1.0 Company background 2
1.1 Brief introduction 2
1.2 Product strategy 3
1.3 Price strategy 4
1.4 Distribution strategy 4
1.5 Promotion stratgey 5
2.0 Leadership in Lenovo 5
2.1 Leadership traits and behaviors 5
2.1.1 Excellent intelligence and ability & leader alike behavior 6
2.1.2 Enterprising and achievement driving traits & leader and motivator alike behavior 6
2.1.3 Social traits & trouble distributor alike behavior 7
2.2 Leadership styles 8
2.3 Effectiveness and performance 11
2.3.1 Improvement on employees’ confidence and belonging sense 11
2.3.2 Improvement on communication effectiveness 12
2.3.3 Market performance 13
2.3.4 Financial performance 14
3.0 Bolman and Deal’s four frames model 15
3.1 Introduction 16
3.2 Lenovo and four frames model 17
3.2.1 Lenovo & factory image 17
22.214.171.124 Weaknesses 19
3.2.3 Lenovo & family image 20
3.2.3 Lenovo & jungle image 21
3.2.4 Lenovo & temple image 23
4.0 Justification of Liu Chuanzhi’s leadership and recommendations 23
4.1 Justification of Liu Chuanzhi’s leadership 23
4.2 Recommendations 26
4.2.1 Enhancing the crisis awareness 26
4.2.2 Enhancing the flexibility of marketing strategy 27
4.2.3 Strengthening the advantage of patentability and industrialization 27
4.2.4 Emphasis on the strategy innovation and business model innovation 28
4.2.5 Maintaining the culture innovation 29
Figures, tables and charts
Figure 1.0 Global supply chain in Lenovo…………………………………………….5
Figure 2.0 Market share of Lenovo from 2007 to 2011………………………………15
Figure 3.0 Financial performances from 2010 to 2011……………………………….17
Figure 4.0 Financial highlights of Lenovo from 2010 to 2011………………………22
Table 1.0 The four frames work to understand organizations………………………..18
Chart 1.0 the orgnigram of Lenovo…………………………………………………..20
Chart 2.0 Current production lines of Lenovo……………………………………….24
1.0 Company background
1.1 Brief introduction
Lenovo was established in 1988, Hong Kong. Liu Chuanzhi is its big boss, who contributes a lot to the success of this Chinese company from the very beginning till now.
And to develop its brand in the global market, Lenovo changed the origin name Legend to Lenovo. Lenovo is now a well know computer corporate established by Chinese entrepreneur, which is operated in the global market at the present. Lenovo Corporate has been working hard to develop, manufacture and market its computer and related products including the desktop, the laptop, the software, and the server and so on and so forth (Lenovo 2011).
During so many years’ development, till now Lenovo has established several principal operation centers world widely such as in China mainland, Singapore, North Carolina and so on. And being the giant of personal computer maker in the world, Lenovo is well known for its personal computer manufacturing line named ThinkPad and the laptop line named Think Center. To promote such kind of developing speed, Lenovo has also brought in the personal computer making department from IBM (Zhi 2006). And since then, Lenovo is concentrating on promoting and expanding the brand of ThinkPad all over the world with good achievements. (Lenovo 2011)
1.2 Product strategy
First, Lenovo adopts a special product strategy in Chinese market to strengthen its market leader position in the personal computer market by a good understanding of Chinese market and customers’ needs in comparison to some foreign and domestic competitors. For instance, the product service offered by Lenovo to its customers such as the product maintenance service, special package and rich category of products practiced so well to meet the expectations of customers on computer products in a large extent (Lenovo 2011).
1.3 Price strategy
In the price strategy part, Lenovo has adopted a comparatively flexible price strategy to gain more market share from the domestic and foreign competitors such as high quality and relatively lower price product towards the high ended market, the good quality and acceptable cheap price towards to the low to middle ended market to attract a certain number of customers to develop their brand loyalty to Lenovo brand (Lenovo 2011).
