Now days, more and more companies are going global. In China Lenovo is a representative in that area. During I do the research about Global strategy I am very interested in the Lenovo group. It might be the earliest one gets the mind about globalization. At the beginning to run company they get them target is going global. In my paper I find some area for them strategy try to find a way to suit for this big company. I will take seven parts to written this paper. There are: Learning skills and globalization International employee and Lenovo next steps development Supply chain Global marketing and double operation mode Global strategy and differentiation strategy
Reform Lenovo business DNA New company culture and global development This will be a system for a company should be taking on the global way. I want to explain ways to suitable Chinese company are going to global. Lenovo is a case to learn. Introduction Lenovo take a goal is international is come up very early. Lenovo has been raised from the factory opened in Hong Kong to buy IBM PC department. From list to open research and development base overseas. Lenovo is step by step towards international, to a multinational company. But deep in the blood of Lenovo company culture is a good thing or will become hinder development in the further is a point.
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Lenovo existing resources and the international strategy Lenovo take are good enough for the international journey. Through Lenovo history to find strategies Lenovo was taken Investigate Lenovo history is not difficult to find that Lenovo development seems get some relationship with China’s political. China’s international will be the Lenovo international. Lenovo is a national feeling of enterprises. 80’s ideas for the national association provide excellent development opportunities. Lenovo catch hold of people’s national feeling and do the right marketing as them general engineer Ni guangnan. Today, China’s international are also give Lenovo provides a strong support. From Lenovo development history is to view.
Lenovo no mater what management mode, operating mode or technology mode have been in development. Each one changes is against every major change in the marketplace. But this time for Lenovo globalization them mark the change is not good enough. From the first to make the control of the plane to crash was indeed beyond imagination. Lenovo is from the confidence to headhunt from Dell. From Hong Kong to set up plants to in India and Mexico to establish research and development centers. Go to global is more real in the history of the Lenovo. Learning skills and globalization There are five steps enterprise should be take during them go to globalization. They are five different level learn enterprise will be taken.
First three steps are get seedtime. For Lenovo, Last two steps are more impotent. If a company is not learning before they are going to international. It’s hard to successful. It’s like a student will be study in a new country but he or she can not know anything about that new country he or she is hard to enjoy his or her study. Step one: research learning. Step two: microcosmic learning Step three: trail learning Step four: deepen and development learning Step five: reform enterprise DNA Research learning Research learning is survey of the target country's macroeconomic environment and learning it. Before Wal-Mart has been open any supermarket in China.
There management must be get research for Chinese population, income and consumption levels, the per capita GDP of the economy and the Chinese government’s intervention in the situation of more then one investigation. This is one very important point to explain why War-Mart so successful. Similarly, Lenovo must be research the target country macro environment Such as politics, economy, population, technology and environment. Lenovo Group on July 26, 2007 in Beijing announced that it will invest 31 million US dollars in India and Mexico for a new manufacturing center, in order to meet these growing demands for computers. Before Lenovo group mark this decision they must be get research about India and Mexico.
For example: In recent years the information technology industry in India stress on the bull market, is expected in 2008 India's software industry output value of 87 billion US dollars, exports reached 50 billion US dollars, India's software industry has become an important pillar for economic development. The information like that Lenovo group must be known before them marks this decision. Of course Lenovo group must research the government’s intervention in the situation of these two countries. Microcosmic learning The second phase of the study is aimed at relatively minor issues. The study focused on consumers and the local some unspoken rules.
It contains the legal inside. If the analogy to the internationalization of a war, then only can we win the battles mutual understanding. However, the key factor in winning is not the master of public information. Master of public information is necessary, but not completely conditions. And this public information is that the internationalization of the war is that the macroeconomic environment analysis. So completely conditions are the local consumer habits, language, unspoken rules, logical thinking and values of the legal system and potential constraints which hidden in the surface. Those in the international war can be viewed as the enemy within the military.
Lenovo is the same in acquisition of IBM's PC division, Lenovo if learn the American consumer habits, lifestyle, and the legal situation of the values Americans have to understand that it acquired in association with the issue of integration after winning exposed to greater problems. In fact, Lenovo's acquisition of IBM's PC department does have a big problem. The first is IBM and Lenovo two different cultural conflicts. This situation is inevitable, but before Lenovo buying IBM PC department if Lenovo's management was learning the Americans these potential habits and the rules has so understood will be relatively less. You can imagine, if Lenovo Group and the United States in the negotiations of the use of the broken English is cooked then you can imagine people sitting in the two countries will have to work with how great the differences and contradictions.
