Lenovo: Building A Global Brand In 1984, the same year that Compaq introduced a PC that included Intel’s new and more powerful 80386 class of microprocessors, beating IBM to market and Michael Dell began building IBM compatible computers in his college dormitory, Lenovo was form as a shop in a small concrete bungalow in Beijing with a mandate to commercialize the Academy’s research and use the proceeds to further computer science research. Lenovo first original product was the Legend Chinese-character card in 1987, which translated English-language operating systems into Chinese. This also included a popular “association” feature that allowed users to form common Chinese phrases by typing in just a few Chinese characters. The Legend card was a piece of hardware that attached to PC motherboards, thereby saving valuable hard drive space. By that time Lenovo was run by the name “New Technology Developer” (NTD). By the time legend card popularity gave a boost to the PC distribution business and the firm won several new contracts, including one to distribute HP PCs in China in 1989, NTD was renamed Legend Computer Company. Legend Computer Company keep up their reputation by came up with their own brand PC and become pioneered the home computer in China, then
Case | HBS Case Collection | July 2006 (Revised October 2006)
Lenovo: Building A Global Brand
by John A. Quelch and Carin-Isabel Knoop
Announced in December 2004, the $1.75 billion acquisition of IBM's PC division by Lenovo, China's largest PC maker, made headlines around the world. A relative upstart in the business, Lenovo acquired the division of IBM that invented the PC in 1981. While Lenovo was arguably the best-known brand in China, it was virtually unknown in the rest of the world. In 2004, over 90% of Lenovo's revenues came from China, but with this major deal, Lenovo aimed to become a global technology giant. As a new multinational with 20,000 employees operating in 138 countries, Lenovo needed a global marketing and branding strategy to extend its global reach. This meant determining what Lenovo stood for and designing products that supported that claim. In January 2006, 13 months after the deal was announced and eight months after it closed, Lenovo is preparing for the intense limelight that would come with its sponsorship of the February 2006 Turin Winter Olympics. There, it plans to introduce a Lenovo-branded product line designed from the bottom up for the small to medium enterprise space--a move considered very bold and risky by many observers.
Keywords: Marketing Strategy; Multinational Firms and Management; Hardware; Global Strategy; Acquisition; Brands and Branding; Manufacturing Industry; Computer Industry; China;