From the last 30 years, China’s economic growth has been overwhelming. In the early stage of the 21st century, this growth was driven by excessive labor and low value added products. But now China’s world domination is no more confined to those parameters. Now Chinese governments’ policies are helping their business firms to compete with world level organizations. Chinese policymakers are encouraging Chinese firms to ‘go global’.
Now a lot of Chinese companies have come forth to challenge big international firms like Apple, Samsung, Microsoft etc. One of such Chinese companies is Lenovo.
Lenovo was founded in 1984 with the help of Chinese government Institute of Computing Technology(ICT) who invested 200,000 RMB (equivalent to $24000). Earlier it was known as New Technology Development Company (NTD co.). It started with a team of 10 engineers led by Liu Chuanzhi. Within a couple of years, it was renamed as Legend.
Since all team members were scientists, Lenovo faced difficulties in doing business at the beginning. Team members used to walk instead of using transport to save money.
Early objective of Lenovo was not to compete at international level but to generate income from the IT market. At that time, most of the Chinese companies were funded by research institutes and universities in Beijing.
In the early stage, they started selling foreign computers to Chinese people and they used to provide installation service as well. A circuit board which enabled IBM personal computers to process Chinese character, was the first major breakthrough for them. After that, they started a motherboard factory.
Lenovo achieved great success when they built their own first PC in 1990 named Legend PC. In 1997, Legend became the leader in China for PCs leaving IBM behind. In 1999, it had a whopping 27% market share of the china market. But in the early 2000s itself, they realised that diversifying its product base in china will not bring more success so they planned to grow their brand internationally.
In 2002, Legend started making mobile phones and in 2003, the company released the world’s first Blu-ray disc player.
It was renamed Lenovo Group Limited in 2003.
When Lenovo acquired IBM’s Personal Computer division in 2004 with $1.25 billion, experts considered it a big mistake to invest in technology of yesteryear. But Lenovo proved everyone wrong and in 2005, it became ninth largest computer company in the world.
In 2007-08, the company launched different variations of thinkpad and achieved good profit.
Lenovo was facing a big language barrier when they used to communicate with their partners. They did not know English so to overcome that they hired 5 U.S. Directors.and also decided that English will be the first language for doing business within Lenovo to bring themselves on the global canvas.
Lenovo was so focused on knowing american culture and English language that then chairman of board, Yang Yuanqing, shifted with family to Companies’ American headquarter to improve his english skills. When the company stumbled in the 2009 recession, he was asked to come back from America and was appointed CEO of Lenovo. Since then, he has continued in the CEO position. Yuanqing joined the company as an intern and used to deliver computers by bicycle.
Lenovo CEO Yang Yuanqing has been ranked one of the world s best CEOs by Barron’s and Founder Liu Chuanzhi was already in 2005 named China s high-tech hero by the Financial Times.
In 2011, lenovo directly competed with macbook air with its launch of thinkpad X1. X1 got a mixed reaction from the audience but its variant X1 carbon was worldwide praised.
To strengthen its presence at global level, Lenovo acquired a few international companies like Brazil-based electronics company Digibras in $148 million, Motorola Mobility with a price of $2.91 billion.
Motorola was specifically acquired to strengthen Lenovo operation in North America and the UK but it failed badly.
After introducing smartphones and tablets in 2012, it became the greatest vendor of portable devices in china.
By 2015, Lenovo grew into the world’s number 1 PC maker, number 3 smartphone manufacturer and number 3 in the production of tablet computers.
Fujitsu, Development Bank of Japan, NetApp are the noted joint ventures done by Lenovo in 2017-18.
Currently, Lenovo is the top PC manufacturer in the world with a whopping 24 percent of global sales in 2019. In mid-2019, Lenovo also announced that Motorola started giving them profit. .
The 2019-20 corona pandemic left an impact on Lenovo as well. In 2020, Lenovo terminated its contractors, froze the salary of employees and also closed factories in China with other cost saving measures due to the corona pandemic.
Lenovo had a philanthropic response valued at more than thirteen million dollars USD. This includes donating technology to support social distancing efforts, along with schooling at home and work from home efforts. The CEO of the company also donated one and a half million dollars USD to the Chinese University of Science and Technology.
Currently, Lenovo is operating from 60 countries and its products are sold in 180 countries with 57,000 employees worldwide. It is a fortune global 500 company with more than $ 50 billion revenue in 2019.