Lenovo's Fortune 500 Dream

After becoming a leader in China's electronics industry, Lenovo chose the goal of "ranking among the world's top 500" to motivate itself to move forward. The failure of the three-year plan put Lenovo in an embarrassing situation for its next development. In this case study, the users of the CEConline website made suggestions for Lenovo's future in terms of strategic goals, core competitiveness, internationalization strategies, and talent allocation.

Adjusting strategic goals

In Lenovo's three-year plan to become one of the world's top 500 companies, it needs to reach a business scale of 60 billion yuan in 2003, a figure that almost requires doubling of output value every year. To add a Lenovo of the same scale every year, for a company that is already in the leading position in the industry, the difficulty can be imagined. Most website users questioned that the growth rate of a business is not determined by management, and if there is no practical strategy and implementation measures, the rush to achieve results will fail.

"The cow from my hometown" from a refrigeration equipment company in Foshan believes that the top 500 is only a result, not the goal of the company, and it is not enough to become the strategy of the company. "Hunan Laogao" and "Liao Zhuangjia" of a communication equipment company in Guangdong also agreed that Lenovo's planning should focus on how to use its greatest advantages to strive for profits, not the pursuit of the title of the top 500. "This in itself is a Wrong." In order to enter the bottom line of the Fortune 500, decision-makers hastily launched mobile phones, digital cameras and other seemingly lucrative products, but they did not reflect Lenovo's advantages, but fell into the quagmire of multi-line battles. This is because when deciding on the business direction, the management did not have a detailed forecast of market prospects externally, nor a careful self-strength analysis internally, which showed Lenovo's lack of ability in strategic choices, which directly resulted in low resource utilization, and Unreasonable input and output.

Judging from the actual growth of Lenovo's output value of 26% in three years, the average annual growth rate is only 8.67%, which is quite different from the growth target. The "bell well frog" of a pipeline company in Zhengzhou suggested that the management should review and adjust the strategic goals in a timely manner, and reflect on whether the company's existing resources and conditions are sufficient to support it.

Return to core products

The three major systems that Lenovo has chosen to diversify development path are not ideal today. Not only is it forced to withdraw from the server field, the original core PC business is also growing slowly amid fierce competition. The "Explorer 2003" of an import and export company in Chongqing pointed out that Lenovo has not had its own uniqueness in product technology until now. Just a processing and assembling company. When world-renowned large companies that have mastered core technologies such as PCs, mobile phones, and digital cameras enter China one after another, Lenovo will face even more formidable challenges.

Website users believe that the key for Lenovo to become bigger and stronger is to establish its own core competitiveness. Whether it is technology, marketing or service, if it has a part that is difficult for others to imitate or surpass, success is just around the corner. Among them, most agree that Lenovo should strengthen its investment in the traditionally strong PC business.

The view of "the little blue flower's younger brother" of an investment consulting company in Xi'an is quite representative. He said that in the current situation of Lenovo, it should not expand, but shrink its product line. From the group level, fully integrate resources, focus on one or several core products, and do not rush for quick success. The first is to firmly stabilize the established good PC business status. Build core competitiveness by improving product quality, maintaining the best price-performance ratio, and continuing to improve a good service quality system. "Otherwise, being surpassed by others in the most traditionally advantageous PC aspect is likely to be a precursor to Lenovo's failure." In terms of products, Lenovo's technology does not have much awareness among consumers. It is suggested that another innovative brand can be considered, and the market positioning can be lowered at the same time, so that the sales performance can be improved by increasing the volume, and it will not affect the leading position of Lenovo PC in China.

The "dxz" of an electronics company questioned Lenovo's initiative to abandon the field of ordinary servers. He believes that the server is an important pillar of PC applications. In the Internet age, computer sales are expected to grow exponentially, resulting in a rapid increase in sales. In this case, we should pay attention to the research and development of the server from the technical strategy, so as to promote the realization of the competitiveness of the core product PC sales.

Accumulate international experience

In the eyes of most website users, Lenovo's choice to enter the international market is imperative. But at present, from the perspective of the number and depth of international projects, it is far from enough. And Lenovo's decision-makers' lack of understanding of the international market has also caused the strategic choice of entering the international market to be discussed.

"Liao Zhuangjia" pointed out that the replacement of the "Legend" trademark with "lenovo" was only a superficial logo replacement. The company did not take this opportunity to focus on promoting Lenovo's core concepts and brand values, nor did it convey a clear internationalization Lenovo's image.

He suggested that Lenovo should, on the one hand, take good care of its own brand products and strive to establish a brand personality in the international community; on the other hand, it can also take advantage of domestic cost advantages to do OEM and ODM for overseas industry giants. In this way, it can not only strengthen the contact with overseas markets and accumulate international experience, but also improve its management and technical level, and finally defeat the opponent by learning from the opponent.

Lenovo is still adhering to the principle of employing people based on internal promotion, which indeed restricts its rapid development to a certain extent.

"Liao Zhuangjia" believes that if there is no good talent competition system, rigorous assessment methods and effective management measures, the phenomenon of "inbreeding" such as the placement of cronies and nepotism will become popular within the enterprise, and there are real Talented people will be squeezed out.

The suggestion from website users to Lenovo is that both internal training and external recruitment are the guarantee for the formation of a healthy talent echelon, so a large enterprise should also have an tolerant attitude towards talents. If a set of unique corporate culture and internal operating rules have been formed, it is difficult for the "Airborne Soldiers" to integrate for a while, then a group of high-level management elites can be invited as "outer brain" consultants to assist the group in evaluating the existing management. The ability of the team and the implementation of indirect management. In this way, internal conflicts can be reduced to a certain extent, and replacement can be considered when the time is right.

"Zhongjing Frog" analyzed that both external and internal training of employees have their own advantages and disadvantages. Lenovo might as well learn from Zeng Guofan's method of sending 100 young children to the West to learn advanced science and technology, select the backbone internally, and provide them with a development path of: learning-practice-re-learning-re-practice, and cultivate a group of people who are familiar with Lenovo's environment. , and a reserve echelon with a global vision.

This article was compiled by Celine Wei. For more case studies and online discussions, please visit the CEConlines website (www.cec.globalsources.com).