-enterprise organizations.
Strengths
Dell offers good-quality products, programs and services targeted to global enterprise
customers in mature markets.
It has strong levels of account management for global enterprise customers.
Its broad product models cover a variety of form factors, including thin clients.
The company provides generally good global coverage.
Cautions
Dell experiences execution issues for some large global accounts at times, which results in
poorer responsiveness and less-competitive pricing.
Midsize enterprises that do not achieve "global account status" with Dell may experience
inconsistent service and support levels.

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Although Dell has good global coverage, at times, customers experience uneven service and
support levels in some regions, especially in emerging markets.
Although channel partners are playing a more important role in enterprise business compared
with the past, Dell's overall channel to market is still limited.
Fujitsu
Fujitsu has improved its ability to execute on a global basis and provides a good option for
corporate purchasing for many organizations. Although its U.S. operations are still relatively
weaker, it has added desktops and bolstered its North American capabilities. Fujitsu is also a
strong supplier of pen tablet PCs, an important segment with Windows 8.
Strengths
Fujitsu offers a range of high-quality, enterprise-class products with global availability,
including desktops.
With Fujitsu's strong line of pen-tablet products designed for vertical markets, it is well-
positioned for Windows 8 enterprise tablet implementations.
Its global pricing, account management and service offerings are improving.
Fujitsu has a good managed desktop service portfolio across Europe.
Cautions
Fujitsu's global presence and investments are focused mostly on Europe, the Middle East,
Africa and Japan.
Market share erosion has stabilized, but its market share position raises questions about
ongoing investment in global programs and services.

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Its emphasis on global and large accounts management capabilities has been inconsistent,
although improvements have been noted.
HP
HP remains the strongest overall PC provider, with a strong global presence and portfolio of
services and products. It is a strong viable supplier for global enterprise customers, regardless
of business size. The disruptive events of 2011 are no longer a concern, and HP customers
have no specific reasons to be concerned about the current organization. We see positive
signs that HP is refocusing on its PC efforts as it approaches 2013. Although we have seen
some signs of minor weakening of market share and less-competitive pricing, overall, we
have no concerns about HP as an enterprise PC provider.
Strengths
HP has a good understanding of the market and good execution of market strategy.
It has good account management for its largest global enterprise customers.
HP has the broadest product portfolio among its competitors, covering all form factors.
Strong channel ties give HP greater choice for fulfillment, which is an advantage —
especially among midsize organizations and in some emerging economies.
HP provides best-in-class response to industry supply issues.
Cautions
HP's overlapping PC brands can be confusing and may get more so in an era of
consumerization.

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Global implementations, especially those involving coordination across multiple countries,
have experienced increasing issues during the past year. However, sales force restructuring
looks well-designed to respond to recent problems regarding global accounts.
Lenovo
Lenovo has consistently improved its position both in global capabilities and in market
understanding during the past several years, and its market share growth has reflected these
improvements. It continues to provide well-designed products at very competitive prices.
Lenovo is becoming a stronger option for organizations requiring global PC deployments,
and is a strong viable supplier for all business notebook and desktop requirements.
Strengths
Lenovo's product design is strong, with continued investment in development capabilities.
Its ThinkPad brand is established, well-known and high quality.
Lenovo has made continuous improvements in its sales strategy, channel and supply chain,
combined with an aggressive competitive approach to the corporate market.
It has increased its focus on difficult geographies, such as African countries.
Lenovo improved its service offerings by moving coordination and control in-house.
Cautions
Expanding product brands is creating some overlap, which can be confusing for midsize
organizations.
Current aggressive pricing from Lenovo may not carry forward in future years.
The differentiation provided by Lenovo's ThinkVantage software tools is eroding. Alternative
offerings from Microsoft and third parties are improving and are often free, reducing the
value of Lenovo's unique tools.

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Of the larger players, Lenovo's efforts to expand beyond the PC to provide broader services
and data center capabilities are not as well-developed and may require customers to deal with
multiple vendors.
Panasonic
Panasonic is a provider of ruggedized and semiruggedized notebook computers. Although
Panasonic is not positioned to fulfill all of an organization's global PC requirements, within
its target market, it provides a solid level of support and capabilities.
Strengths
Panasonic has excellent engineering capabilities.
It has a strong understanding of selected vertical markets.
Panasonic is a viable supplier of ruggedized and semi ruggedized products, with a long
history of leadership in that niche market.
It has a strong understanding of mobile broadband and other wireless integration.
Panasonic has invested in global operation expansion; however, the coverage is not yet to the
level of leading vendors' global coverage.
Cautions
A lack of desktop offerings makes it inappropriate if a sole PC vendor is desired.
Panasonic lacks a consistent global presence. Global service and support depend on partners.
It has limited experience with mainstream users outside of vertical solutions.
Vendors Added or Dropped