1.4 Distribution strategy
To reach a wider scale of customers in world market, Lenovo is keen on enlarging its supply Chain to address its products to more customers by the support of establishment of several oversea bureaus in America, Singapore, Malaysia, Norway and New Zealand and so on and so forth shown in figure 1.0 (Hu 2007, pp. 22-38 ).
Figure 1.0 Global supply chain in Lenovo
Source: Lenovo. Com
In the meantime, a comparatively cost saving strategy on product delivery is adopted by Lenovo to market a large part of its products to people in a more direct way in the global market (Hu 2007, pp. 22-38).
1.5 Promotion stratgey
In the promoting strategy, the vertical marketing system adopted by Lenovo is worth mentioning. For instance, this system enables Lenovo to integrate itself as the producer with these wholesalers and retailers together as a unit to provide customers with the Lenovo products in the flagship stores by removing some many conflicts towards interests from this company, which is named by Lenovo as the 1plus 1 model (Lenovo 2011).
2.0 Leadership in Lenovo
2.1 Leadership traits and behaviors
Hughes, Ginnett and Curphy (2006) advocated that leadership traits are some specialties inside a leader including the physical appearance, intelligent and ability level, character, education backgrounds and so on. And the leadership behaviors are these activities practiced by the leader in the organization towards some specific objectives.
Being the leader of Lenovo, Liu Chuanzhi shows many special traits and performs many special behaviors in Lenovo.
2.1.1 Excellent intelligence and ability & leader alike behavior
For one thing, Liu Chuanzhi possesses excellent intelligence and ability traits as the leader demonstrating the leading role positively and actively by giving proper guidance and motivation to Lenovo people to support them gain better performance and larger achievements with effective communication (Aberman 2007).
Firstly, Liu Chuanzhi adopted the open door policy to improve the communication quality and effectiveness in Lenovo as its leader, which works as the direction of Lenovo people to show their perspectives, ideas, suggestions or even complaints in a more freely and directly way to their boss or even Liu Chuanzhi himself by removing with these worries (Hu 2007).
In the meantime, Liu Chuanzhi gave suitable and clear guidance to working staffs in Lenovo as well by clarifying the aim for this open door policy which is aimed to support Lenovo to get better development by well accepting these suggestions and opinions from people in all levels so as to pursue the healthy development (Liu 2007).
2.1.2 Enterprising and achievement driving traits & leader and motivator alike behavior
Liu Chuanzhi as the leader is so enterprising and achievement driving, who is able to stand on the stage of the whole organization to construct the suitable organizational structure and the working structure for Lenovo and its people.
At first, Liu Chuanzhi introduced the principle named barrel principle to Lenovo to balance the organizational needs and employees’ needs in a suitable extent to support the healthy development of Lenovo (Zhao 2005, vol. 6, pp. 11-13).
Secondly, in the working structure design and developing, Liu Chuanzhi works as a monitor by resorting different kinds of measures and means to gather useful information inside Lenovo to develop a thorough understanding on the overall operation of Lenovo (Zhao 2005, vol. 6, pp. 11-13). And then he is able to observe and find out some impropriate aspects in all of these operation areas to make immediate adjustments towards these problems and make Lenovo be more sensitive to the outside opportunities (Zhao 2005, vol. 6, pp. 11-13).
On this perspective, we may conclude that Liu Chuanzhi as Lenovo’s leader is so enterprising and skillful to work as a monitor to support Lenovo to be more compatible to the outside environment especially the fierce competition (Spencer & Jane 2006, pp. B2).
2.1.3 Social traits & trouble distributor alike behavior
One of the outstanding traits shown by Liu Chuanzhi as Lenovo’s leader is his excellent interpersonal skills which enable him work as a comparatively qualified trouble distributor in his company.
