Lenovo Group, the world’s fourth largest maker of personal computers, is reportedly about to begin a restructuring platform aimed to increase the company’s global presence. Earlier the company said that it was able to boost market share by acquiring smaller players, but after it failed to take over Gateway and Packard Bell, it became clear that such approach did not work.
The only big and successful acquisition of Lenovo in the recent years was IBM’s PC business, which still mostly relies on corporate customers. Lenovo explains that because of this “over reliance”, its global PC market share remains modest. The company did not manage to take over Gateway in the U.S. or Packard Bell in Europe and lost its No. 3 spot on the PC market to Acer Group, which commanded 12.6% of computer shipments in Q3 2008, according to Gartner market tracking company, just a percent point behind Dell (13.6%). Furthermore, Lenovo did not, at least openly, fight for Fujitsu-Siemens, when the joint-venture was about to break up in the recent months.
According to China-based media, Lenovo is about to announce a serious reorganization plan, reports Financial Times news-paper. The stock of Lenovo reportedly started to get more expensive on the news.
“The reason we are seeing a positive reaction in the market is that the restructuring that is rumoured now – different from the steps we’ve seen over the past months – seems to include management changes at the top. Somebody has to take responsibility for the problems the company has been experiencing,” said Charles Guo, an analyst at JPMorgan in Hong Kong.
Analysts believe Bill Amelio, Lenovo’s chief executive, has done well in integrating Lenovo’s and IBM’s businesses in terms of operational issues and the supply chain. But in strategic decision-making, research and development and marketing, the company still consists of two separate organizations, which causes certain delays in terms of time-to-market. Analysts say that Lenovo called in consultants who gave obvious recommendation to reposition the company with a focus on consumers rather than corporate customers.
Clearly, Lenovo will not be able to reposition itself as a consumer-oriented PC maker really quickly, which means that its market share will hardly improve amid economic downturn. However, once it’s done, Lenovo will have a very strong brand both among consumers and corporate buyers.