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We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as
markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant
or Market Scope may change over time. A vendor appearing in a Magic Quadrant or Market
Scope one year and not the next does not necessarily indicate that we have changed our
opinion of that vendor. This may be a reflection of a change in the market and, therefore,
changed evaluation criteria, or a change of focus by a vendor.
Added
No vendors have been added.
Dropped
No vendors have been dropped.
inclusion and Exclusion Criteria
This Magic Quadrant focuses on suppliers that work directly or indirectly with global
enterprise buyers. The set of vendor inclusion criteria covers up to 90% of the total desktop
and notebook market for enterprises. To appear in this Magic Quadrant, vendors must satisfy
the following criteria:
Offer desktops and notebooks for professional users
Operate business globally
Hold more than 4% of the market share in enterprise markets in one of the major regions
Evaluation Criteria
Ability to Execute
This axis evaluates PC vendors on the quality and efficiency of the processes, systems,
methods or procedures that enable their performance to be competitive, efficient and
effective, and to positively impact revenue, retention and reputation. Ultimately, global
enterprise desktop and notebook providers are judged on their ability and success in
capitalizing on their visions.

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Ability to Execute consists of the following criteria:
Product availability — product portfolio and range
Overall viability (business unit, financial, strategy, organization) — product quality and
availability, service and support, as well as the vendor's financial strength
Sales execution/pricing — the availability of special sales teams
Marketing execution — the vendor's market share in the global enterprise market
Market responsiveness and track record — ability to respond to changing market conditions
to achieve competitive success
Customer experience — the vendor's ability to provide support and services
Operations — factors that impact the vendor's ability to meet commitments
Environmental performance and capabilities, including supply chain and products
Completeness of Vision
This axis evaluates desktop and notebook vendors on their ability to convincingly articulate
logical statements about current and future market direction, innovation, customer needs and
competitive forces, and how well they map to the Gartner position. Ultimately, global
enterprise desktop and notebook providers are rated on their understanding of how market
forces can be exploited to create opportunities for the provider.

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Completeness of Vision consists of the following criteria:
Market understanding — mechanisms for customer feedback
Marketing strategy — the vendor's ability to provide various professional services
Sales strategy — the vendor's capability to work with customers through its sales force and
sales tools.
Offering (product) strategy — the vendor's strength in R&D and the capability of product
design, and the vendor's ability to offer image stability
Vertical/industry strategy — the capability of providing vertical-specific services
Innovation — product innovation, an approach to providing alternative application delivery
models and green IT solutions
Geographic strategy — the capability of providing products and services globally
Environmental programs, including sustainability goals and processes.
Quadrant Descriptions
Leaders
PC vendors in the Leaders quadrant register the highest scores on Ability to Execute and
Completeness of Vision. These vendors have wider geographic coverage, comprehensive

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sales organizations, financial stability, comprehensive customer support, broader product
portfolios, longer product availability and larger market presence, compared with vendors in
other quadrants.
Challengers
Challengers have high scores in Ability to Execute, but their Completeness of Vision scores
are not as high as those of the Leaders. Challengers often have a good market presence and
financial stability, but they may have less geographic coverage, or they lack an innovative
view of the products, compared with the Leaders. There are no Challengers in this Magic
Quadrant.
Visionaries
Visionaries have high scores in Completeness of Vision; however, their Ability to Execute
scores are not as high as the scores of vendors in the Leaders quadrant. Their market presence
may be less than that of the Leaders, and their financial stability may not be as solid. Also,
their sales organizations and customer support mechanisms may not be as comprehensive as
those of the Leaders.
Niche Players
Vendors in the Niche Players quadrant do not have high scores on both axes. They often have
a low market share, and their market coverage of different regions is limited. Many of these
vendors have a strong consumer PC business. It is important to note that a PC vendor's
position in this quadrant is not a value judgment on suitability, because that vendor may
specialize in particular areas in a vertical-market segment or have product portfolios in which
Leaders may not have much focus.
Context
This Magic Quadrant is designed to assist global enterprise customers in selecting vendors
that are able to supply a large number of PCs in multiple regions. The results of this analysis
combine evaluations of the vendor attributes that matter most to global enterprise customers
when selecting PC suppliers. The attributes we evaluated include product portfolio, global

