In two years, Lenovo Group's revenue increased from 16.8 billion to 21.6 billion US dollars, an increase of 4.8 billion US dollars, ranking jumped from 499 to 449, compared to the first time in 2008 increased by more than 50. Now that he has been selected for Fortune 500 again, how did it really work?
What risk does Lenovo imply under this sprint?
Lenovo returned to the top 500
"This benefits from our double-fighting strategy of 'Defend + Attack', which enables the company to defend its leading position in China while actively expanding its business in emerging markets and building brand awareness." Yang Yuanqing, CEO of Lenovo Group, in an e-mail Reply to "First Financial Daily" said.
The so-called "guard + offense", that is, Yang Yuanqing has always advocated maintaining the share of the existing market, while at the same time opening up new markets. Lenovo has been the fastest growing company among the top five PC giants for six consecutive seasons.
Lenovo has become the global champion of emerging markets. The market share of the world's 12 countries has reached double-digit, with an increase rate of 3 times the market average, of which sales growth in Russia and the CIS reached 141.5%, India reached 64.9% , Latin America and ASEAN are 41.1%. Among them, the Indian market share has become double digits for the first time.
The headquarters of Lenovo Group China also did not stop the pace. The market share in the previous fiscal year reached a record high of 29.5%, and fully penetrated into the 46 markets.
Although the mature market was devastated by the financial crisis, Lenovo kept its original share and turned losses into profits. In the last financial year, Lenovo’s mature market share has reached 5.5%. It has strengthened the local market share in Japan and Europe by using two mergers and acquisitions respectively. Among them, the acquisition of German Medion will allow its German market share of more than 14%.
The latest ranking of Lenovo's PC market has gone beyond Acer to become the third largest in the world. If the above two mergers and acquisitions release effect in the coming year, the coach Liu Chuanzhi's declaration that “they will surpass Dell to become the second in the world at the end of the year†will come true and let the giant Hewlett-Packard nervous.
If based on the increase in the previous year, Lenovo’s revenue in the next year is expected to exceed US$26 billion. If placed in this year's Top 500 list, it will be the same as China Unicom, which ranks 370th.
The size of the cockroach
However, Lenovo Group is not at ease. Because several major rivals are impacting its backyard, the Chinese market has become a contest.
The most threatening is still Acer. It has launched an attack on Lenovo through the acquisition of Founder PC and its senior executives. According to the latest IDC data, Acer Asia Pacific sales volume in the second quarter of this year rose from fourth to second, surpassing Hewlett-Packard and Dell, and its market share increased sharply from 8.3% in the same period last year to 11.9% in the second quarter of the Asia Pacific region. Shipments increased by 62% year-on-year, ranking the top four brands.
The giant HP is recovering. In 2010, encountering a "quality door" made it suddenly fail. The PC industry in China experienced a serious decline, falling from second to fourth. Right now, HP Global CEO Li Aike hopes to integrate PC and mobile products with Palm's WebOS operating system, which was bought for $1.2 billion last year.
The latest news shows that Apotheker has begun to restructure the HP PC business and strengthen the resources brought by Palm. Hewlett-Packard even let Bradley, head of the personal systems department, take charge of the Chinese business.
Dell, on the other hand, is still very competitive in its direct sales business and has invested in server and IT services. Right now, it is looking to tablet computers to enhance marketing.
It seems that Yang Yuanqing faces enormous challenges. Will Lenovo's return to the top 500 disappear from the 2008 Top 500 list again as it did in 2009?
Yang Yuanqing told the newspaper that, in addition to continuing to maintain its dominant position in the PC field, "will spare no effort to develop the high-growth business of mobile Internet and digital home."
But it's not easy. The data shows that Lenovo's Music Phone and Le Pad currently only account for 3.7% of the Group's overall business, and it is only sold in China. Yang Yuanqing's goal for growth in mobile Internet services is: In the Chinese market, this year's Internet mobile phone should achieve double the growth, and the tablet should take more than 20% of the share. At the same time, it started to introduce flat products in the global commercial market.
This goal is somewhat difficult. Because opponents have already launched related products, despite the same poor sales. Liu Chuanzhi and Yang Yuanqing claimed that Apple, the only target opponent, was still riding a dust. Apple’s latest quarterly financial report showed that its revenue in Greater China has reached US$3.8 billion, an increase of six times year-on-year.
The performance of Apple Greater China has even surpassed Lenovo Group. Apple's revenue for the first three quarters of this year reached 8.8 billion U.S. dollars, and Lenovo's data for the previous fiscal year showed that the revenue for the region was 10 billion U.S. dollars. Even if Apple's revenue declines by $2 billion in the next quarter, it will also lead Lenovo.
