Since April 1, 2014, Lenovo Group has established four new, relatively independent business groups, namely PC Business Group, Mobile Business Group, Enterprise Business Group, and Cloud Services Business Group. . Now I will unravel Lenovo's business strategy for everyone, I hope it can help you.
Lenovo's business strategy
In 1984, Liu Chuanzhi and others established the New Technology Development Company of the Institute of Computing Technology, Chinese Academy of Sciences (the predecessor of Lenovo Group) with 200,000 yuan as starting capital. After more than ten years, Lenovo Group started from trading to manufacturing computer supporting products and complete machine assembly, and now it has become the largest computer production group in China. In 1998, Lenovo Group's sales revenue was 17.1 billion yuan, equivalent to 2.1 billion US dollars. In recent years, Lenovo Group has proposed an Internet development strategy, which is to build products and services with the network as the core, transforming itself from a computer function integrator to an Internet service provider. This means that Lenovo has entered a development process from specialized operations to diversified operations.
1. From trading to manufacturing computing and supporting products
When Lenovo Group was founded, it was just an inconspicuous "little brother" among many electronic companies in Zhongguancun, including Liu Chuanzhi, the current chairman of the group. In order to raise some start-up funds for the company, a dozen or so former researchers from the Institute of Computing Technology of the Chinese Academy of Sciences also followed the example of other companies and invested in electronic watches and roller skates.
However, after all, they had just put down their books, and these researchers and associate researchers still knew nothing about the business world, and as a result they lost their money.
Having no other choice, Liu Chuanzhi led everyone to sell vegetables in front of the Computing Institute for two months, and finally made money back.
Once, Liu Chuanzhi and others learned that the Chinese Academy of Sciences was going to equip various research institutes with a batch of computers, totaling 500 units. They needed someone to pick up the goods, install them, inspect them, ship them, train them, and maintain them.
Companies in Zhongguancun flocked to the business, and Liu Chuanzhi snatched the business at the lowest price.
Assembling 500 computers requires a large space. Lenovo does not have its own space or factory buildings, so it has to shamelessly borrow empty rooms from other institutes of the Chinese Academy of Sciences to save some rent. Sometimes people want to use the house, and they have to use it. We have to make room for others quickly. There was no money to buy transportation, so Lenovo people, regardless of gender, went into battle together, carrying it on their hands or on their shoulders?
In this way, Liu Chuanzhi led the first generation of Lenovo people to win the first place with sweat and even blood and tears. The money? 700,000 yuan and 60,000 US dollars, started a new journey.
Regarding the future development of Lenovo at that time, many people believed that it could follow the common practice of ordinary companies and mainly undertake the "processing work" in the society based on general trade.
Liu Chuanzhi believes that since it is a company owned by the Institute of Computing Technology of the Chinese Academy of Sciences, why can't it use the strong scientific and technological strength of the Institute of Computing Technology to mainly develop, develop and sell its own products?
In the mid-1980s, a large number of computers entered China. However, the operating systems of the computers at that time were in a Spanish-language environment. After many enterprises and institutions bought the computers back, they were very inconvenient to operate, which caused great obstacles to the promotion of computers. Liu Chuanzhi believes that whoever can solve the problem of computer Chineseization will have a landmark significance for market development. At the same time, companies that produce such products will also make a lot of money.
Under his pressure, Lenovo gave up many business projects and devoted all its energy to the development of Lenovo Hanka, and achieved great success. By the end of 1987, Lenovo's assets had reached tens of millions.
2. Develop export-oriented products to enter overseas markets
In April 1988, with the strong support of the leadership of the Chinese Academy of Sciences, Hong Kong Lenovo Computer Co., Ltd. was established. Lenovo took this as a turning point , embarked on the road of international operation, and sold the computer motherboards and add-on cards developed and produced by itself to the European and American markets.
(1) Overseas industrial development strategy of "The blind man carries the lame man"
The so-called "The blind man carries the lame man" means complementary advantages. Hong Kong Lenovo has three shareholders: one is China (Hong Kong) Technology Transfer Company, one is the original Hong Kong Daoyuan Company, and the other is Lenovo Group. Each of the 3 companies has its own advantages. China Technology Transfer Corporation is invested by several large companies with great financial strength, including Bank of China Group, China Resources Group, China Everbright Group, China Insurance Company Group and China Patent Company Group, and can provide a solid source of payment. Daoyuan Company is a computer company founded by several young people in Hong Kong who graduated from the Computer Science Department of the University of London in the United Kingdom. They have several years of business experience in the European and American markets, understand the market conditions, and are familiar with import and export channels. The outstanding advantage of Lenovo Group is that it has strong technical talent and a vast domestic guaranteed market. Lenovo Group has more than a hundred outstanding computer professionals in China, forming a strong technological development force; it has an experienced sales team with 19 branches, established a nationwide sales network, a training center and 36 technical maintenance stations form a training system and maintenance service system supporting Jackie Chan; there are also pilot plants and a stable production base, which have become a strong backing for Hong Kong Lenovo Company. Lenovo compares this kind of cooperation to "a blind man carrying a lame man".
