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(Affiliated by Gauhati University)


This is to certify that the Project Report on

ASSAM Submitted in partial fulfillments for the award of the degree of




Is a record off bonafide Training carried out by KRISHNA NEWAR POMPI GOGOI MONALISHA DEORI SUMITA PAUL Under my supervision and guidance of Mr. Rahul Nandi and that no. part of his report has been submitted for the award of any other Degree/Diploma/Fellowship or similar titles or prizes.



Name: Signature: Signature:

I here by declare that the project report conducted on

Under the guidance of

Mr. Rahul Nandi

Submitted in partial of the requirements for the Degree of



Is my original work and the same has not been submitted for the award of any other Degree/Diploma/fellowship or other similar titles or prizes.

Place: Guwahati Date: /10/2011



I consider it a privilege whole heartedly to express our gratitude and respect to each and every one who guided and helped us in the successful completion of this project.

I am grateful to our institution RSB for having provided me with the facilities which has made this project a success.

I am extremely grateful to my project guide Mr. Rahul Nandi for their support and continuous encouragement.

I am indebted to my parents and my friends for their invaluable help and gathering information for the project




Lenovo is a Chinese multinational computer company that develops, manufactures and markets desktop and notebook computers, workstations, servers, storage drives, IT management software, and other related products and services. Lenovo was incorporated in Hong Kong in 1988 under its previous name, Legend. Lenovo's principal operations are currently located in Beijing, China, Morrisville, North Carolina in the United States, and Singapore. Lenovo is the world's second largest PC maker and markets the ThinkPad line of notebook PCs and ThinkCentre line of desktops. These brands became part of Lenovo's offerings after its 2005 acquisition of IBM's personal computer business. Lenovo also sells the IdeaPad line of notebook computers. Lenovo markets its products directly to consumers, small to medium size businesses, and large enterprises, as well as through online sales, company-owned stores, chain retailers, and major technology distributors and vendors.

HISTORY OF LENOVO COMPANY 1981 IBM PCD introduces its first personal computer, the IBM PC 1984 IBM PCD introduces its first portable computer, the IBM Portable PC, weighing 30 pounds. With an initial capital outlay of only RMB200,000, (US$25,000) Lenovo's founding chairman Liu Chuanzhi, together with 10 like-minded colleagues, launches the New Technology Developer Inc. (the predecessor of the Legend Group) funded by the Chinese Academy of Sciences. 1986 IBM PCD announces its first laptop computer, the PC Convertible, weighing 12 pounds. 1987 IBM PCD announces the Personal System/2 personal computer. 1988 Legends Chinese-character card receives the highest National Science-Technology Progress Award in China. Legend Hong Kong is established. 1989 IBM PCD announces the Personal System/2 personal computer. 1990 1990 The very first Legend PC is launched in the market. Legend changes its role from that of an agent for imported computer products into that of a producer and seller of its own branded computer products. Legend PCs are ratified and accepted by the China Torch Program. 1992 IBM PCD introduces ThinkPad, the industrys first notebook with a 10.4 inch color Thin Film Transistor (TFT) display and a TrackPoint (red ball) pointing device. 1993 Legend enters the Pentium era, producing Chinas first "586" PC. Legend establishes 1+1 retail network. 1994 IBM PCD introduces the industrys first notebook with integrated CD-ROM, the ThinkPad

755CD. 1995 IBM PCD introduces the butterfly keyboard. IBM PCD moves from Boca Raton, Florida, to Raleigh, North Carolina. Legend introduces the first Legend-brand server. 1996 Legend becomes the market share leader in China for the first time. Legend introduces the first Legend brand laptop. 1997 IBM PCD introduces the industrys first notebook equipped with a DVD-ROM, the ThinkPad 770. Legend signs an Intellectual Property agreement with Microsoft, the most valuable deal ever made in China at the time. 1998 IBM PCD introduces the industrys first ThinkLight, a small light that illuminates the keyboard in low-light work environments, such as onboard an airplane. The millionth Legend PC comes off the production line. Intel Chairman Andy Grove attends the ceremony, and takes the PC for Intels museum collection. Legend establishes the first Legend Shop. 1999 IBM PCD introduces the industrys first mini-notebook, weighing under three pounds, with standard ports and a keyboard that is 95 percent of full-size. IBM PCD announces its exit from the retail business. IBM PCD introduces the industrys first PC with an embedded security chip. Legend becomes the top PC vendor in the Asia-Pacific region and heads the Chinese national Top 100 Electronic Enterprises ranking. Legend launches pioneering Internet PC, with its "one-touch-to-the-net" feature, which enables millions of Chinese PC users to easily access the Internet. 2000 2000 IBM PCD ships its 10-millionth ThinkPad notebook PC. Legend becomes a constituent stock of the Hang Seng Index - HK. Legend ranked in top 10 of world's best managed PC venders.