If Lenovo executives level are not study the United States culture and the unspoken rules before they buy IBM PC department so that the major acquisitions will be difficult to continue. TCL and France's Thomson acquisition is between pictures of a negative example. Before TCL buy France’s company Thomson they are not conducted a detailed analysis and study for France’s legal system. In the end TCL encountered big issue in dealing of layoffs in the financing. French law on the protection of layoffs far exceed TCL budget. The outcome of the restructuring are not embarrassed. Trail learning The third step is learning phase of the second stage of in-depth. The first two stages of learning are to go abroad for the door before a preparatory work.
The third phase is learning test water. In this regard Wal-Mart has done quite well. Wal-Mart entered China in 1996 after five years in China did not have open one more supermarket. Is Wal-Mart hasn’t enough money for more supermarket running in China? No, it’s not. It‘s Wal-Mart is doing the trail learning in China. In these five years, Wal-Mart needs further verification by the domestic market analysis and forecasts of expected adjustments and the development of strategic planning. Because of Wal-Mart's goal is to open Wal-Mart stores in China each city, perhaps further with the development of an opening in every town. So one trail learning is necessary for Wal-Mart.
Lenovo If you want to succeed at the international level, it is the first Wal-Mart to learn patience and ability to learn. Lenovo Group in the United States, Europe, India, Mexico and other countries of the target market has sufficient patience to learn. At this stage of learning is the creation and nurturing of talents localization of management. If you have done research shows that the McDonald's and KFC Wal-Mart manager almost no Americans, the United States except shop. Wal-Mart in the five-year period not only learning to do business in China, to study the habits of the Chinese people and Chinese people to do things the way they want to also train them in conformity with the standards of the people and in accordance with the standards of the supply chain.
So Lenovo in the United States and other targeted countries on the market to do less is to establish their base and develop their own localization of management talent. If Lenovo not build a team in the target country they are hard to quite join the local market. Localization is first step and most important step for the international. If Lenovo failed localization so it is difficult to achieve internationalization. Google appointed Kai-Fu Lee, vice president for global concurrently president of China is a good example. Google to open the Chinese market to compete and Baidu, he first has to do is a localization team.
Deepen and development learning
The fourth stage of learning is to deepen and expand the learning. Foreign brands to enter an unfamiliar market, and in fact created a new brand with a same place. That is, no one knows you; no one will take the initiative to buy. Therefore, a brand in a local market in order to survive it so successful marketing is essential. In this regard Lenovo marketing done on the more successful. Firstly Lenovo’s sport marketing was successful in global. You can say this point is Lenovo learning from Samsung’s successful experience. Lenovo's sports marketing and event marketing performance to join the TOP program and Olympic soccer star Ronaldinho signed. These are reflected in the Lenovo in this regard made by the marketing efforts. It may Lenovo chairman Yang Yuanqing who is doing business on it.
At this stage, enterprises in the target countries have started small-scale operations. It is a positive competition and competitor’s time. McDonald's in China began opening large fast-food chain has been established at the time of its raw material supply base in China. Wal-Mart China's rapid opening of the supermarket chain has been building his management team and rapid reaction supply chain. Theoretically Lenovo in the international market competitors began when awakened positive competition should also establish a strong management team and the localization response agile supply chain. But in fact it's not Reform enterprise DNA The fifth phase of the study is recombinant DNA enterprises time.
Its enterprises rooted target countries, to thoroughly international. This stage enterprises need to reconsider the definition and rectification. This time the companies have no points of the country. It is not only to do right for the shareholders of such a simple matter. Before Samsung go to global it just need get responsibility for them investor. Need money earnings. But now Samsung has not only South Korea's Samsung. It needs of his enterprises in the world is responsible for the country. Need to integrate global resources and the right of consumers around the world responsible. They need to contribute to the community and they need to foster the image. Samsung done so it Samsung was successfully.