At first, some stories may help us further understand and know such kind of trait of Liu Chuanzhi and his trouble distributor behaviors. Let’s take the solving of the brand name problem for instance. As most people know that, in the very beginning, this computer making company was named Legend which was to emphasize the wonderful user experience offered by this brand. When expanding Legend brand in the world market, it faced a great challenge due to its name, which had already been registered by other multinational company. That is to say, Liu Chuanzhi and his company had no choice but to change its origin name, the Legend, to a new one, which may ask for a certain long period for both Chinese customers and international customers to become re-familiar with (Liu & Buck 2009, vol.7, pp. 167-181).
Working as the qualified and responsible leader in Lenovo, Liu Chuanzhi communicated with his working team actively to come up with a comparatively suitable solution to such a problem at that special time (Xie & White 2004, vol.34). Firstly, he arranged many staff meetings to ask all the people to participate in to offer suggestions in the name changing scheme by making full use of his excellent interpersonal skills to mollify people and gain their support (Xie & White 2004, vol.34). Secondly, by combination all of these useful suggestions and the practical situation faced by this company, Liu Chuanzhi finally came up with the new name for his company that was the “Lenovo” building up on the original name “Legend” and the word “Novo” to re-emphasize the special user experience given by this company and non-stopping product innovations for customers all over the world (Xie & White 2004, vol.34).
2.2 Leadership styles
In terms of the leadership style shown by Liu Chuanzhi, his leadership style is more participating style alike. In the situational leadership theory come up by Hersey and Blanchard (Daft 2010), four leadership styles were pointed out such as telling style, selling style, participating style and delegating style. With full consideration of the stories in Lenovo, Liu Chuanzhi uses the participating leadership style as the following discussion.
To begin with, in Hersey and Blanchard’s situational theory, participating leadership style is often founded on the ground of shared ideas, perspectives and high level of assistance for people to encourage them to take part in the decision making process more actively. That is to say, people’s readiness degree or situation stays at the level R3 – capable but unwilling or unsecure to do the job (Daft 2010). Referring to this point of view, let’s further examine the readiness of people in Lenovo.
In the very beginning, many people recruited by Lenovo may all possess good knowledge in the IT related fields both software and hardware aspects, who may all be valued as high competitive. For instance, there were two typical representatives named Yang Yuanqin and Guo Wei, who are hardware engineers in Lenovo. Both of the two guys graduated from famous universities of China and possessed well developed and accumulated knowledge in their working areas when they began their careers in Lenovo. While maybe as the new staffs in this newly founded company, both of the two people were shy and unconfident about their ability and the future of their company. Hence, their working performance at the beginning in Lenovo may only be regarded as poor or just so so. Such kind of situation may due to the beginning period for Lenovo was very though, which only own 10 employees with about 20,000 RMB initial capital. These weaknesses may make some people feel unconfident or unsecure and unwilling to perform better in Lenovo. (Murphy & Scharl 2007)
And in the meantime, among the developing procedures of Lenovo, some accident took place which ended in a large sum of money loss. This kind of accident aggravated people’ unconfident and insecurity feeling towards their jobs and the future of their company, which further degraded their willingness to work better, although they possessed good knowledge and ability.
Furthermore, in 2004, Liu Chuanzhi even invested more than $1.75 billion USD to purchase IBM’S personal computer department. Such kind of big deal also aroused a panic among employees in Lenovo towards the prospect of their company in the future (Zhao 2005).
From these clues mentioned above, we find people in Lenovo were capable, skillful, and knowledgeable. In a word, they possessed these qualities their jobs in Lenovo required. In the meantime, these people in Lenovo may also feel insecure and unconfident towards both their abilities and their company’s future which made some of them with low level of willingness to perform their work better. On this point, we are able to define the readiness level of people in Lenovo as the R3– capable but unwilling or unsecure to do the job (Daft 2010).
And to manage this kind of dilemma, Liu Chuanzhi being the leader of Lenovo made great efforts to change such kind of situation. For instance, he found out and gave people so many opportunities to take part in the decision making processes especially improved their involvement in some big events or decisions in Lenovo to improve their belonging sense in Lenovo and their confidence towards themselves (Biediger, Decicco & Green 2005). And then, Liu Chuanzhi encouraged the high quality communication in Lenovo to make every staff understand the objectives or aims of these big decisions made by their companies and these benefits gained by these decisions brought for both Lenovo and them (Biediger, Decicco & Green 2005).
