Shake-up to help Lenovo face market challenges

Personal computer maker Lenovo is facing challenges due to the slowing down of markets, consumers moving towards lower cost PCs and large enterprises cutting down on purchases.

In addition, the group had a recent management shake-up with Chairman Yang Yuanqing taking over from Bill Amelio as Chief Executive and Co-Founder Liu Chuanzhi returning to head the board, putting the company back in the hands of the Chinese executives who established it.

"Lenovo's recent management change was made to bring about stability in an uncertain economic environment," newly-appointed President and COO Rory Read told Emirates Business exclusively.

"Lenovo is the first company with Chinese roots to become a major global brand and the management change will help the company position itself for the next chapter in its evolution from Chinese company to world player.

"This action is a return to the seasoned management team that led Lenovo for 25 years, and will allow the company to better leverage its strengths and its history, protect its base in China, and focus on potential growth segments – large enterprises, small and medium-size businesses and emerging markets."

Read confirmed that the company has been affected by the global economic slowdown. "The Chinese and commercial markets have slowed down dramatically. Low-cost PCs and netbooks have also had an impact. This does not mean that Lenovo will change its business strategy, but we will adapt according to market conditions. We will continue to invest in China, entry-level PCs, relationship business, emerging markets and products.

"I think it's important to look at how the general market sentiment will impact consumers' buying behaviour and enterprise purchasing strategies. But there is no denying that companies will continue to need reliable, always-on technology to remain in business."

Lenovo has been a strong force in the Asian markets but its takeover of IBM's PC business is expected to help it become a global player.

"Lenovo has its roots in China and we are proud of that. However, following the acquisition of IBM's PC division we have made significant progress in becoming a global PC vendor.

"We operate in more than 60 countries, have a multinational management team and have adopted world sourcing to leverage the best talent wherever it happens to be."

He said the company would continue to operate in mature markets while expanding in emerging ones.

"We will continue to invest in delivering more productivity and savings to our customers, for example with our new energy-efficient PCs. Customers in emerging markets want innovation and by leading there we have an opportunity to outgrow our competitors over the long term."

The company is focusing on both commercial and consumer sales outside China.

"It's difficult to calculate the contributions made by each segment as they vary globally. Our consumer business outside China is very young and therefore it is too soon to give significant contribution comparisons. We are very enthusiastic about the future of both segments. Our commercial sales are consistent and our consumer portfolio is strong."

Read is excited about the growth potential of the netbook market.

"The segment is growing fast and Lenovo is well positioned to take advantage of that growth with our new netbook lineup, the IdeaPad S9 and S10."

Lenovo is constantly looking out for possible acquisitions. Last year the company fought with Acer to take over Packard Bell before the Taiwanese firm clinched the deal.

"Lenovo will continually assess the marketplace for potential acquisitions," said Read. "However we will not rush into anything. Potential acquisitions must bring significant benefit to our business and of course be available at the right price."

Follow Emirates 24|7 on Google News.