2001 An IBM notebook with an embedded security chip becomes the industrys first notebook to be certified by the Trusted Computing Platform Alliance, an industry body setting data security standards. Legend successfully spins off Digital China Co. Ltd., which is separately listed on the Hong Kong Stock Exchange. Legend appoints Yuanqing Yang President and CEO. Legend first introduces "digital home" concept and launches accessories-enabling PC. 2002 IBM PCD introduces ImageUltra and Rapid Restore, the first automatic data recovery technologies of their kind. IBM PCD announces desktop PC outsourcing pact with Sanmina-SCI. Legend launches its first technological innovation convention, Legend World 2002, which opens up Legends Technology Era. Legend introduces its visionary concept for the future of technological development and applications, its Collaborating Applications project, as well as its strategies for implementing Collaborating Applications. Legends supercomputer, the DeepComp 1800 makes its debut. It is Chinas first computer with 1,000 GFLOP (floating point operations per second) and Chinas fastest computer for civilian use, ranked 43rd in the Top 500 list of the worlds fastest computers. 2003 IBM PCD introduces the industrys first notebook with an extended battery life of up to 11 hours. IBM PCD introduces its ThinkCentre desktop PC line. IBM PCD introduces its Active Protection System, the industrys first notebook with an airbag for hard drive and data protection in case the system is dropped. IBM PCD ships its 20-millionth ThinkPad notebook PC. IBM PCD introduces its ThinkCentre desktop PC line. Legend announces the birth of its new "Lenovo" logo to prepare for its expansion into the overseas market. Based on the collaborative application technology, Lenovo initiates IGRS Working Group, in cooperation with a few large companies and the Chinese Ministry of the Information Industry, to promote the formation of the industrial standard.

Lenovo launches a Tech RoadShow 2003 nationwide to promote Lenovo's innovation. Lenovo successfully develops DeepComp 6800 in November 2003. It ranks 14th on the global list. 2004 IBM PCD introduces the ThinkCentre ultra small desktop PC, no larger than a box of corn flakes. IBM PCD introduces the first notebook with an integrated fingerprint reader. IBM PCD ships its 100-millionth PC (counting both desktop and notebook computers). Lenovo becomes an Olympic worldwide partner. It is the first Chinese company to become a computer technology equipment partner of the IOC. Lenovo decides to develop the rural market by launching the "Yuanmeng" PC series designed for township home users. Lenovo and IBM announce an agreement by which Lenovo will acquire IBMs Personal Computing Division, its global PC (desktop and notebook computer) business. The acquisition forms a top-tier (third-largest) global PC leader. 2005 Lenovo completes the acquisition of IBM's Personal Computing Division, making it a new international IT competitor and the third-largest personal computer company in the world. Lenovo announces the closing of a US$350 million strategic investment by three leading private equity firms: Texas Pacific Group, General Atlantic LLC and Newbridge Capital LLC. Lenovo establishes a new Innovation Center in Research Triangle Park, N.C., to enable customers, business partners, solution providers and independent software vendors to collaborate on new personal computing solutions. Lenovo introduces the industry's thinnest, lightest and most secure Tablet PC, the ThinkPad X41 Tablet. Lenovo introduces the first widescreen ThinkPad with embedded wireless WAN, the ThinkPad Z60, available for the first time with a titanium cover. Lenovo becomes the world's largest provider of biometric-enabled PCs by selling its onemillionth PC with an integrated fingerprint reader. William J. Amelio is appointed as CEO and President of Lenovo. 2006 Lenovo introduces the first dual-core ThinkPad notebook PCs, improving productivity and extending battery life for up to 11 hours.

