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March, 2018

Lenovo named top Chinese brand by global consumers

Original article: The Drum

Consumer electronic maker Lenovo tops the list of influential Chinese brands among global consumers, according to a new report by WPP, Kantar Millward Brown and Google. Best known for its PCs, Lenovo edged out Huawei (No. 2) and Alibaba (No .3). Handset maker Xiaomi was ranked fourth and state-owned airline Air China fifth. 

Analysis:

At first blush, Lenovo isn't the foremost global Chinese brand. The Beijing-based company doesn't make headlines like Alibaba, nor does it tout technological prowess like Huawei. Compared to upstart unicorn Xiaomi, Lenovo looks staid. And of course, in terms of market capitalization, Lenovo is nowhere near Alibaba or Tencent's half-trillion U.S. dollar value. 


Yet Lenovo has one strength its counterparts do not: an established global presence, anchored by world-class talent. Lenovo developed its business steadily after acquiring IBM's personal-computing unit in 2005. IBM offered Lenovo everything it wanted: a robust brand, cost structure, technology and market channels. 


After the acquisition, Lenovo smoothly integrated its own culture with IBM's, focusing in particular on senior management. That strategy allowed Lenovo to avoid the type of toxic cultural clashes that harm employee morale. Meanwhile, with its sights on the global market, Lenovo empowered both Chinese and global managers to lead the company. 


Nearly 13 years after the deal closed, Lenovo has one of the most global leadership teams of any Chinese firm. Chief executive officer Yang Yuanqing is Chinese. Corporate president and chief operating officer Gianfranco Lanci is Italian. American Kirk Skaugen (previously at Intel for 24 years) is executive vice president and president of the Data Center Group. Christian Teismann, senior vice president and general manager of the Enterprise Business Segment, is German. 


Lenovo's strategy has paid off handsomely: It is now the world's No. 2 PC maker behind HP. From 2005-2015, it achieved a compound annual growth rate of 41%, according to the Boston Consulting Group. Lenovo has expanded into servers too. In the quarter ended December 2017, revenue from its server business rose 17% year-on-year to $1.22 billion.


Lenovo has been less successful in mobile devices, where competition is ferocious, but the company remains determined to make its smartphone business profitable, its leadership says.  

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