Lenovo listing of the problems facing this series, the reasons for Liu to defeat summed up a word, is listed after the changes are not suited. Still in the management of a small company means a rationale management listed companies. Now Lenovo whether there is sufficient justification capacity management a multinational? Lenovo seems to be done in this regard also not perfect. The mail incident in the United States is worrying Lenovo in the United States do the preparatory work. DELL salesman wrote in the e-mail, buy Lenovo is a disguised form of support to the Chinese government. He hopes to use this speech to persuade Lenovo customers to DELL. This incident will be taken bad influence for Lenovo group in the international.
It also reflects Lenovo wasn’t establishing an image suit for consumer mind about multinational companies. The big problem exists internal of Lenovo is management model. After Lenovo acquisition of IBM's PC debasement emerging the contradictions in the management seem to be quite difficult. So Lenovo headhunt DELL CEO Departure to the CEO of Lenovo Group. Lenovo hopes he has come to a temporary solution to the conflict; tripartite management of the two sides will win unanimously. More or less the Lenovo Group also did not establish applicable to international management of the approach. It is also indicates that Lenovo determined to establish a new management system. International employee and Lenovo next steps development
On November 9, 2004, Lenovo group President Liu Chuanzhi speaks frankly at the eighth session of CEO annual meeting, at present the company has encountered two big difficult problems in the internationalization advancement: Brand internationalization difficult and the internationalization talented person is deficient. He indicated obtains the success after the Chinese market, the company in order to seek the achievement the breakthrough, at present is moving towards the internationalization and the multiplication. However meets two major problems in the internationalization advancement: First is the brand internationalization process exceptionally is difficult, "before we the brand superiority which form in the Chinese market has vanished, must form the international well-known brand, must make the very big effort, and needs to have the massive funds".
Second is Lenovo need more high level international people to help them if company wants to successful in the international. He thinks this is very difficult for a local company. He expressed, “Although we have absorbed the colleague which many has the overseas service experience, but our backbone staff mainly is develops in the native place, raises, these years we unceasingly absorbed China to study to the overseas, to be some colleagues which the work came back, But requested to the internationalization talented person also to have the very great distance” The December of 2005, Dell senior vice- president concurrent Asia an the Pacific and Japan area president William . J . Arab League Mei Liao leaving Dell and join Lenovo group and take up the post of CEO. This is a change for Lenovo group about them always like use people who are group up inside of Lenovo. From Beijing, Hong Kong to Singapore, the Lou advantage (the American North Carolina state) with Paris, disperse in global each place associates in GAO Guanceng, most probably is the foreigner. In Lenovo has formed the internationalization first step is as employee’s localization understanding. In the present case, the Lenovo group faces the biggest difficult problem still is to the internationalization talented person's demand. A company wants to be really international they must be having international employee first.
Now, for Lenovo group the problem is they didn’t get enough international employees to do that work. Lenovo group build up them Research and development center any Headquarters in United States of America. In America Lenovo group feel very hard for looking for the suitable employees who understand Lenovo group culture. About this problem Lenovo get them own solution is improve them request for the new stuffs and change them officer language to English to suit for this problem. This also is the Lenovo speeds up the adoption internationalization advancement a demand. Lenovo must be know that Stealing Managers isn’t only way to get suitable employees way. Them must be build a good system to mark them own person with ability inside.
Even Lenovo group founder to ask the reporter questions also said Lenovo like manger who are group inside. The main reason is Lenovo want to continue them company culture. Now, Lenovo group face the new position them must be get new employees who get more strong skills as learning new things and strong innovation skills. They must be get good team work skills.
In the supply chain, Lenovo Group of China there is a clear advantage. In 2000, Lenovo in domestic enterprises in the first successful implementation of the ERP, and then at that time the supply chain management under the leadership of the Department, took two years to complete the project SCM. At the same time, Lenovo started a supply chain management system.
The logistics sector-lead VMI project created with the vendor Lenovo synergy values and customs, and re-planning of the procurement logistics network layout, with the supplier's inventory visualization of collaborative management, real-time monitoring of inventory levels, according to Lenovo in the single-product production depositors from the original 14 days down to five days; CTO process optimization project improved the delivery of customized products, Lenovo was the rapid rise of direct technical support operations. After a series optimize of 2002-2004, Lenovo build in the Chinese market gold supply chain, the response speed and cost control has surpassed Dell, In China Lenovo’s cost just 1/4 about Dell. Lenovo’s response speed need only four days (Dell for a week). However, in overseas markets, Lenovo will have to face the original IBM's huge losses and the slow response of the supply chain?