Lenovo technology flawlessly supports the 2006 Olympic Winter Games in Torino, Italy, supplying 5,000 desktop PCs, 350 servers and 1,000 notebook computers. Lenovo also hosts seven Internet i.lounges for use by Olympic athletes and visitors. The first Lenovo-branded products outside of China debut worldwide. Researchers, scientists and product design teams from around the world combine Lenovo's heritage in enterprise and consumer PC technology to design the Lenovo 3000 product line, which features new desktop and notebook models specifically designed to provide worry-free computing to the small business market segment. 2007 The Beijing Organizing Committee for the Olympic Games selects a Lenovo-designed Olympic Torch as the winning design from among 300 entries. Named the Cloud of Promise, the Lenovo-designed torch will travel the world at the front of the global Olympic Torch Relay. Lenovo delivers a supercomputer for a Formula One racing team that will provide eight teraflops of computing power. Lenovo introduces first EPEAT Gold Monitor with new visuals portfolio. 2008 Lenovo enters the worldwide consumer PC market with new Idea brand. Lenovos ThinkPad X300 is called the best laptop ever by BusinessWeek magazine. Lenovo becomes the first PC manufacturer to announce a client virtualization platform. Lenovo provides a smooth, error-free performance at the Beijing Olympic Games. The Lenovo solution which included more than 30,000 pieces of equipment and nearly 600 Lenovo engineers powered the largest sporting event in history. 2009 Lenovo leads PC industry in using recycled material. Lenovo becomes senior sponsor of Computing Equipment and System Operation Service for the World Expo 2010 in Shanghai. Lenovo debuts Enhanced Experience for Windows 7, delivering significantly better performance for the new operating system. Lenovo sells its 1 millionth Idea Product. 2010 Lenovo achieves its highest ever worldwide market share and becomes the worlds fastest growing major PC manufacturer.

Our Vision
At Lenovo, our vision is that Lenovo will create personal devices more people are inspired to own, a culture more people aspire to join and an enduring, trusted business that is well respected around the world. This vision guides us in pursuit of our mission to become one of the world's great personal technology companies. We will accomplish this through:

Personal Computers: Lead in PCs and be respected for our product innovation and quality. Convergence: Lead the industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and web content. Culture: Become recognized as one of the best, most trusted and most well-respected companies to work for and do business with.

Our Culture
Our culture defines us it's our DNA. We call it the Lenovo Way and it's the values we share and the business practices we deploy. It's how we address our day-to-day commitments. The Lenovo Way is embodied in the statement: We do what we say and we own what we do. That culture also drives how we work every day, utilizing what we call the 4 P's:

We PLAN before we pledge. We PERFORM as we promise. We PRIORITIZE the company first. We PRACTICE improving every day.

Our culture is what has enabled us to consistently raise the bar on delivering break-through innovations, award-winning designs and strong financial performance..

Our People
At Lenovo, our people share a common aspiration to be the very best. Whether serving our customers, working together as a team or contributing to the community, we are working to build a unique company delivering unparalleled products created and supported by people who represent a wealth of cultures and experiences. Our strength lies in this diversity. And every day, on every project, we are creating a new language for inclusion and respect for others. We are dedicated to fostering an environment that encourages entrepreneurism and ownership. A workplace where people's talents can be challenged and their efforts recognized and rewarded.

Lenovo nose-diving into rural market
China's top PC maker, Lenovo Group Ltd, by introducing cheaper computers, is plunging head-on into the country's rural market, where PC penetration is low and purchasing power is weak. Analysts said the firm's low-price strategy will help it strengthen its market share, which is shrinking. But they are divided about the long-term profitability of the low-priced PCs. Lenovo last week introduced a new consumer PC series and an e-classroom solution aimed at users in ordinary households and the education sector in townships. The retail prices for the new PC models will range from 2,999 Yuan (US$361), a record low, to 5,999 Yuan (US$723). Lenovo previously focused on PCs that cost more than 5,000 Yuan (US$602). "The growth of the whole PC market is lackluster. But the township market remains largely untapped," said Yang Yeaning, chief executive officer of Lenovo Group Ltd. The launch of the low-price PCs is part of Lenovo's strategic shift. He expects shipments of the new PC series will reach 800,000-1 million units within a year. Beijing-based CCW Research said tapping the low-end market will increase Lenovo's market share. And so it did."Lenovo is delivering a message that it intends to cover all market segments, from high-end to low-end, "The low-price strategy puts pressure on some regional brands.Besides, operating systems are not pre-installed in the DIY market. "We have been put in an unfair position," said Lu. "If all vendors pre-installed legitimate operating systems and pay the VAT, our market share would be much higher." GAO estimates gross profit margins for Lenovo's new series PCs will be about 8 per cent.