For instance, in order to reduce the worries and confidence of people towards both themselves and Lenovo, Liu Chuanzhi adopted the strategy of empowerment to give people more power in decision making and endow them with important roles or positions such as the managerial roles or positions for staffs such as Yang Yuanqin and Guo Wei to improve their confidence and belonging sense towards Lenovo and them encourage their willingness to present better performance in their company (Biediger, Decicco & Green 2005).
In the meantime, in the case of money losing case we mentioned above and the great deal of buying the personal computer department of IBM, Liu Chuanzhi gave his staff many chances to offer their perspectives and suggestions in aimed to remove misunderstandings and clarify the importance of these big decisions and steps for the interests of not only Lenovo but also its people (Gao, Woetzel & Wu 2003).
In brief, the readiness level of people in Lenovo is regarded as R3 level and the leadership style used by Liu Chuanzhi is the participative style to give people more support on their needs and requirements and chanced in decision making to build good relationship while less concern on the task accomplishment (Daft 2010).
2.3 Effectiveness and performance
With the special leadership traits, behaviors and style expressed by Liu Chuanzhi, its effectiveness and performance may be evaluated as below.
2.3.1 Improvement on employees’ confidence and belonging sense
First and foremost, participating leadership style practiced by Liu Chuanzhi may be very suitable for the situation of Lenovo at its beginning and current time, it enables Lenovo to remove these worries and pressures of people towards themselves and their company’s future.
For instance, by the using of open door communication strategy, principle of bamboo barrel and some other effective practices, people in Lenovo become more open and positive towards their jobs and the company’s future, which end in the development of optimistic working attitudes of people. Under such kind of encouragement, people in Lenovo show their ideas and suggestions in a more open and effective way and improve their participant level in decision making of Lenovo especially on some big events, which facilitate Lenovo to gain more useful and good suggestions on its future development and create welcomed working atmosphere of its people (Hu 2007).
That is to say, under the lead of Liu Chuanzhi, the development of Lenovo is regulated in a more healthy and proper way.
2.3.2 Improvement on communication effectiveness
Harter, Schmidt and Hayes (2005, vol.87, no.2, pp. 268-79) advocated the leadership behaviors, traits and style of Liu Chuanzhi in Lenovo promote the communication effectives and the positive outcomes on decision making a lot.
For instance, these policies such as open door and principle of barrel enable Lenovo to make a balance of the organizational structure to protect the interests and benefits of not only Lenovo but also its people in the aspects of production structure, quality maintenance structure, management structure, finance structure, marketing structure, human resource structure and so on and so forth by largely improvement of communication quality and the quality of decision making (Harter, Schmidt and Hayes 2005, vol.87, no.2, pp. 268-79).
2.3.3 Market performance
In the market performance, under the direction of Liu Chuanzhi, Lenovo’s performance in market share improvement is worth mentioning as well. Figure 2.0 shows Lenovo’s performance in market share improvement from financial year 2007 to financial year 2011 in global market.
We can find that the market share of Lenovo in 2007 was about 7.3%, in 2008 was about 7.7%, in 2009 was about 7.4% , in 2009 was about 8.5% while at last year, it enjoyed a shot up which jumped to 10.2% (Lenovo 2011). As a matter of fact, this good performance of Lenovo in expanding of its market share may owe to the efforts of Liu Chuanzhi as its leader. There are many effective strategies especially the marketing strategies carried out by him during these years including the differentiated product strategy we mentioned above which differentiate the products of Lenovo from that of these competitors and build a large number of loyal customers (Hu 2007, pp. 22-38).
Secondly, the pricing strategy makes Lenovo enjoy the fame of high quality product provider with lower price compared to other competitors, which win a wide scape of support for Lenovo from customers as well (Hu 2007, pp. 22-38).