Lenovo Group is equivalent to a strong "blind man" in the mainland. The body is very strong, but where can it enter the international market? The road cannot be seen clearly. However, Hong Kong Daoyuan Company is a bit like a "lame man", with sharp ears and eyes and flexible movements. However, its technical strength is weak and it lacks competitiveness in the European and American markets. The blind man carrying the lame man can form complementary advantages.
In terms of industrial structure, Lenovo has also made full use of the principle of complementary advantages. Hong Kong is a window for international trade and is suitable for research, development and trade, but land and labor are expensive. Therefore, Lenovo placed its large-volume computer production base in the inland areas of Shenzhen and Zhuhai, while its sales focus gradually shifted to Europe and the United States. Such three points and one line form an industrial structure with a combination of advantages, allowing enterprises to join the competitive ranks of the world's computer industry as soon as possible.
(2) "Tian Ji's horse racing" style overseas research and development strategy
During the Warring States Period, there was a man named Tian Ji in the Qi State who raced a horse with King Wei of Qi, and lost three times in three battles. Later, under the guidance of Sun Mo, he changed his offensive strategy. He used the upper horse to fight the middle horse, and then used the middle horse to dismount him. In the last three games, he won two. In the late 1980s, the 286 microcomputer had a very broad market in Europe and the United States, and at that time the market was mainly filled with products from Taiwan, China and South Korea. Lenovo believes that it can compete with them based on its own strength. Technically speaking, 286 falls within the range of China and Malaysia in the international market, but Lenovo must come up with an upper horse to compete with them. That is to say, Lenovo has spent relatively abundant funds and first-class technical talents headed by Ni Guangnan, used advanced design ideas, and selected internationally accepted, most integrated, and latest-produced components to make the products designed by Lenovo The machine has become a superior product, with performance far superior to local products in Taiwan, South Korea and Hong Kong. In terms of product form, we should start with the development of board-level products instead of developing the whole thing from the beginning; in terms of competitors, we should avoid strong players such as the United States and Japan and first compete with manufacturers in Hong Kong and Taiwan. In other words, Lenovo uses its own higher-level scientific and technological personnel to develop mid-range products, and first competes with Hong Kong and Taiwan manufacturers for the market. It is like using high-grade horses to compete with other people's inferior horses in horse racing. It is easy to gain an advantage and ensure You will win the first battle. In this way, Lenovo finally squeezed into the international market.
(3) Moutai and Erguotou’s overseas sales strategy
Moutai is China’s first-class famous liquor, while Erguotou is a popular product that everyone can afford. Lenovo's products are produced by technicians after careful analysis of various types of microcomputers in the world, using the most advanced design ideas and the latest internationally accepted components. They are top-notch products among similar products, equivalent to Moutai. In order to improve the quality of the products, we placed large-volume production bases in the inland coastal areas and worked hard to reduce costs so that they could be sold at the price of "Erguotou". Only by relying on such high-quality and low-priced products can an unknown company enter the overseas market.
To implement the sales strategy of "Moutai quality, Erguotou price", there must be several guarantee conditions: First, it must be able to afford the compensation. Without the support of trade income, Lenovo will not be able to let go of Hong Kong and Taiwan. Manufacturers compete on price. Second, the development of high-end products must keep up. When the 286 microcomputer motherboard was put on the market, Lenovo had already begun the research and development of 386 and 486 microcomputers. Without the ability to develop high-end products, it would not dare to ask questions with the 286 microcomputer, otherwise it would just It could be a loss-making business. Third, the most important point is to ensure the high quality of the product. Only by ensuring the quality of "Moutai" and the price of "Erguotou" can it attract users. If it is the quality of "Erguotou" and the price of "Erguotou", it will be difficult for strong players such as Ru Lin. Not only are they unable to compete in the international market, they are even unable to survive. It is precisely with this correct sales strategy that the company's reputation is getting higher and higher, and the market is getting bigger and bigger. At that time, Lenovo Group's sales revenue from domestic and overseas markets was roughly 46%, or 40% came from the international market.
3. Producing complete computers to occupy the domestic market
In 1990, Lenovo Group launched its own brand of commercial computers in China, and later launched home computers, printers, servers and other products. products and became a famous manufacturer of complete computers.