For fiscal year 2003, Lenovo's profit margins were 14.6 per cent, compared with 14.8 per cent in the last fiscal year. Edward Yu, president of research house Analysis International, predicted the profit margins will be much lower. "The shipments of PCs priced at 2,999 Yuan are unlikely to reach 100,000 units. Otherwise, it will be unprofitable," Yu said. "The most likely scenario is quite a few of the PCs will be available in the marketplace. The low-priced move is largely a promotion strategy." Since Lenovo is not adopting a "direct-sales" strategy, the firm is unlikely to save the "channel cost," which usually accounts for nearly one-fifth of the price, Yu explained. Lu reaffirmed Lenovo will not follow Dell's "direct-sales" strategy. Lenovo's low-price strategy is expected to spark a round of price-cutting in China's PC industry. China's No 2 PC maker, Founder Technology, "will not rule out the possibility of making a similar move," said I Dongfeng, the company's managing president. Qi last week said he agreed China's rural market promises much potential. "I think a PC price tag from 2,000-3,000 Yuan (US$241-361) for the rural market is appropriate," he said. Another PC maker, Langchao, plans to launch a new PC model that will cost about 1,999 Yuan (US$241), some media have reported. A new round of price-cutting is expected dent profit margins industry-wide. Profits have been dropping due to intense competition. Statistics, released by Analysis last week, indicate PC sales in China in the year's second quarter reached 17.53 billion Yuan (US$2.11 billion), up 17.8 per cent year-on-year.

Shipments in the quarter totaled 2.91 million units, down 0.4 per cent compared with previous quarter, but up 39 per cent year-on-year. Lenovo's market share dropped 5.6 per cent, year-on-year, during the period, Analysis said. Barcelona FC's super soccer star Ronald de Assis Moriera of Brazil, better known as Ronaldinho has been named as the official representative of china's PC giant, Lenovo, in its global promotion campaign. The two sides have signed a confidentiality agreement but Lenovo declined to talk about the details, the expenses in particular. According to Chen Shaopeng, senior vice-president of Lenovo Group and president of Lenovo's greater China operation, partnering with an international sport star is an important part of Lenovo's global marketing strategy. Lenovo hopes Ronaldinho's personal charm and influence worldwide will help Lenovo's global promotion campaign and gain popularity. During the one-year promotion, Lenovo will be authorized to use Ronaldinho's personal images as well as all the brands of Barcelona FC. "I believe that combination of the charm of soccer and the sci-tech of computer will bring more color and pleasure to people's life, noted Marc Ingle, vice president of Barcelona FC. The list of the commercial value of soccer stars done by Germany-based BBDO Consulting months before shows that Ronaldinho, with 32.6 million pounds tops the rank.


The ThinkPad line of laptop computers was originally sold by IBM and are known for their boxy black design, which was originally modeled after a traditional Japanese lunchbox. Since early 2005, ThinkPads have been sold by Lenovo, which purchased the IBM personal computer division in the same year. Known for their reliability, quality, durability, and performance, ThinkPads are popular with businesses, schools, and individual users. The ThinkPad has also been used in space, and is the only laptop certified for use on the International Space Station IdeaPad

The IdeaPad line of consumer-oriented laptop computers was released in January of 2008. The IdeaPad is entirely the result of Lenovo's own research and development. Unlike the ThinkPad line of notebooks its design and brand were not inherited from IBM. The IdeaPad design marked a deviation from the business-oriented ThinkPad laptops, towards a more consumer-focuses look and feel.Among these changes were the inclusion of a glossy screen and the omission of the traditional ThinkPad TrackPoint. Notebook Review said the keyboard had a "distinctive ThinkPad feel" and "the touchpad and touchpad buttons were smooth and responsive."


