Lenovo Brics Expansion
Lenovo Reboots
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The Chinese PC maker has bounced back by focusing on emerging markets. Now, can it make some real money?
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The Chinese PC maker has bounced back by focusing on emerging markets. Now, can it make some real money?
LENOVO GROUP CHAIRMAN YANG YUANQING WAS WORKING AT the company's North Carolina offices and spending a good deal of his time studying English and taking executive courses when his longtime mentor, Lenovo founder Liu Chuanzhi, urged him to return to Beijing and retake the helm as CEO of the personal computer maker.
It was February 2009, and Lenovo was stumbling badly on its way to posting a $226 million loss for the financial year ended March 31,2009. The deficit was an embarrassing setback for a company that only four years earlier had acquired IBM Corp.'s personal computer division for $1.75 billion in one of the boldest attempts ever by a Chinese company to establish itself as a global brand. Liu and Yang, as chairman and CEO, respectively, of Lenovo's owner, Legend Holdings, had recruited William Amelio, former head of Dell's Asia-Pacific operations, to serve as chief executive. The combination of Chinese financial and manufacturing muscle with American management and technology seemed like a sure winner.
The result was much different, though. Lenovo had acquired a deteriorating, high-cost business whose weaknesses were exposed brutally when the financial crisis triggered a global recession in late 2008. Major corporations slashed information technology budgets to cut costs, hurting companies like Lenovo, whose ThinkPad line had dominated the commercial PC market. Lenovo was late to enter the consumer segment, where rivals like Apple, Hewlett-Packard Co. and Taiwan's Acer prospered with sleek new models and strong marketing. The company would need major surgery to stanch the red ink and restore growth.
Replacing Amelio as CEO, Yang immediately set out to reshape the business. He laid off
Contents
The Chinese PC maker has bounced back by focusing on emerging markets. Now, can it make some real money?
Listen
Select:
CORPORATIONS
The Chinese PC maker has bounced back by focusing on emerging markets. Now, can it make some real money?
LENOVO GROUP CHAIRMAN YANG YUANQING WAS WORKING AT the company's North Carolina offices and spending a good deal of his time studying English and taking executive courses when his longtime mentor, Lenovo founder Liu Chuanzhi, urged him to return to Beijing and retake the helm as CEO of the personal computer maker.
It was February 2009, and Lenovo was stumbling badly on its way to posting a $226 million loss for the financial year ended March 31,2009. The deficit was an embarrassing setback for a company that only four years earlier had acquired IBM Corp.'s personal computer division for $1.75 billion in one of the boldest attempts ever by a Chinese company to establish itself as a global brand. Liu and Yang, as chairman and CEO, respectively, of Lenovo's owner, Legend Holdings, had recruited William Amelio, former head of Dell's Asia-Pacific operations, to serve as chief executive. The combination of Chinese financial and manufacturing muscle with American management and technology seemed like a sure winner.
The result was much different, though. Lenovo had acquired a deteriorating, high-cost business whose weaknesses were exposed brutally when the financial crisis triggered a global recession in late 2008. Major corporations slashed information technology budgets to cut costs, hurting companies like Lenovo, whose ThinkPad line had dominated the commercial PC market. Lenovo was late to enter the consumer segment, where rivals like Apple, Hewlett-Packard Co. and Taiwan's Acer prospered with sleek new models and strong marketing. The company would need major surgery to stanch the red ink and restore growth.
Replacing Amelio as CEO, Yang immediately set out to reshape the business. He laid off