The Hindu : Business : Lenovo to replicate China business model in India

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Wednesday, Jul 15, 2009
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Lenovo to replicate China business model in India

Ramnath Subbu

To build more core channels to have higher share
Focus will remain on personal computers in India

— PHOTO: VIVEK BENDRE

FOCUS ON EMERGING MARKETS: Yang Yuanqing (right), Chief Executive Officer, with Chen Shaopeng, Senior Vice-President, Emerging Markets, Lenovo, addresses a press conference in Mumbai on Tuesday.

MUMBAI: Chinese personal computer giant Lenovo has aggressive plans for its global business and is looking at its India operations to lead its thrust in emerging markets.

Addressing a Business Roundtable, Yang Yuanqing, CEO, Lenovo Group, said, “We restructured our global business into emerging markets and mature markets. We will attack the growth opportunities in emerging markets, particularly India, and want to attack global transactional opportunities in mature markets in small and medium businesses (SMB) and consumer business”.

Lenovo, which acquired IBM’s personal computing division in 2005, has evolved a ‘half moon’ strategy for its emerging markets business which constitutes China at the base of the half moon with Russia, Middle East, Eastern Europe, India, Hong Kong, ASEAN, Korea and Africa along the curves.

The company is banking on its three core competitive strengths. A unique dual business model which allows it to serve both the relationship (long term clients) customers like public sector companies and transactional/ SMBs. In India, Lenovo is strong in the relationship segment while the transactional segment “is an empty area to explore”.

“Secondly, we have the leanest cost structure because we have a base in China which helps us to manage costs. We will replicate our Chinese business model in emerging markets”.

“Thirdly, we have a great history of innovation and we are the leading company with our growing portfolio of ‘Idea products and Think products’,” said Mr. Yang.

On the Indian market, he said, “You could never afford to miss this market. But if we want to win in this market, we must have a stable leadership team which we now have. We need to focus not only on short term results but also on building core competence. A culture of commitment and ownership and not of only professional or management culture is needed”.

Mr. Yang felt that having the right product portfolio was very important. “We want to build more core channels to have a higher share of the wallet here”. Lenovo’s focus would remain on personal computers in India. Though Lenovo has a good phones business in China, it would be computers first in India, he said. Amar Babu, Managing Director, Lenovo India, said the company was present in 350 Indian cities and aimed to cover all the 580 districts this year.

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