The ThinkCentre line of desktops was introduced in 2003 by IBM and this product line has been sold by Lenovo since 2005. Following Lenovo's purchase of IBM PCD, Lenovo has continued to develop the ThinkCentre line of desktop products. LePad

As of May 2011 Lenovo planned to introduce two tablet devices during the summer of that year in the United States. The tablet intended for the consumer market would be marketed under the Idea brand while the tablet intended for the business market would be marketed under the ThinkPad brand. Lenovo has stated that the LePad branding used in China would not be used to sell tablets in the United States


Lenovo launched the LePhone in order to compete against Apple's iPhone and other smart phones. The LePhone is offered at a relatively low price point, about half the cost of an iPhone, and is customized for the Chinese market. The LePhone has benefited from strong support from Chinese mobile phone companies and content providers such as Baidu, Alibaba, and Tencent. The LePhone supports the GSM standard, China's indigenous TD-SCDMA 3G standard used by China Mobile, the WCDMA 3G standard used by China Unicom, and China Telecom's CDMA 2000 network.

Other products

Lenovo makes a variety of products for world wide sale. These products include:

ThinkStation workstations ThinkServer servers Lenovo 3000 J Series desktops Lenovo 3000 C, N, and V Series laptops Computer displays ThinkVision projectors and monitors

Market structure
The computer industry is characterized by a quasi-oligopolistic structure. It is dominated by 5 major global players although there are a lot of small companies which often serve only regional markets. The following graph illustrates the division of the computer market of each individual company. Company HP DELL LENOVO ACER TOSHIBA OTHERS Market share 18.1% 15.6% 7.8% 9.4% 4.4% 44.7%

HP, 18.10%

OTHERS, 44.70% DELL, 15.60%

ACER, 9.40% TOSHIBA, 4.40%

LENOVO, 7.80%

Pricing strategy of Lenovo

There are many companies in the market, which have a better reputation than Lenovo in the computer world. Hard work of the company and a strong commitment to providing the best for the people helped with the harvest of a global customer base. This is the main reason why Lenovo has become the worlds fourth largest provider of PCs worldwide in a very short time. If a person decides to buy a computer system, Lenovo India is the name of a very respectable place in the priority list.The company also tightened its grip on the PC market through the acquisition of IBMs PC division in 2005. Lenovo is not a name that is restricted for a certain product, but that there is a long list of products that are sold under the same brand needs. Some of them are as follows: Lenovo Think Centre Think Station Lenovo Idea Centre desktop Lenovo Think Server consumer-oriented IdeaPad notebooks Lenovo 3000 J Series desktops Lenovo 3000 C, N and V series notebooks and LCD monitors CRT projectors and Think Vision monitors

Lenovo signed an agreement allowing them to sell under the brand name of IBM laptops and desktops by 2010. Lenovo notebooks and business machines are available with Linux preinstalled.

Lenovo Pricing in ASSAM

Pricing strategy of this company is one that takes note of the key considerations of the customer, which is nothing more than the price of the product. Probably for this reason, almost every product that comes from the production of the parent company is reasonably priced. Lenovo has been very aggressive in its pricing strategy with its different series of laptops and respective models. Lenovo initially followed IBMs pricing policy. This can be considered skimming done by a company which wants to earn as much as possible. Lenovo Laptops prices are in the range of Rs.24,500 to Rs.54,000.There are several high end models also which cost more than Rs. One Lakhs. Dell is the market leader which offers an AMD Athlon processor in its lowest costing desktop worth 16000Rs.In the same category, Lenovo introduced the 3000H series-a P4 processor for Rs 18000/-.Lenovo has always maintained a product mix such as bread and butter products like 3000H series and high end products like Thinkpad and Think centre which helps Lenovo develop a vast range in its prices. The product mix of IBM is more powerful than before. They are doing what IBM did not do.

Be a big firm and give world class products

Dont forget to generate volumes

Maintain your market share

The pricing of some models are as follows:

Lenovo Y Series Laptops are priced from Rs. 32000-54000/Lenovo G Series Laptops are Priced from Rs. 25000-36000/Lenovo N Series Laptops are Priced from Rs. 35000-56000/Think pad XX&Z series are priced from Rs. 58000-1,10,000. Lenovo constantly offers discounts on its products through its showrooms and online purchases which are often in the range of 25-30%.Also there are many coupon codes and promotional codes available on all product models which add to the total discount.