Thirdly, the promotion strategy unite the wholesalers and retailers of Lenovo together to promote the affordable computer products with high quality to customers all improve the market reputation of Lenovo a lot (Hu 2007, pp. 22-38).
At last the distribution strategy under the direction of Liu Chuanzhi also makes Lenovo’ products reach a larger size of customers (Hu 2007, pp. 22-38).
In brief, thanks to these strategies directed by Liu Chuanzhi, Lenovo may be able to get the good performance in the improvement of its market share as in figure 2.0.
Figure 2.0 Market share of Lenovo from 2007 to 2011
Source: Lenovo annua2011results
2.3.4 Financial performance
In terms of the financial performance of Lenovo, we may also speak high of the leadership effectiveness of Liu Chuanzhi.
From Figure 3.0 the financial performance of Lenovo, we find that Lenovo has enjoyed a continuous improvement on its total sales from the $ 16,604,815 USD in 2010 to the $ 21,594,371USD, which proved the leadership effectiveness of Liu Chuanzhi (Lenovo 2011).
As a matter of fact, these leadership practices including the speeding up of Lenovo’s expansion in world market by establishing working bureaus in different market regions with effective working teams in these places, buying in the personal computer department from IBM to increase the competitiveness and productivity of Lenovo and other effective practices all support Lenovo the realize today’s good performance in its finance (Hu 2007, pp. 22-38 & Zhi 2006).
Figure 3.0 Financial performances from 2010 to 2011
Source: Lenovo annual 2011results
In brief, we may evaluate the leadership practices of Liu Chuanzhi in Lenovo including his leadership traits, behaviors and style all contribute a lot to this company. From this angle, we believe Liu Chuanzhi’s leadership in Lenovo is effective.
3.0 Bolman and Deal’s four frames model
Organizations are viewed by Bolman and Deal (2003) as factories, jungles, families and temples, which are the images of the four aspects in an organization including the structural issues, political issues, human resource issues and symbolic issues explained thoroughly in table 1.0. And from the viewpoints of Bolman and Deal (2003), proper management of the four aspects may improve the performance of organizations a lot.
Table 1.0 The four frames work to understand organizations
|Frame||Image of Organization||Discipline||Underlying Assumptions|
|1. Organizations are aimed to pursue certain goals to exist
2. Efficiency and enhanced performance can be realized by specialization and increasing the labor division
3. The alignment of individual and team efforts can be realized by cooperation and control
4. Rationality often enhance better organization performance
5Organizational objectives, assignments, techniques and environment had better be aligned with its structure
6. Sometimes structural deficiencies in an organization may result in problems.
|human resource||family||Training, human resource management||1.Fulfilling human needs is a aim for organization to exist
2. Both employees and organizations can’t survive singly
3. When there are some conflicts of the fits between employees and their organization, both of the two sides may suffer
4. When the fits between employees and their organization are balanced , both of the two sides may benefit
|political||jungle||Politics, infighting||1.Diverse needs of individual or groups on interests are often united by organizations
2.Although there are differences existing in values, interests, behaviors, perspectives, etc., they are often endured among these coalition members
3.There are scarce resources included in all the crucial decisions in organization, namely who will get what
4.Some internal conflicts may be caused by scarce resources and enduring differences
|1.What it means to people may be more important than what happens in organizations
2. People may often interpret their experience in different ways, which may the relationship between the activity and meaning loose.
3.Symbols are often created to solve conflicts, meet the needs of predictability and hope
4. The expressing way of events and procedures may play a more important role than their outputs
5. Organizations and its people are often held together by the culture from the shared values, views and beliefs.
Source: adopt from Bolman, L. and Deal, T. 2003, Reframing Organizations: Artistry, Choice, and Leadership, 3 edn., Jossey-Bass, San Francisco,
3.2 Lenovo and four frames model
According to the four frames model from Bolman and Deal (2003), the organizational operation and its leadership of Lenovo will be reframed.