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capability, financial health, account management, service and support. This Magic Quadrant
covers both global enterprise notebook and desktop vendors. In cases where a vendor does
not provide desktop systems, we have called it out in the cautions and factored it into the
vendor's position on the Magic Quadrant.
Each vendor's position is accurate for the factors included in this analysis. Clients should
assess their priorities and apply these while performing due diligence as part of the vendor
evaluation process. It is not uncommon for clients with unique requirements to find that a
lesser-known vendor is best-suited to meet their needs.
The Magic Quadrant for Global Enterprise Desktops and Notebooks will be updated each
year to reflect changes in market dynamics. We evaluate a vendor's position based on:
The quantitative parameters we obtain from vendors through a questionnaire response
A qualitative analysis based on vendor interviews
Subjective evaluations based on extensive feedback from Gartner clients and scores given by
each of Gartner's user-facing client computing analysts against a range of criteria
Market Overview
Global organizations are not necessarily very large enterprises with tens of thousands of
users, and yet they have specific requirements that pose unique challenges to PC suppliers.
For global enterprise customers, price is an important consideration, but not usually the
primary purchase criterion. Instead, the purchase decision process considers various factors,
including the ability to provide appropriate services and to support global deployments.
Working with desktop and notebook vendors that can meet these requirements helps reduce
the total cost of PC ownership.
The PC market is a mature market, and we continue to see signs of potential consolidation.
Attributes that we capture in this Magic Quadrant include the commitment to the enterprise
market by established professional PC vendors and the likelihood that consumer players will
expand on their global enterprise capability. Because most corporate customers have moved
to a single-supplier strategy for purchasing their PCs, we put a high value on the breadth of
products that are supported by a strong channel network. Gartner regards global presence as a

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significant criterion for evaluating potential PC suppliers. The Leaders in this Magic
Quadrant are all international vendors that can provide consistent products and services
across multiple regions. Some of the players are global, but without enterprise account
management capabilities and/or explicit stable platform programs. Although smaller vendors
can also play effectively in the enterprise PC market, lack of global capabilities for delivery
and/or support would put them into a Niche Players or Challengers position. Some smaller
players specialize in specific vertical markets.
During late 2011 and 2012, the corporate PC market has been challenging to many of the
players. While the PC replacement cycle has continued to prop up overall corporate unit
sales, competition in the PC market is fierce, and many PC makers have been struggling to
maintain the discount levels offered in previous years. As in 2011, we continue to see
instances where the attributes that qualify a PC as a business-class model — which include
elements such as long image stability, long product life cycles and a three-year standard
warranty — are eroded and shortened by vendors to maintain margins. At the same time, the
effects of supply disruptions caused by natural disasters (for example, Japan earthquakes and
Thailand flooding) have created serious challenges in product delivery and exposed the
differences in vendor supply chains.
Looking forward, the PC market is undergoing significant upheaval as traditional enterprise
vendors compete with consumer offerings and new classes of device for the IT budget. New
players are jockeying for position in the enterprise environment, but few have made
significant inroads as of yet. We do include several players whose main focus is on the
consumer PC market, and we are constantly monitoring others to see whether they meet our
inclusion criteria. Moving into 2013, the rising interest in mobile devices and tablets will
provide opportunities for PC makers to innovate with new form factors, but also will create
risks for those who can't provide the right balance of quality, price and differentiation.
Although we haven't considered tablets as part of this year's Magic Quadrant, we have
adjusted the weighting around innovation and the overall approach to the mobile market to
reflect the growing importance of this part of the market.
The relative positions of the vendors have remained mostly stable this year, as you would
expect from a mature market:
Lenovo has moved up with respect to its Ability to Execute, reflecting its surging market
position.