In a recent promotional scheme, a 10 mega pixel canon camera was being offered with the Ideapad Y& Z series notebook. Capturing Market share: The objective of the company is to capture a substantial market share and attract more and more buyers to buy its products. Indian consumers are very price sensitive .Dell dominated HP over the last few years because of their low pricing model. Highly priced brands like Sony have also reduced the prices of their laptops .The Indian market is slightly different .At around 8 million units a year, it is a sixth of chinas market. For Lenovo ,to win in Asia, it believes it has to win India ,Its market share is about 7% and is the number five player in the Indian market. Competitor Pricing: The pricing strategy of Dell has been to offer the lowest pricing based on the configuration chosen. The customer has the flexibility of choosing the configuration and gets the same at competitive prices. HP follows a perceived value pricing for its pavilion range of laptops and an extremely low cost pricing strategy for its Compaq Presario range of notebooks. Sony follows a skimming strategy in all its models. The following table compiles the current market rates for various players.

Dell Core i5,500GB,3GB RAM-44000/Dell Inspiron 14R Core i5-Rs 39000/Core 2 Duo,4GB RAM36500/Dell Vostro Laptop A840, 1GB RAM29000/-

HP HP Pavillion DV 646500/HP Pavillion 1404TU39500/HP Pavillion DV2,4GB RAM-34000/HP Pavillion DV2,1GB RAM-32900/-

Lenovo Lenovo Edge series core i5-39000/Lenovo Ideapad G430-30500/Lenovo Ideapad G450-26500/Lenovo S10 ,1 GB RAM-19500/-

Sony Vaio core 2 duo,i5 - 45000/Sony Vaio core i337000/Sony Vaio,1G RAM-32500/Sony Vaio VPCYA15FG29000/-

Based on competitors price and market position, lenovo has two options for pricing.

Value pricing-offering the customers high quality at lower price Going rate pricing: following the pricing strategy of the competitor and pricing the laptops at a rate just lower than that of the market leader.

Lenovo in India has selected the value based pricing. It is not directly involved in price wars with competitors. It offers a large range of products in the Indian market with substantially lower price and unique product features. The main goal of the company is to capture the maximum market share and then go for alternate pricing. Alternate pricing strategy. Lenovo is now following the protect and attack strategy globally Protect: China / Mature Relationship; Attack: Emerging / Mature Transactional Profit Engine: Think & Relationship; Growth Engine: Idea & Transaction

In order to maintain its market share and remain competitive in the Chinese as well as the global market it is important that the company adopts different pricing strategies for different segments of the market. Some of the strategies can be useful: 1) For the developing markets of Asia, the company should adopt going rate pricing strategy after achieving sufficient economies of scale. Lenovo is a market follower in India after Dell &HP and this strategy can allow them to ensure values as well as the optimal price of the product. With its Protect and Attack global strategy, Lenovo India has already grown from an overall 7.2 percent market share in Q1 2010 to 10 percent in Q1 2011. Of late it has been following the going rate pricing for some of its products like Lephone and ideapad tablet. Lenovo has launched LePhone as an Apple iPhone rival with a low price strategy and customized for Chinese users. LePhones price is only equal half of the iPhones, even when Apple just cut the prices of iPhone handsets in the Chinese market. Also, it has launched IdeaPad A1, at a price of the $199 Android tablet. 2) Lenovo should create a deeper impact in the Asian markets by encompassing aggressive retail push, deeper channel penetration and channel engagement, and introducing an exclusive product range. The company should increase its touch points by adding exclusive retail outlets, resellers and authorized service centers. Lenovo currently has 540 retail outlets in India. It should also expand into Tier 3 & 4 cities. 3) Lenovo should adopt Multi-Model Strategy to Battle competitors. It should increase its brand recognition and be a more active player in the Tablet and i- phone markets to take over other competitors heads on. Like the personal computers market, the company should realize that users tend to have different demands when it comes to their tablet computers. Their main focus should be targeting specific users with specific products. 4) For European markets, Lenovo can adopt a perceived value based pricing. The customers in the developed markets will be better able tpo understand the product value. The recent acquisition of Medion: Mobile Internet device and services business provider in Western Europe Complements Lenovos growing Mobile Internet and Digital Home business .It will boost device and services capability. Medions existing relationships and experience with retailers and telcos will be a great asset for Lenovo. 5) For the Chinese market, company should continue its competition based pricing. The Chinese market is huge and flooded with number of competitors. Lenovo should strengthen China leadership and retain its market share by widening the gap with the competition.

