Lenovo: an Example of the Growth of Chinese Enterprises
The 2016 China Insights Series Forum was held on 20 October at Mandarin Orchard Hotel, attracting more than 1000 guests in attendance. Lien Distinguished Fellow and Chairman of Legend Holdings, Mr Liu Chuanzhi shared his entrepreneurial journey of founding and growing Lenovo, now the world’s top PC maker by market share, ranking 202nd out of Fortune Global 500 in 2016.
The Forum, themed ‘Lenovo: An Example of the Growth of Chinese Enterprises’, was co-organised by Business China and Lien Ying Chow Legacy Fellowship. In a lively account, Mr Liu shared three main phases in his journey of establishing Lenovo.
In the early years of 1984 to 1990, the company developed its first successful product, a Chinese input system and also became an agent for other foreign PC brands, learning about sales channels and financial management in the process. Mr Liu and his colleagues were inspired to create a proprietary branded PC and Lenovo started to manufacture and market computers using its own brand name.
Despite facing early difficulties like the lack of knowledge about corporate operations and lack of funding, Lenovo’s market share gradually increased from 0.60% in 1994 to 27.50% in 2001, thus becoming the market leader in China, ahead of other foreign brands.
In the third phase, Lenovo went global and announced the acquisition of IBM PC in 2004, which was a major milestone for the company. Mr Liu pointed out that the merger was not entirely smooth and they faced the challenge of cultural integration, with differing management styles.
Nevertheless, he persevered and went through with the acquisition and built the right management team, comprising of Chinese and Western executives with a good mix of expertise. Post-acquisition, Lenovo achieved 17 successive quarters of fastest growth among major PC makers and is now the world’s largest PC maker.
Mr Liu’s lively sharing and humourous anecdotes elicited much laughter from the audience. During the highly interactive Q&A session moderated by Professor Liu Hong, NTU’s Chair of School of Humanities and Social Sciences, the floor was abuzzed with questions from the engaged audience.
CEO of Business China, Ms Sun Xueling and Chairman of the Lien Foundation, Mr Laurence Lien also attended the Forum.
The China Insights Lecture Series invites academics and industry experts from China, Hong Kong, Taiwan and Singapore to offer valuable perspectives on issues that impact China and the world. Invited speakers will cover topics of their expertise ranging from social and cultural, business and economics, science and technology, as well as politics and international relations; areas that will deepen participants knowledge and understanding of China.