A lengthy piece in Time on Lenovo adds to the growing body of articles in the business pops on the HK-based PC manufacturer. The mag interviews William Amelio, Lenovo's CEO and former head of Dell's Asia operations.
Much of what he says has been said before but one para did catch my attention:
Amelio wants to replicate Lenovo's China business model around the world. Execs have jetted to cities from Paris to Bangalore to teach local managers how things are done in China."
Now, western multinationals are continually told to "think global, act local". Lenovo apparently plans to ignore this advice and adopt a "one size fits all" strategy.
But I struggle to understand how Lenovo's "Chinese model" can be made to work on a global scale.
The distribution system in China is different from that that used in the west -- although Lenovo has successfully implanted it in India, apparently.
Consumers expectations, across a whole range of parameters -- specification, price and service -- are different too. And so too is the competitive environment in each country where Lenovo operates
But probably the biggest barrier to rolling out this global model, as we said earlier, is Lenovo's supply chain.
As Amelio readily admits, Lenovo's supply chain is "not world class" outside of China, although it has poached Dell's supply chain master to help fix this.
Its problems in the US seem eerily similar to those of TCL, the Chinese electronics giant, which is still trying to turn around ($) the loss-making TV business it acquired from France's Thomson three years ago, according to the Financial Times.
Another huge challenge is that Lenovo doesn't have a brand name in the US. Brand consultants have no doubt convinced it otherwise, but the Think line of PCs it inherited from IBM does not work as a stand-alone brand.
With enough time and advertising, there's no doubting that Lenovo can build a decent brand in the west, just as Korean manufacturers like LG have managed to do. But how much time can Lenovo afford to wait in a market where the competition gets tougher each day?
($) subscription required
