Behind the scenes of Lenovo’s global business
Sometimes “you need to see it to believe it”. This certainly was true for me when I was invited by Lenovo to head off to China to check out their offices where I was promised that I would see more than just a company that sells PCs and Laptops. Having spent the day at just one of their office parks, I came to discover that Lenovo’s range extends far beyond “just computers”.
The Lenovo Numbers
Lenovo has boasted some serious numbers : Number 1 in the world in PC sales is no small feat for any company but keeping that title for the past 8 quarters is impressive. Lenovo is number 3 world-wide in server revenue and number 3 in smartphones selling 76 million units which is an increase of 52% over the previous year. They are also number 3 in the world in Tablet sales.
What does that mean in terms of revenue ? For the fiscal year ended December 31, 2014 the company has earned $14.1 billion USD in revenue where 65% of revenue is from PCs, 24% from Mobile and 9% from Enterprise. This is a remarkable shift in the global company when you consider that in 2013, PCs accounted for 81% of the bottom line. What is also interesting to note is that two-thirds of group revenue is now derived from EMEA, the Americas and Asia Pacific, verses less than half of revenue from outside China three years ago.
Clearly the company is evolving and thinking beyond their Chinese roots.
Part of this success is owed to the fact that that the company’s top leadership is made of up of 7 nationalities allowing each executive to bring their localised country’s input into the company. There doesn’t seem to be a “Head Quarters” mentality where every new concept must originate out of Head Office only. Each region contributes to Lenovo’s success by acting locally and catering for their own market.
Motorola or Lenovo – which is it ?
Having purchased Motorola, Lenovo now has two mobile brands on hands: Lenovo and Motorola. Therefore in order to avoid market-confusion between the brands, Lenovo has segmented their markets based on the country they are operating in. In most of Europe such as the UK, France, Germany, Spain, Holland, the Nordic Regions and others, Lenovo will use its Motorola brand. Assuming that Motorola is the recognisable brand that people will relate to. However in other regions where Motorola was not previously available only the Lenovo Mobile brand will be available.
Testing the Box
The one department that stood out for me was the Lenovo Reliability Labs. This is a 4000 square meters facility spanning multiple floors where each PC and components in every conceivable configuration is run through 34 different tests beating the industry standard of 28 tests. The tests emulate 6 month of heavy usage of equipment where sensors monitor everything from current, to temperature behaviour (from minus 40 degrees Celsius to plus 60 degrees Celsius), to equipment failure. In order to speed up certifications, Lenovo has added an Analysis component to their lab so that when a component fails, they are able to inspect the component and understand why it failed onsite instead of sending the component away for analysis which delays compliancy certification.
One of the test that impressed me was the fact that Lenovo not only tests their computers but also the packaging that their computer goes into. The industry standard is to drop-test a computer from 1.5 meters and whilst this is acceptable for the US market where computers are delivered via a delivery van, there are regions where equipment is delivered via military graded trucks that are sent off-road and even delivered via donkeys to remote areas. These require a completely different set of stress tests. Recognising this, Lenovo has improved their packaging allowing for a drop-test from up to 2 meters. This factor alone had resulted in their failure rate of being 1.7% in 2000 compared to other brands in the same year who had a 17% failure rate.
Amazing technology and systems are being used in this labs however due to confidentiality reasons, no photos were allowed….
Innovation Never Stands Still
The common thread that runs through Lenovo is the “Protect and Attack” strategy. Lenovo continues to protect its core PC business, while attacking new avenues in Mobile, Enterprise and Ecosystem/Cloud businesses. Innovation in Lenovo continues to drive the business which is evident by a record 77 awards being won at the Consumer Electronics Show across every product category, and at the Mobile World Congress in Barcelona in March, Lenovo and Motorola won a further 33 awards signalling that Innovation at Lenovo truly doesn’t stand still.