3.2.1 Lenovo & factory image
In terms of the factory or structure issues of Lenovo under the leadership of Liu Chuanzhi, it may be more proper to investigate the organization structure of Lenovo to evaluate its alignment level of Organizational objectives, assignments, techniques and environment with its structure (Bolman & Deal 2003).
Chart 1.0 the orgnigram of Lenovo
Source: Lenovo 2011
From the organization chart of Lenovo in the current, it enables us to identify its strengths and weaknesses in the structural issues.
The current organization chart of Lenovo is reviewed as clear and brief, which enables Lenovo to structure its important departments and positions in an efficient way (Kumar 2009).
Second, the organization structure set by Lenovo under Liu Chuanzhi’s guidance enables Lenovo to performance more comprehensively on developing a close look or focus on not only the domestic market but also the international market (Kumar 2009). For instance, in marketing Lenovo brand in the global market, this structure supports Lenovo and Liu Chuanzhi to enhance the effectiveness and efficiency of their advertisements activities, improve the product performance not only on quality but also on their appearance and packaging, and the supportive sales services for customers all over the world (Kumar 2009).
In brief, this kind of organizational structure in Lenovo may enable it and Liu Chuanzhi to regulate and standardize its globalization space in a more effective and efficient manner but not only saving cost but also saving human resources.
Some weaknesses of this organization structure are also found, which may also arouse some resistance and inflight in this company.
Kumar (2009) told us that the current organization structure is very considerate and comprehensive to concern about most of the needs of Lenovo in globalizing its brand. In the meanwhile, it may produce higher operational cost for Lenovo compared the previous time. For instance, from 2010 to 2010, the operational expenses of Lenovo jumped about 24.7% from $1,586 million to $1,978 million, which is partly due to the high operation cost on such kind of organizational structure in Lenovo nowadays examined by Kumar (2009).
Figure 4.0 Financial highlights of Lenovo from 2010 to 2011
Source: Lenovo annual 2011results
3.2.3 Lenovo & family image
To meet the balance of the fit between employees and Lenovo, Liu Chuanzhi encourages diversity workforce management strategy to manage people (Liu 2007).
Firstly, in people recruitment part, Lenovo clarify that it welcomes all the talents despite their gender, religion, nationality, sex orientation, education and so on and so forth to offer them equal chances in recruitment, training, and promotion in Lenovo. This policy supports Lenovo attract and retain diverse workforce with good quality to inject more innovation and creativity in this company (Hu 2007).
Lenovo focuses on the development of female managerial talents as well such as the promotion of female leadership program to offer female talents more space and large stage to show their abilities and contribute to Lenovo (Hu 2007).
Moreover, in the product research and development groups of Lenovo, members possess diverse background, which are made up of high quality mix of senior employees and juniors employees to spark together in order to give Lenovo more surprises (Hu 2007).
In brief, in human resource management, Lenovo and Liu Chuanzhi have done a good job to create a high quality talent pool for Lenovo to maintain its great image as a high quality computer provider in China and the global market (Hu 2007).
3.2.3 Lenovo & jungle image
Lenovo is faced with external and internal pressures in its developing road as well. There are also continuous inside politics caused by scarce resources and enduring differences among people (Bolman & Deal 2003).
For one thing, Lenovo emphasized the hardworking for employees all the time but it ignore the skillful working strategy to promote the efficiency and set employees from overload workings, which even made some employees, have complaints and perform poor (Liu & Buck 2009）.
For the other, in expanding market to global region, Lenovo may be also ambitious to emphasize too much on the developing speed by introducing the product diversification strategy to enrich the product category shown in chart 2.0 for Lenovo to attract more customers (Lenovo 2011).
Chart 2.0 Current production lines of Lenovo
Source: Adopt from Lenovo 2011
And such kind of too ambitious towards the pure sales achievement also aroused the complaints and resistance from some upper management. As its product manager Mr. Chen once said “the over focusing on the product diversification but not the profession may also make Lenovo come into a dilemma. But he and his followers’ idea is against the fast expanding pinion of Liu Chuanzhi, which makes the two groups in Lenovo group full of conflicts and disputes (Liu & Buck 2009）.
