Strong corporate culture, ability to adapt is best blueprint forgoing global: Lenovo
The blueprint for any company that pursues internationalexpansion starts with building a strong entrepreneurial culturethat adapts to the times, according to Chinese technology giantLenovo Group.
It is a business principle that has served Lenovo well in itsdecades-long transformation from a start-up electronics company inmainland China in 1984 into the world's biggest supplier ofpersonal computers.
\"When a company becomes bigger, make sure that there is a uniqueculture committed to execute its strategy,\" Ivan Cheung, Lenovoexecutive director and general manager for Hong Kong, Taiwan andKorea, said in his interview at the South China Morning Post's GameChangers Forum 3 on Tuesday.
Lenovo has been a role model for many Chinese technologycompanies since it acquired IBM's PC business in 2005. Photo:AFP
Lenovo has been a role model for many Chinese technologycompanies since it rapidly expanded its international operationsafter acquiring the personal computer division of IBM for US$1.75billion in 2005.
The computer giant, which operates in more than 160 countries,has continued its expansion with the purchase last year of MotorolaMobility for US$2.91 billion from Google and the commodity x86server business of IBM for US$2.1 billion.
\"We're trying to replicate our success in the PC industry, inthe smartphone and enterprise server businesses,\" Cheung said.
He pointed out that Lenovo translated the principles ofaccountability and entrepreneurship into a few action points: \"Weplan before we commit; we perform as we promise; we prioritisecompany first; and we practice improving everyday.\"
In their book The Lenovo Way, authors Gina Qiao and YolandaConyers said the strong corporate culture keeps the companyprepared to change and diversify.
\"The Chinese have a saying: To cultivate trees, you need 10years. To cultivate people, you need 100 years. That's fine with usbecause we know how to be patient,\" the authors wrote.
Amid changes in the global economy and evolving consumer tastes,start-ups must also realise that being adaptable can help themsurvive tough times.
Lenovo currently finds itself in need to be more nimble asglobal personal computer sales continue to decline and competitionin the smartphone and commodity server businesses intensify.
The company last month announced that it was laying off 3,200employees in non- manufacturing jobs, out of its total 60,000worldwide staff, under a sweeping restructuring plan.
That would help the company reduce expenses by US$650 million inthe second half of its fiscal year to March and US$1.35 billion onan annual basis.
The restructuring will see Motorola be responsible fordesigning, developing and manufacturing smartphones. The productionsupply chain for personal computers and servers will also beintegrated.
Yang Yuanqing, the chairman and chief executive at Lenovo, saidlast month that the company targeted a 30 per cent global marketshare in personal computers and the turnaround of its mobiledevices business in two to three quarters.
Question:
What changes did Lenovo undergo? Process change orstrategic cultural change? Explain your answers based on theconsideration of the theme of change, driving force, and the degreeof the organization changes. What are the reasons for Lenovo’s tosuccess?