Cost pressures become Lenovo the enormous obstacles in overseas markets. But merging two huge companies in the supply chain integration has existed enormous difficulties. Therefore, Lenovo overseas is still used by IBM's original supply chain system. In China the use of the Lenovo deal set up before the supply chain system. So Lenovo CEO Amelio told the new Lenovo's global supply chain systems to two point, to balance First, Second is to achieve the lowest cost. Analysis several PC companies which are having more fierce competition with Lenovo group in the international are not difficult to find a problem with Lenovo. That is they are all have more quickly supply chain then Lenovo group has.
Dell's suppliers are in the core of its computer production base in Xiamen next to factories, Lenovo is the need for a global procurement. Now Lenovo ‘s customers outside China's orders need eight days to reach the point of production, while Dell only needs one hour. Data show that before the acquisition, Lenovo’s product inventory days are 22. 7 days, close to the global average PC inventory levels. After the acquisition, Lenovo supply chain costs of the total cost of around 6%, while Acquisition former only 1% more. In establishing agile supply chain there are still an unpredictable mistake, it is the assessment for the land and the combined effect. Which is more important for Lenovo’s development? It is Lenovo by purchasing land in Laikaluona states of the United States.
North Carolina will provide cheap land, but it can not provide competitive provider community. North Carolina has two characteristics: first, agriculture, tobacco production up to 700 million pounds annually, in the states, out of one; Second, the states of the cotton industry as the crown to Charlotte for the center, around the many small textile industry cities. Lenovo group should do is build a supply chain more quickly then Dell spent more than 20 years established electronic group. Lenovo has to do is to better integrate its internal resources in order to establish agile supply chain. Now there is a big problem inside of Lenovo group is Lenovo’s inside market.
An associate director complained, "We often encounter a back-end motherboards are out of the situation a few weeks, the various district customer manager get goods, Tun goods. " The reason, he believed that there are several aspects:
- Upstream manufacturers Intel and AMD led the industry in price oscillations;
- Two internal Lenovo is a "business forecasts" mechanism under a quarter of inaccurate forecasts, after mutual-blame;
- The three components of global procurement work is poor;
- four Lenovo's product line is the depth breakdown of demand led to parts of the complex.
These reasons appear because Lenovo’s interior management system get big problem.
Global marketing and double operation mode
Global marketing is an important step for an enterprise going to internationalization. Marketing development process is including seven steps. They are Consumers analysis, market analysis, competitor surveys and the analysis of their own advantages, analysis of distribution channels, the formulation of a preliminary marketing programs, economic development and evaluation and revision before the six steps until the formation of a coordination program. Europe and the US market is a highly sophisticated market, consumers have more strong sense of themselves. They are in choosing products more sensibly. The issue of treatment for products problem are harsher. Some dissatisfaction will resort to the law. Consumers have the power to the more sober understanding.
In the market, the saturation of the PC products is higher. Market share by several larger companies occupy. Dell, HP, Acer, is Lenovo strong competitor. Lenovo is more strangeness for the customer. More important is local customers are more strangeness for Lenovo. If they are in direct competition Lenovo only has a little chance of winning. Lenovo their advantages, can be more convenient to retain the original IBM's biggest customers. As we all know, most of IBM's customers are big customers, while them personal computers are few customers. Therefore the above address this specific Lenovo marketing information for them own tailored to a difference of an international marketing strategy.
Specific performance is now vigorously promoting Lenovo dual business model. And find the Olympic torch in the overseas Chinese. Now chairman of Lenovo Group Lauded as the core competitiveness of the Lenovo - Lenovo's business model is focused on the development of the host. The so-called Lenovo double- business model is the target customer classifications. They are covered two part. One is for Major clients. It’s including the government clients. Other is the PC customer. Lenovo group get two different systems to suit this two different groups. As every know this two different groups are look forward to different areas. They get different request for the computer.
