Lenovo Case

Lenovo Case

Where did it originate? Who were the major players?

IBM started in California around 1981, along with HP, Apple, Dell, Legend (Lenovo), Compaq, Gateway, Emachines, Toshiba, Acer

Apple and Compaq started against IBM and started computer wars

What happened with consolidation?

HP acquired Compaq, Gateway acquired Emachines, 5 held 50% (Dell, HP, Lenovo including IBM, Acer, Fujitsu) rest of 50% was held by small companies

Buying

How did Legend start?

Govt gave Chinese Academy of Science money to sell computers within China

Legend Chinese character card that translated English language

Attached to mother board to save hard drive space

Yang do differently after he became gm?

Eliminates sales force and cuts price close to COGS

Legend Owned China than what happened in 2001?

Dell intro direct sells model in China challenging PC market they were in (decrease in market share)

China entry into WTO

What happened to Legend name?

Registered under several other global markets so they had to search for new name Le-from legend, novo Latin for new

Easier to pronounce

How did Lenovo and IBM come together? Why would IBM sell?

Both good at something specific, IBM wanted to account for loss and get into Chinese market

Acquired IBM’s personal systems division, annexing all IBM’s PC operations for $1.75 billion

Opportunity to shed unprofitable operation and concentrate on consulting services and middleware solutions

How valuable were the ‘Think’ brands? How could Lenovo use them? (Ex. 4)

By 2004 sold over 20 million Think pads which was introduced in 1992 out of 100 million sold including desktops and notebooks

Quality product, capitalize with IBM name

Beware of Lenovo ‘Chinese’ name-perhaps not the best (perception)

Country origin effects-positive or negative, political ramifications

Use ‘umbrella’ to sneak products out to customers in five years

How difficult would it be to separate IBM from ThinkPad in the market’s mind?

IBM...