The gap between the two mobile services is even greater. The annual revenue of Lenovo’s mobile business was only about US$800 million, which was a 47.4% year-on-year increase. However, in the third quarter, Apple’s iPhone sales in Greater China increased by five times.
What risk does Lenovo imply under this sprint?
Lenovo returned to the top 500
"This benefits from our double-fighting strategy of 'Defend + Attack', which enables the company to defend its leading position in China while actively expanding its business in emerging markets and building brand awareness." Yang Yuanqing, CEO of Lenovo Group, in an e-mail Reply to "First Financial Daily" said.
The so-called "guard + offense", that is, Yang Yuanqing has always advocated maintaining the share of the existing market, while at the same time opening up new markets. Lenovo has been the fastest growing company among the top five PC giants for six consecutive seasons.
Lenovo has become the global champion of emerging markets. The market share of the world's 12 countries has reached double-digit, with an increase rate of 3 times the market average, of which sales growth in Russia and the CIS reached 141.5%, India reached 64.9% , Latin America and ASEAN are 41.1%. Among them, the Indian market share has become double digits for the first time.
The headquarters of Lenovo Group China also did not stop the pace. The market share in the previous fiscal year reached a record high of 29.5%, and fully penetrated into the 46 markets.
Although the mature market was devastated by the financial crisis, Lenovo kept its original share and turned losses into profits. In the last financial year, Lenovo’s mature market share has reached 5.5%. It has strengthened the local market share in Japan and Europe by using two mergers and acquisitions respectively. Among them, the acquisition of German Medion will allow its German market share of more than 14%.
The latest ranking of Lenovo's PC market has gone beyond Acer to become the third largest in the world. If the above two mergers and acquisitions release effect in the coming year, the coach Liu Chuanzhi's declaration that “they will surpass Dell to become the second in the world at the end of the year†will come true and let the giant Hewlett-Packard nervous.
If based on the increase in the previous year, Lenovo’s revenue in the next year is expected to exceed US$26 billion. If placed in this year's Top 500 list, it will be the same as China Unicom, which ranks 370th.
The size of the cockroach
However, Lenovo Group is not at ease. Because several major rivals are impacting its backyard, the Chinese market has become a contest.
The most threatening is still Acer. It has launched an attack on Lenovo through the acquisition of Founder PC and its senior executives. According to the latest IDC data, Acer Asia Pacific sales volume in the second quarter of this year rose from fourth to second, surpassing Hewlett-Packard and Dell, and its market share increased sharply from 8.3% in the same period last year to 11.9% in the second quarter of the Asia Pacific region. Shipments increased by 62% year-on-year, ranking the top four brands.
The giant HP is recovering. In 2010, encountering a "quality door" made it suddenly fail. The PC industry in China experienced a serious decline, falling from second to fourth. Right now, HP Global CEO Li Aike hopes to integrate PC and mobile products with Palm's WebOS operating system, which was bought for $1.2 billion last year.
The latest news shows that Apotheker has begun to restructure the HP PC business and strengthen the resources brought by Palm. Hewlett-Packard even let Bradley, head of the personal systems department, take charge of the Chinese business.
Dell, on the other hand, is still very competitive in its direct sales business and has invested in server and IT services. Right now, it is looking to tablet computers to enhance marketing.
It seems that Yang Yuanqing faces enormous challenges. Will Lenovo's return to the top 500 disappear from the 2008 Top 500 list again as it did in 2009?
Yang Yuanqing told the newspaper that, in addition to continuing to maintain its dominant position in the PC field, "will spare no effort to develop the high-growth business of mobile Internet and digital home."
But it's not easy. The data shows that Lenovo's Music Phone and Le Pad currently only account for 3.7% of the Group's overall business, and it is only sold in China. Yang Yuanqing's goal for growth in mobile Internet services is: In the Chinese market, this year's Internet mobile phone should achieve double the growth, and the tablet should take more than 20% of the share. At the same time, it started to introduce flat products in the global commercial market.
This goal is somewhat difficult. Because opponents have already launched related products, despite the same poor sales. Liu Chuanzhi and Yang Yuanqing claimed that Apple, the only target opponent, was still riding a dust. Apple’s latest quarterly financial report showed that its revenue in Greater China has reached US$3.8 billion, an increase of six times year-on-year.
The performance of Apple Greater China has even surpassed Lenovo Group. Apple's revenue for the first three quarters of this year reached 8.8 billion U.S. dollars, and Lenovo's data for the previous fiscal year showed that the revenue for the region was 10 billion U.S. dollars. Even if Apple's revenue declines by $2 billion in the next quarter, it will also lead Lenovo.
The gap between the two mobile services is even greater. The annual revenue of Lenovo’s mobile business was only about US$800 million, which was a 47.4% year-on-year increase. However, in the third quarter, Apple’s iPhone sales in Greater China increased by five times.
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