This strategic decision made by Liu Chuanzhi gave Lenovo an advantage in future competition with foreign companies. Before 1992, China's computer market was small, with an annual demand of less than 200,000 units. At that time, foreign businessmen's strategies for the Chinese market were basically in the pure product export stage, that is, selling the computers they produced to mainland China through export companies. Lenovo has established a firm foothold in the market with its advantages in product quality and service. In 1995, Lenovo's computer sales increased from 45,000 units the previous year to 100,000 units. At the same time, the credibility of the Lenovo brand is increasing day by day, and it has successively won awards such as "The Most Popular Computer by Consumers" and "The Most Popular PC by Consumers". Based on this, Lenovo has successively taken price cuts and launched a campaign to comprehensively expand domestic market share.
In 1996, Lenovo lowered the prices of various series of computers three times, with price reductions ranging from 8% to 30%; in April 1998, Lenovo's commercial desktop computer prices were fully lowered, with an average reduction of 16%. %; On June 1, 1998, Lenovo took the lead in adjusting product prices in conjunction with component price changes, with an average price adjustment range of 15%.
In early 1999, a Lenovo computer equipped with a Pentium II chip was priced at US$1,200. When multinational companies are forced to cut prices, their production and logistical support costs cannot be compared with Lenovo's. In 1997, Lenovo's share of the Chinese market surpassed IBM's, which had been the dominant player for many years, for the first time, and then expanded its share to 15.2% in 1998, while IBM's share was only 6.4%.
Why does Lenovo dare to cut prices? Its experience can be summed up as nothing more than expanding the scale of production and obtaining economies of scale; improving management levels, shortening the inventory cycle, and making capital flow effective. But Lenovo people's interpretation of it is different:
Lenovo's corporate management model comprehensively adopts the MRPⅡ model popular in American business circles and the JIT model popular in Japanese companies. Regarding the control of the production site, Lenovo's management is very unique. They changed the traditional production process from the front process to deliver goods to the back process, and changed the back process to pick up the goods from the front process according to the order. How much does the back process require? The quantity is supplied according to each process, and the entire process is supplemented by strong quality supervision, striving to get closer to the highest production level of "zero inventory", "zero waste", and "zero scrap", and reduce production and management costs.
? Lenovo adopts a large-area one-level agent approach in China in order to shorten marketing channels, which not only allows products to be delivered from manufacturers to users faster, but more importantly, reduces sales costs. This large-area first-level agent reduces the distribution cycle of Lenovo computers to two weeks. From this point of view, it only takes one month for Lenovo computers to store materials and deliver them to users, while foreign brands reach Chinese users. On hand, it will take at least 3 months. In other words, Lenovo's model has a time advantage of up to two months compared to foreign models, and two months means that in the computer industry, component costs can be reduced by 20% to 30%.
Use the management method of "small steps and fast running" to determine the timing of purchasing raw materials. Since the computer industry is an industry that develops rapidly and products are updated almost every second, its components have regular price cuts more than twice a year. In order to reduce the risk of component price cuts, Lenovo people first assemble those components whose prices do not change much, and components whose prices vary greatly are bought and installed before leaving the factory to reduce losses caused by price changes.
?The reason why Lenovo’s computer sales rank first in the domestic market is not just low price, but more importantly, excellent performance-price ratio. Lenovo promises to the people: to bring the world's most advanced technology to the Chinese market at the earliest mainstream prices. It was Lenovo's "Ten Thousand Yuan Pentium Campaign" that quickly upgraded the mainstream products in the Chinese computer market from 486 to Pentium, and at the same time made the situation of foreign brands dominating the Chinese market a thing of the past. In order to allow Chinese people to truly make good use of computers, we must meet their computer needs at the most economical cost. In 1990, Lenovo proposed the BC design concept based on the principles of application, sufficiency, and ease of use. This is a computer designed for the Chinese people. It has a low price that is easy for the people to accept, and it also has the characteristics of a home computer
All required functions. More than a year after the BC concept was launched, sales of Lenovo's Gemini, Gemini Nova and Cancer series of BCs have exceeded 100,000 units.
Lenovo’s practice shows that success will only favor companies that act according to economic laws.
4. Redefine development goals and carry out diversified operations
For more than ten years, Lenovo has been taking computers as the leading product, from platform computers to application computers to functional computers, serving China made due contributions to the popularization of computers. However, in the 1990s, both software and hardware manufacturers began to turn to the Internet. Some people use metaphors to say that the Internet in the 21st century is to the information society what silicon was to the semiconductor era in the 20th century. Anyone who ignores this change will be eliminated by the torrent of history.
According to relevant statistics, in just six years from 1992 to 1998, the number of Internet users in the world increased from 11 million to 113 million, a full 10-fold increase. At this growth rate, it is estimated that by 2005, 1 billion people will use the Internet. China's situation shows a more rapid momentum than the world. In 1998 alone, the number of Internet users increased three times compared with 1997, which was 270% of the world's growth rate during the same period.