Maybe in this political issue inside Lenovo, we may conclude the management and leadership practices aren’t so effective.
3.2.4 Lenovo & temple image
The temple image in the four frames advocates the importance of organizational culture on its people that organizations and its people are often held together by the culture from the shared values, views and beliefs (Bolman & Deal 2003).
Lenovo built its culture in emphasizing the achievement and productivity in the first place in its beginning. Although such kind of culture encouraged the development of Lenovo at a good speed, it made the readiness level of employees in the R3 level as the situational leadership theory described that people possessed (Daft 2010). As a matter of fact, such kind of culture in the begging of a company is necessary. While with Lenovo’s development its weakness became more and more obvious which made many employees felt insecurity and unwillingness towards their ability and the future of their company (Liu 2007).
By taking this situation into full consideration, Liu Chuanzhi led Lenovo to cultivate a more suitable organization culture which puts the development of good relationship, cultivating tuneful working environment to encourage employees to enjoy their work in Lenovo and then promote the productivity in the first place ( Lenovo 2011).
4.0 Justification of Liu Chuanzhi’s leadership and recommendations
4.1 Justification of Liu Chuanzhi’s leadership
In full consideration of Liu Chuanzhi’s leadership in Lenovo, there are two sides of comments on him.
At the beginning of Lenovo’s foundation, Liu Chuanzhi as Lenovo’s big boss led this company from a small firm with only few employees towards a prosperous road. He stood on the height of the whole company to full analyze these issues which were related to the survival of Lenovo such as the how to control production cost, what the customers actual want, what kinds of products are the most preferable ones in the market, how to manage these challenges and opportunities from not only the inside but also the outside (Liu 2007).
Hence, these leadership traits and behaviors and the participating leadership styles acted out by Liu Chuanzhi was so suitable for the special period of Lenovo, which support Lenovo to jump from a small and tinny company to a multinational personal computer makers in the global market (Liu 2007).
In the meantime, the enterprising spirit encouraged by Liu Chuanzhi in Lenovo by culture building has supported Lenovo to cultivate so many talents including the managerial talents such as Yang Yuanqing, and some ordinary but hard working employees, who devoted a lot the reputation and market performance of Lenovo today (Liu 2007).
Additionally, the good financial results, market share gained in not only China and other emerging markets all proved the value of Liu Chuanzhi as Lenovo’s big boss (Liu 2007).
In addition to these strengths brought by Liu Chuanzhi’s leadership, some drawbacks also exist.
Lenovo has developed into a comparatively mature stage, including its personal computer products such as the ideapad series, thinkpad series and so on. That is to say, Lenovo needs some special and different inspiration to make this organization to be re-freshened and full of vitality to meet higher requirement of the market (Huang 2012)
But under Liu Chuanzhi’s governance, Lenovo still tries to maintain its present performance without thinking too much about how to strengthen itself to a higher level. One of the most typical examples is the product diversification strategy in China market. Yes, it is so important for a company to give its customers richer and wider user experiences on its products but it should be built upon the high satisfaction level of users on their core products and then it is ok and reasonable for this company to diversify its production lines into a wider scope (Huang 2012).
While in terms of the performance Lenovo in this aspect guided by Liu Chuanzhi, this company may be too ambitious to gain more success, which makes its core products namely the personal computers, especially these computers targeted to the middle to low ended market segmentation has a declining performance on its quality in comparison to these strong competitors such as Dell, Acer, HP and so on (Huang 2012).
In brief, more efforts should also be made by Lenovo’s leader in the future.
On the ground of all the performance in Lenovo under the governance of Liu Chuanzhi, both weakness and strengths are evaluated by us. Hence, towards the poor aspect, there are some suggestions.