Financials and market share

Lenovo is a global Fortune 500 company with a special focus on personal computers with annual sales of over $21 billion. Lenovo is the dominant supplier of computers in mainland China and the second largest computer maker by volume in the world. After years of expansion and numerous acquisitions Lenovo became the world's second largest supplier of personal computers in the world during the third quarter of 2011. Thanks to rapid sales growth in all markets, Lenovo commanded around 13.5% of the worldwide computer market as of October 2011. The company's expansion was boosted in part by the joint vendor with NEC in Japan and aggressive marketing to both the professional and consumer. Yang Yuanqing said that Lenovo would continue its expansion by focusing on technological convergence in the areas of smart phones, tablets, personal computers, and "smart TV." "We must deliver a great user experience across all platforms to achieve our goal and become the leading personal technology company in the world," he stated. In the second quarter of 2011, Lenovo was the third largest vendor of personal computers in the world.[18] For the year ending with third quarter 2010, its market share increased from 8.6 percent to 10.4 percent.[19] The company is the largest seller of PCs in China, with a 28.6% share of the China market, according to research firm IDC in July, 2009. It reported annual sales of $14.9 billion for the fiscal year ending 2008/2009 (ending March 31, 2009). During the first quarter of 2011 Lenovo controlled 31.7% of the Chinese personal computer market when measured by units sold. Lenovo reported a 98.3 percent rise in profit to $108.8 million during the first quarter of 2011, up from $54.86 million during the same quarter of the previous year. Lenovo shipped 10.28 million personal computers in the first quarter of 2011. In May 2011, Lenovo reported fourth-quarter earnings of $42 million on sales of $4.88 billion. Wall Street was expecting revenue of $5.08 billion, according to Thomson Reuters

As of October 1, 2011, 58% of Lenovo stock was held by the general public, 34% by Legend Holdings Limited, and 8% by other entities. The Chinese Academy of Sciences owns 36% of Legend Holdings.[21] On September 4, 2009, Oceanwide Holdings Group, a private investment firm based in Beijing, bought 29% of Legend Holdings, the parent company of Lenovo, for 2.76 billion yuan.[22] IBM acquired a 18.9% share of Lenovo in 2005 as part of Lenovo's purchase of IBM's personal computing division.[23] Since then IBM has steadily reduced its holdings of Lenovo stock. In July 2008 the IBM's interest in Lenovo fell below the 5% threshold that mandating public disclosure.[24] In November 2010, it was reported that private equity firms TPG Capital and General Atlantic were seeking to exit Lenovo with a HK$1.56 billion share placement.[25] Responding to claims that Lenovo is a state owned enterprise CEO Yang Yuanqing said: "Our company is a 100% market-oriented company. Some people have said we are a state-owned enterprise. It's 100% not true. In 1984 the Chinese Academy of Sci-ences only invested $25,000 in our company. The purpose of the Chinese Academy of Sciences to invest in this company was that they wanted to commercialize their research results. The Chinese Academy of Sciences is a pure research entity in China, owned by the government. From this point, you could say we're different from state-owned enterprises. Secondly, after this investment, this company is run totally by the founders and management team. The government has never been involved in our daily operation, in important decisions, strategic direction, nomination of the CEO and top executives and financial management. Everything is done by our management team."[26] Yang dramatically increased his ownership stake in by acquiring 797 million shares in 2011. As of June 2011, Yang owns an 8 percent stake in Lenovo. He previously owned only 70 million shares. In a statement, Yang said, "While the transaction is a personal financial matter, I want to be very clear that my decision to make this investment is based on my strong belief in the company's very bright future. Our culture is built on commitment and ownership - we do what we say, and we own what we do. My decision to increase my holdings represents my steadfast belief in these principles.