Therefore, Lenovo proposed its own Internet strategy in early 1999: building its own products and businesses with the Internet as the core. On June 16 of the same year, Lenovo announced in Xi'an that it would change its business. Lenovo Group would transform from a computer function integrator to a provider of comprehensive Internet products and services.
Lenovo summarizes the impact of the Internet into three aspects: family, business, and society: families can use the Internet for education, entertainment, shopping, and communication; companies can use the Internet to work, trade, and make products and businesses online. Promote and provide online services to users; social Internet access can realize online government, online schools, online banking, online libraries, etc.
Lenovo will start from these three areas to realize its Internet strategy and build the enterprise's market structure at three levels: Internet access products, central office products and information services. If access products are compared to TV sets, central office products are TV transmitters, and information services are TV programs.
Access products include "study computers" and "living room computers" for home users; "office computers" and "mobile computers" for business users. The so-called "study computer" is what is now called a home computer, while the "living room computer" is similar to an information appliance and an office computer. It can easily set up the Internet and flexibly access the Internet. The design pays attention to the security of network data and the prevention of viruses. protection. Lenovo now has mobile computer products Lenovo Zhaotu laptop and Lenovo Dimensity handheld computer. They have two characteristics: thinness and lightness and mobile Internet access.
In terms of central office products, Lenovo will develop dedicated servers for Internet application models, such as homepage servers, mail servers, server cluster systems, etc. for the ISP market. In addition, Lenovo will also provide secure homepage server solutions to protect the homepages of governments, enterprises and other departments from external attacks, as well as optimize the performance of server products in response to the special requirements of the Internet for server performance.
In the field of information services, Lenovo will launch three websites: first, a site for family information services? Happy Home?; second, a commercial information service site for corporate users? My Office?; third It is an educational information service site for middle school students called Lenovo Online School.
Lenovo will no longer be the original Lenovo, it is opening up a broader development path.
Lenovo Group’s long-term development goal is to become a long-term, large-scale high-tech company. Its business goal is to achieve a turnover of US$10 billion by 2005, approaching the world's top 500 companies.
Lenovo’s brand value
Among the top 100 listed companies in China announced by Fortune in September 2002, Lenovo Group ranked sixth;
2002 At the end of 2003, as one of the most valuable brands in China, the Lenovo brand ranked among the top five, with a brand value of 19.832 billion yuan; at the end of 2003, as one of the most valuable brands in China, the Lenovo brand ranked among the top five. Fourth, the brand value reached 26.805 billion yuan;
In January 2003, in the 11th "Best-Managed Companies" selection of "Asia Money", Lenovo won? Ranked first in all selections including Best Managed Company, Best Investor Relations, and Best Financial Management.
On March 26, 2004, Lenovo Group became the first Chinese company to sign a cooperation agreement with the International Olympic Committee and became a global partner of the International Olympic Committee. Lenovo Group exclusively provided desktop computers, notebooks, servers, printers and other computing technology equipment as well as financial and technical support for the 2006 Turin Winter Olympics and the 2008 Beijing Olympics, as well as Olympic committees and Olympic delegations in more than 200 countries and regions around the world. support.
On December 8, 2004, Lenovo Group held a grand press conference at the Continental Hotel in Beijing and announced its official acquisition of IBM's global PC business for US$1.25 billion. Based on the combined sales performance of both parties in 2003, this merger means that Lenovo's annual PC shipments will reach 11.9 million units and sales will reach 12 billion US dollars, thereby increasing Lenovo's PC business scale by 4% in 2004. times. After the acquisition, Lenovo will combine IBM's world-famous Think brand notebook business, Lenovo's leading brand awareness in China, high-quality services and support for consumer and commercial customers, and its strong presence in China, the world's fastest-growing IT market. The combination of strong capabilities and leadership positions results in a vast distribution and sales network in 160 countries around the world and extensive global recognition. After the acquisition is completed, Lenovo will have leading commercial notebook products, leading R&D and product differentiation capabilities, stronger innovation capabilities and a richer product portfolio.
In 2008, the Fortune 500 list of the world's top companies published by the United States showed that Lenovo Group appeared on the list for the first time as the world's fourth largest computer manufacturer, ranking 499th, with annual revenue of US$16.788 billion.
In 2013, it was awarded the top 500 Chinese brands in 2013 jointly released by the China Brand Value Research Institute, the Central Commission for National Situation Investigation, and Focus China.
Ranked second among China’s top 500 private enterprises in 2014.
In 2014, it was shortlisted for the 2014 (11th) "Top 500 World Brands" list compiled by the World Brand Laboratory.