Back to the future for Lenovo

Lenovo is aiming to claw back global market share by selling more cheap computers, with the world's fourth-largest PC maker looking to increase its presence in key emerging markets such as India and Poland.

Yang Yuanqing, who replaced William Amelio as chief executive last week, said yesterday: "I want us to cover the low-end segment as well. We will not lose this market."

Mr Yang said management would set detailed execution plans with clear market share targets for key emerging markets every quarter. He said it would push harder in markets in south-east Asia, India, Poland and Turkey. "Only these markets can give us hyper-growth," he said.

The remarks underline how Lenovo is adjusting its strategy from a focus on premium brands that it adopted following its acquisition of IBM's PC unit in 2005, and turning to its traditional aggressive business model to lift the company out of its current crisis.

Mr Yang, Lenovo's chief executive from 2001 to 2004, took over last week after the company reported a $97m net loss for the December quarter and said its global market share had dropped to 7.3 per cent in that quarter - 4.5 percentage points behind Taiwan's Acer, its closest rival.

Mr Yang took a more hands-off role as chairman after the IBM acquisition. Returning to the chief executive seat, he had only praise for Mr Amelio but made it clear he would run the company differently.

He said: "The most important characteristic of the IT industry is that it is changing frequently in terms of technology, pricing and products, and if you want to win, you have to adapt to those changes.

"We must be faster than our competitors."

Under a restructuring plan announced last month, Lenovo combined its Asia-Pacific and Greater China regional businesses and put the head of Greater China in charge of the unit.

Under this umbrella, the company is to push much more decisively than before to replicate the success in its Chinese home market overseas.

In China, the company's strength is the so-called transaction model - it employs a big sales force which works through a big retail channel network that reaches deep into China's different regions.,

This differs radically from the so-called relationship model inherited from IBM, where sales staff focus on long-term ties with large corporate customers.

Since 2007, Lenovo started replicating its Chinese sales model in some selected overseas markets including India, Germany and some other emerging markets. But analysts have criticised the company for having been too slow and hesitant.

Mr Yang said yesterday that Lenovo continued to consider acquisitions a suitable means for reaching its expansion goals but was not looking at any concrete targets right now.

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