Liu Chuanzhi
Liu Chuanzhi, the company’s newly reinstated chairman, told reporters during a conference call, said, ‘With the changes in the macroeconomic environment, our business in EMEA (Europe, the Middle East and Africa) and the Americas has been impacted greatly, so our company is increasing its focus on China, as well as emerging markets.”
China is Lenovo’s most important market, accounting for 45% of the company’s sales during the most recent quarter.
CIO rreported that the first President and CEO William Amelio had resigned at the end of his three-year contract.
He was replaced by Yang Yuanqing, who will step down from his current position as chairman of Lenovo to take on the CEO role. Liu, the company’s founder and former chairman, returned to his former position and Rory Read, Lenovo’s senior vice president of global operations, will take on the role of president and chief operating officer.
At the same time that Lenovo announced Amelio’s departure, the company reported a quarterly loss of $97 million on sales of $3.6 billion, which represented a decline of 20% compared to the same period during the previous year.
Bryan Ma, director of personal systems research at IDC Asia-Pacific, ‘It’s going to be tough in any of these markets, including China. Given their strength in China, I can understand why they want to focus on this area.’
Lenovo’s management also needs to realize that low prices alone will not be a guarantee of success in emerging markets. It’s more about value. It’s critical they don’t go into these markets looking only at price.’
Bringing Yang and Liu back to their previous positions echoes the earlier returns of Michael Dell to Dell and Steve Jobs to Apple during periods when these companies struggled to compete. But Yang and Liu, who ran the company at a time when its sales were largely confined to China, return to a dramatically different company, thanks to the 2004 acquisition of IBM’s former PC division.
To be successful in their bid to revive Lenovo’s fortunes, Yang and Liu will still have to improve the company’s position in the worldwide PC market, not just in China. When Yang and Liu announced plans to acquire IBM’s PC division, they said the deal would turn Lenovo into an international company and allow it to better compete against multinational vendors Hewlett-Packard and Dell.