So as this way Lenovo group can separate the two different services to two different customers groups to ensure satisfaction of customers and will not pass. After Lenovo Group in Germany and some other places that the experiment is indeed feasible. But Lenovo group said this double business model is them core competitiveness seems too hasty. This model is too easy to copy. We can continue analogy to Lenovo marketing for a war. As for the war, the most important thing is not win, but fought victory after how appease. This like Lenovo group get strong marketing in international and them double business model are successful attract the customer.
So that if Lenovo group can not cash in the same quality service as they are commitment for the customer is Lenovo group ruin upon themselves. The United States and the European market is a mature market. Consumers are rational consumers. If Lenovo rely on the strength of marketing get the original customer. But they are not lets original customer become loyal consumers. Lenovo is undoubtedly offending consumers. This is a bad news for any business. Such behavior like this is self-destructive brand image. Global strategy and differentiation strategy Undeniably, Lenovo was chosen different operations on the internationalization road. This is a wise move for Lenovo group.
Lenovo develop target markets mainly in Europe and the United States, some of the more mature markets. Competitors are more powerful. Lenovo Group on large customers has specific Differential Marketing. Whether in the products or marketing, Lenovo in overseas markets, chose the differences strategy of their own as an international strategy. Japan's Toyota Motor Corp. in this respect is the more successful. Today Lenovo faced situation is similar as several years ago Toyota faced. So in this side Lenovo group can learned from Toyota. A few years ago the American market is full of heavy car. The car like that are suit for American consumer buying psychology as a car. But Toyota's unique success is the choice of a different strategy.
Toyota and strong competitors are not for positive conflict. First of all competitors can relax vigilance. At least Toyota can reduce the trouble about legal before it development enough strong. Secondly use of the product differentiation gradually enters the mainstream market to be successful. When Toyota was get success in the United States mainstream market. Its competitors were hard to market out of there. Instead of the United States car market share declined much. Now, Lenovo Group which is the situation has attracted the attention of competitors. Lenovo has to be done is not in the local market has not yet possible before the firm and competitors have a positive conflict.
As Lenovo's deal with Dell and HP mail advertising time of the incident the same attitude. Lenovo should take the stable development as the first choice. The difference in the paralysis of the competitors is a more effective means. Competition in mind is not to put pressure on competitors. Reform Lenovo business DNA for build new company culture and global development Lenovo chairman Yang Yuanqing said for the high-speed flight refueling aircraft to the high-speed driving for car wheels. We can find how difficulty Lenovo group will be take for them reform business DNA. Commercial enterprises DNA of an enterprise is to determine the direction and life.
Lenovo in the international community can also depend on the success of Lenovo's commercial DNA. Enterprise is the concept of DNA from peter Ducker. Lenovo enterprises DNA is still insufficient to support the internationalization of Lenovo. An adapted to international enterprises DNA is not support as a success leader. It depends on the business system. This includes enterprises inside the decision-making power, organizational structure, information transmission and incentive mechanism. A healthy enterprises DNA can adapt to the market risk. If Lenovo group want be more successful in the international market it must be reform them business DNA.
Chinese enterprises are in the initial most commercial DNA, their flexibility in the application of event-based decision-making, rapid capture business, the first to enter the market; low-priced beat each other, and the lack of those international enterprise systems, scientific, a long-term multi-dimensional space-based game decision-making. Therefore, we must want to understand the development gap at first. Evolutionary their business DNA, in the integration resources, improve the companies create value skills. Mark the decision as more point. From the history of the development of Lenovo is not difficult to see that. Now Lenovo is on the way which is going to internationalization.
They must be facing different risks which are come from different regions and countries every day. If Lenovo can not upgrade their own enterprises commercial DNA, it will be difficult survive in the international competitive environment. Summery Lenovo group is going global is a way of Chinese business are going global. There are must be get five steps to learn. For a company which is want to going to global the most important thing is learning skills and reform the business DNA and build a new company culture to suite for new company. Remember that, you are an international company now. If you want to be more successful in the international market you must get the international business DNA.
You must be a company and you are not only taking the responsibility for the share holds. Your company should be take responsibility for the customer who comes from all over the world and the people who are come from all over the world. Your company is not only a company. It is an international public machine which supplies service for all over the world.
- Lian Xiangfengyun The Next Step by as Jigong W Sanderson Management Challanges Ronkainen and Michael H. Moffett http://business. sohu. com/20070122/n247764248. shtml
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