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Fujitsu has seen some small improvements in its Completeness of Vision and Ability to
Execute, mostly because of improvements in its global capabilities.
Dell has seen some improvement on Completeness of Vision but has seen its Ability to
Execute eroded throughout the year by some inconsistent customer support and less-
competitive pricing.
HP's position has remained relatively unchanged from last year, as improvements in
organizational stability have been balanced by issues with global account management.
Some minor movement of other vendor positions has occurred as a result of adjustments to
the weighting of various metrics (as noted above) and does not necessarily reflect changes in
the vendor's approach to the market or capabilities.
Recommendations
The following recommendations have been made to address their key issues that are
impeding their profitability: increase advertising and sponsorship, maintain a strong presence
in China, pursue outside markets and consider future acquisitions. Implementation of the
recommendations will give Lenovo the strength it needs to compete with their competitors.
Increase Advertising
Lenovo has already taken several steps to increase its brand awareness outside of China, such
as sponsoring the Olympics, an event that ensures advertisers that their message will reach a
global audience. Unfortunately for Lenovo, that is not enough, as many people still have not
even heard of them.
Lenovo hired former Apple and HP executive David Roman earlier this year. Mr. Roman
was responsible for the famous HP “The computer is personal again” advertising campaign.
Lenovo should use this man who has so much experience to their advantage. HP’s
advertisements featured well-known celebrities using HP computers in stylized television
commercials and magazines. Lenovo should put Mr. Roman in charge of a fresh advertising
campaign that should be distributed to their most promising markets outside of China. At

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the moment Lenovo is making more than twice as much revenue in mature markets like
America and European countries, than in their emerging market segment. People in mature
markets are more likely to have access to televisions and purchase magazines than those who
live in less developed areas, and Lenovo’s ads have a greater chance of being seen there. For
this reason Lenovo’s forecasted advertising budget has been increased in order to pursue this
new strategy. This is reflected in the selling and distribution expenses section of the income
statement. It may take some time before the full impact of these ads are realized and benefit
Lenovo’s net income. The important aspect of this advertising campaign is to get Lenovo’s
name to reach a wider audience, not to increase profits immediately.
Increase Sponsorship
In order to increase brand awareness and capture the global market, Lenovo should form a
partnership with ESPN. ESPN is known as the worldwide leader in sports entertainment.
They will be able to provide Lenovo with the opportunity to increase brand awareness in the
United States as well as in other areas of the world. ESPN televises 65 sports in 16 languages
in more than 200 countries (ESPN, 2010). They will be able to increase Lenovo’s market
share globally with an emphasis on the values their company possesses.
Lenovo has a reputation for sponsoring sports. They sponsored the Winter Olympics in 2006,
Summer Olympics in 2008 and they continue to sponsor the Vodaphone McLaren Formula
One Race team. Forming a partnership with ESPN will only enhance their association with
sports and they will reach a much larger audience.

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Lenovo will be able to provide ESPN with the technological equipment they need to perform
everyday business activities including computers, servers, software updates, and even website
assistance. In return, ESPN anchors will use Lenovo laptops live on Sports Center when
broadcasting. ESPN will benefit from being provided with up-to-date technology and Lenovo
will benefit from ESPN by increasing their brand image all across the nation. ESPN could
also have a sports segment, featuring “New World Sports,” showcasing sports from around
the world and could be “brought to you by” Lenovo. This could increase international sports
exposure along with Lenovo computers to ESPN viewers.
Not only would this partnership open up doors for Lenovo to expand into the United States
and other countries, but this will also benefit ESPN in becoming more popular in China. In
order to carry out this partnership Lenovo’s sponsorship expense will increase, which is also
reflected in the selling and distribution expense in the forecasted income statement (Refer to
Appendix E).

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Strong Presence in China
Lenovo is currently the number one PC manufacturer in China, and their growth rate is about
1200 basis points higher than the Chinese industry average. They should carefully watch
their two main competitors, Dell and HP, on their home front and make sure they stay ahead.
Lenovo currently owns a 28 percent market share in China, which is about three times more
than Dell and HP which hold the number two and three positions respectively. These two
companies will most assuredly try to increase their own brand awareness to Chinese
consumers to become more of a household name and increase their sales. Lenovo should try
to diffuse their efforts as much as possible through counter advertising (refer to advertising
recommendation page for markets outside of China). Their ads should emphasize that they
are a Chinese company and garner some national pride among their Chinese customers. It
should also include references to their superior customer service awards so that they become
established as a reliable, helpful company that keeps their customer’s needs in mind.
This year Lenovo was among the top 10 winners of the fifth annual rankings for Best
Customer Service in China, an event that is widely considered to be the benchmark for
evaluating customer service in the country. They won awards for providing exemplary
customer service practices and also for best service innovation. Liu Chuanzhi, chairman of
Lenovo Group, also won a prize for outstanding leadership in customer service (China Daily,
2010). It is important for Lenovo to maintain this prestigious position as it will help
differentiate itself from its competitors and build brand loyalty for its customers. If they
continue to pursue a customer-driven marketing strategy, then their reputation will grow,
more consumers will find them attractive, and they will keep their current customers coming
back time and time again, producing high customer equity. A good reputation is a valuable
intangible asset that breeds word of mouth advertising that rakes in more potential customers.

