Liu Chuanzhi
Lenovo, China’s biggest computer maker is trying to reinvent itself to fight it way out of a recession. One step it has taken is to split the company into two new business units, one serving developed countries and the other focused on emerging markets.
The new arrangement replaces its current regional breakdown. The new plan will let each division focus on products that best suit the income levels in its target market. The reorganization comes a month after Liu Chuanzhi returned to his post as chairman of Lenovo, which has suffered declining sales amid the recession. Chief Executive Officer Yang Yuanqing replaced William Amelio in January.
Bloomberg reported Liu Chuanzhi stated Lenovo’s strategy is to focus on China and other emerging markets. The company is benefiting from the Beijing government’s subsidies for computer purchases in rural areas, he said. In the developed world, Lenovo’s revenue from notebooks and low-priced desktop computers has held firm while sales of most business PCs have dropped, he said.
Sales at China’s biggest personal-computer maker will fall about 5% to $15.5 billion for the fiscal year that ends this month, according to the average of 18 analysts’ estimates compiled by Bloomberg.
The company, which has offices in Beijing and Morrisville, North Carolina, will probably lose $121.9 million after a profit of $484.3 million last year.