Mergers and acquisitions


Lenovo made its acquisition of IBM amid a backlash in congress against Chinese companies trying to purchase American businesses. Chinese oil company CNOOC abandoned its attempt to buy Unocal and appliance maker Haier Group ended its efforts to acquire Maytag. Lenovo has moved its global headquarters to Purchase, New York and kept most of its former IBM development staff in North Carolina. Lenovo Mobile On November 27, 2009, Lenovo Group announced its intention to purchase Lenovo Mobile Communication Technology. Lenovo Mobile now ranks third in terms of unit share in Chinas mobile handset market. NEC On January 27, 2011, Lenovo formed a PC joint venture with Japanese PC maker NEC. As part of the deal, the companies said in a statement they will establish a new company called Lenovo NEC Holdings B.V., which will be registered in the Netherlands. NEC will receive US$175 million from Lenovo through the issuance of Lenovo's shares. Lenovo, through a unit, will own a 51% stake in the joint venture, while NEC will hold a 49% stake. Lenovo has a five-year option to expand its stake in the joint venture.[29]

This joint venture with NEC is intended to boost Lenovo's worldwide sales by expanding its presence in Japan, a key market for personal computers. NEC is spinning off its personal computer business to the joint venture. As of 2010, NEC controlled about 20% of Japan's market for personal computers while Lenovo had a 5% share. Lenovo and NEC have also agreed to explore cooperating in other area such as servers and tablet computers.
Medion Lenovo announced in June of 2011 that it planned to take control of Medion, a German electronicsmaker. Lenovo said the acquisition would double its share of the German computer market, making it the third-largest company by sales after Acer and Hewlett-Packard. The deal, expected to close in the third quarter of the same year, would be the first time a Chinese company has bought a well-known German company. This acquisition will give Lenovo 14 percent of the German computer market. Gerd Brachmann, chairman of Medion, agreed to sell two-thirds of his 60 percent stake in the company. He

will be paid in cash for 80 percent of the shares he and receive 20 percent in Lenovo stock. That would give him about 1 percent of Lenovo.

Liu Chuanzhi Liu Chuanzhi is the founder of Lenovo and remains the paramount leader of the firm. Liu founded Lenovo (whose English name was originally Legend, in Chinese Lianxiang), in 1984 with a group of ten other engineers in Beijing with 200,000 yuan. The listed holding company was incorporated in 1988 in Hong Kong. Yang Yuanqing Yang Yuanqing is the current chief executive officer of Lenovo. Yang was a chairman of Lenovo's board from 2004 to 2008. Before the acquisition of IBM's PC division by Lenovo in 2004, he was the President and CEO of the company. One of his major achievements was making Lenovo the best-selling PC brand in China since 1997. In 2001, Business Week named him as one of the rising stars in Asia. In February 2009 the CEO Bill Amelio was replaced by Yang.

Olympic sponsorship To that end, Lenovo signed on as the official computer sponsor of the 2006 Winter Olympics in Turin, Italy, and the 2008 Summer Olympics in Beijing.

Brand awareness

When asked about Lenovo's brand Yang Yuanqing said, "Outside of China we still have a long way to go, and that's why we've paid a lot of attention to brand building, particularly in emerging markets. It's easier to do it in those countries compared with mature markets. The Beijing Olympics were very good for brand awareness in countries like the US and Argentina, but not good enough. If I was the chief executive then I would have spent more money to build the brand outside China to leverage off the Olympics."

Early history
Founding and early years

On November 1, 1984, Lenovo was established with 200,000 RMB by eleven people, named the "Chinese Academy of the Sciences Institute of Computing Technology," new technology development company. In 1985, the company launched the first Chinese-made motherboard with Lenovo technology. The current brand name, Lenovo, was born from this. On 23 June 1988, Lenovo was incoporated in Hong Kong. New technology development company and Chinese technology transfer company co-founded Lenovo of Hong Kong. Lenovo Group used Legend as its English name. The "Lenovo" name was used for the first time. When Legend launched its own branded personal computer in 1990, it already had a strong distribution network in place. With that distribution network and prices 30% below those of foreign companies such as Hewlett Packard, Legend grabbed the lead in China's computer market late 1996 and has held it ever since. Legend has been able to accomplish this buy underpricing foreign competitors while providing quality and support unavailable from local competitors.