4.2.1 Enhancing the crisis awareness
As the CEO of IBM stated that the crisis awareness is the crucial factor to encourage innovation in the organization. According to the research of IBM Business College, two out of three CEO in the global market showed that their companies may encounter big or even bigger challenge in 2006. And in 2008, such kind of proportion was changed to four out of five. And in the meantime, these CEO held the opinion that their actual control power was even lower than 22% in comparison to their prediction (Huang 2012).
In another word, under the globalization trend, Lenovo had better make preparation for the danger in the times of safety.
We suggest Lenovo maintain its investment on product research and development. Most important, these investments should be allocated more properly. In the above, we have discussed Lenovo may act too ambitious towards success, which makes it to have an absent-mind on the continuous improvement of its core products such as the personal computer series which even ends in the humble position of Lenovo towards so strong competitors (Liu & Buck 2009). That is to say, Lenovo ought to concentrate on the improvement of its core products in the product research and development part to strengthen their competitiveness with continuous innovation in the market and then it is the time for it to make more diversification on production lines (Huang 2012).
4.2.2 Enhancing the flexibility of marketing strategy
There are so many companies try to maintain their flexibility in their corporate strategy under the support of scenario planning and dynamic programming method to meet the needs of different situation. For instance, Dell computer is always famous for its direct sales strategy. But now it establishes many showrooms for users to enter directly to experience. And the Walmart which focused on the super market business in the past begins to enter the retail store industry. (Huang 2012)
Just because so many big companies begin to improve their flexibility in the global market, it may be the time for Lenovo to consider this issue to improve its flexibility to meet challenges in the global market. For instance, it is reasonable for Lenovo to diversify its sales model to include not only the flagship store sales but also the direct sales method to reach wider customer basis in global market. (Huang 2012)
4.2.3 Strengthening the advantage of patentability and industrialization
Being a personal computer and related products maker, it is the time for Lenovo to realize its innovation values in higher degree. Briefly speaking, Lenovo ought to continue its technology innovation, develop the intellectual property protection system and its proper operation in order to make the technique advantage become one of the incentives to support Lenovo to develop sustainably with stable and continual profit (Huang 2012).
Only by this means, the giant position of personal computer maker of Lenovo can ben strengthened and maintained for a long time.
4.2.4 Emphasis on the strategy innovation and business model innovation
For one thing, the strategy innovation is defined as the great achievement on management innovation nowadays. It may be the time for Liu Chuanzhi to lead Lenovo to innovate its strategy not only in the production strategy but also in the marketing strategy and so on. For instance, in China it is so popular for enterprises to sponsor the famous events. Lenovo is possible to enter this trend to make use of the fame or popularity of some famous events especially some singing competition to accumulate Lenovo’s popularity in a higher degree. (Huang 2012)
For the other, in the business model innovation part, more and more CEOs begin to integrate more services with their product mix. Liu Chuanzhi may also use this kind of model to improve Lenovo’s performance and popularity. For example, it is possible for Lenovo to make some changes in the payment issue of its products for customers. It may offer customers more flexible choices on product payment including the manner of payment by installments with some certain interest. And it may be also possible for Lenovo to adopt the consistence bonus point system for customers on product purchasing to give customers some special gifts or discount on some computer products in Lenovo when their bonus point reaching some required level. (Huang 2012)
In brief, these innovations for Lenovo are to strengthen its customer base and their brand loyalty towards Lenovo brand.
4.2.5 Maintaining the culture innovation
Referring to the corporate culture in the beginning, Lenovo may emphasize the enterprising much. And with time goes by, Liu Chuanzhi made some adjustments on Lenovo’s culture to make it possess more hommization character (Huang 2012).
But with time goes by, the requirement of corporate culture building may own more and more new contents, Lenovo ought to make suitable and timely improvement in its corporate culture to take the needs of employees, the organizations and the whole environment into full consideration to make its corporate culture be more appealing and charismatic to encourage productive performance of employees to meet both challenges and opportunities from the environment (Huang 2012).
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