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Increase R&D
In an effort to better compete with competitors, we recommend that Lenovo increase their
research and development costs to 3 percent of their annual revenues. In the past 3 years,
Lenovo has allocated between 1.3 and 1.5 percent of revenue. This boost in R&D will ideally
open up the grounds for better, more innovative products that will out-perform competitors.
Currently, Lenovo is among the lowest of HP, Dell, and Apple in terms of R&D, mostly
because of the sheer size of their competitors. An increase of about 1.5 percent will be a
drastic change. Over the next five years, Lenovo will be spending over $1 billion per year on
R&D. In addition, we are confident that the increase in R&D will allow Lenovo to control
more of their pricing due to the differentiation of their innovative, superior product line. This
will increase gross margin, allowing Lenovo to reach much higher profits, than with their old
allotment of R&D. In 2015, Lenovo could see a net profit of $631 million, $180 million
larger than the forecasted net income for 2015 without the increase of R&D. As a result of the
increase, we expect Lenovo to see a constant 5 percent additional revenue growth per year for
the next five years. However, holding all else equal, Lenovo could experience a slight drop in
net income in 2011, but the other recommendations will balance the loss until drastic
innovative measures can take place.

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Acquisitions & Mergers
Mr. Yang Yuanqing, the CEO of Lenovo, hasn’t identified any suitable acquisition targets
recently. “There currently are no opportunities for mergers and acquisitions,” he said.
“Acquisitions are an important means of expansion,” but buying opportunities could surface
when market prices are “more rational,” he said (Chao, 2009). Now may not be Lenovo’s
time for acquisitions, but the company should keep its eyes open towards the near future.
Even though Lenovo is the fourth largest PC manufacturer in the world, there is a large gap
between it and its larger competitors in terms of revenues, assets, and size in general (see
graphs on page 31).
Should any smaller company come out with a cutting edge product or technology, Lenovo
should consider buying the company and adding the new innovation to Lenovo’s repertoire.
The same goes for any other relevant company that would be willing to sell itself for a
reasonable price. If Lenovo purchases these smaller companies wisely, then they will
become one step closer in catching up with, and ideally surpassing its bigger rivals.
One popular movement that is taking the technology world by storm is the concept of cloud
computing. Lenovo President and COO Rory Read said “There’s no doubt there’s going to
be a continuous evolution of ubiquitous connection to data and applications. We saw it
happen with the Internet. It created a ubiquitous connection point for data. What’s happening
now with this convergence movement is now data and applications can move across the
Internet and be accessed through that ubiquitous connection point. You can call it cloud

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computing… What’s more important is that now data and applications can be connected and
be more easily accessed across a number of different devices” (Wright, 2010).
Lenovo should seriously consider acquiring one, or several, of the many new-born cloud
companies. Clouds will be involved with many of Lenovo’s wide range of products. If they
control their own cloud company, Lenovo can avoid paying for any associated cloud service,
and keep up to date with any advancements in the field.
Increase Operations
Studies show that Lenovo should pursue outside markets and increase operations. These
recommendations will allow Lenovo to lower gross profit pressure resulting in higher
revenues. Lenovo has placed these goals in their sites, and have put them in a position
capable of being achieved. To do this, Lenovo must continue to use the revenues from the
PC market in China to fund the pursuit of outside markets while they can. Lenovo should
implement a customer service unit that will help its customers with software and technical
difficulties. This customer service recommendation will establish a great customer
experience and help spread the Lenovo brand name to emerging and mature market
segments. Also, Lenovo has made cuts in areas such as work force, distribution expenses,
and research and development expenses. The company must continue to be aware of costs
and not allow unnecessary costs to be reacquired. Lenovo will continually look at ways of
simplifying its business processes from product development to supply chain, to sales to
remain competitive in an increasingly competitive marketplace.

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Conclusion
Lenovo is in a position to be very successful in the PC market. Their addition of the LePhone
and their historically successful IBM computer line has kept their company among the best
technology companies in the world. Research shows however, that there are certain aspects of
the business that need attention in order to combat their fierce competitors including: a weak
global brand image, little control over price, and innovative products. Recommendations have
been made to improve these aspects of the business such as: increasing research and
development costs to be more innovative, increasing advertising to better Lenovo’s global
brand image, and increasing operations to increase their gross margin and turn a larger profit.

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