Global brand building

During his first trip to Dubai as Lenovo CEO and president, ITP spoke to William Amelio about the Middle East market, the integration of IBM’s PC division and, of course, Gitex.

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By  Peter Branton Published  November 26, 2006

|~|89Q&Abody.jpg|~|Amelio said Lenovo was focused on success in the Middle East and Gitex was an important platform for this.|~|With the purchase of IBM’s loss-making PC division (PCD) for US$1.75 billion in 2004 Lenovo went from ‘Leno-who’ to the third-largest PC maker in the world overnight. But the Chinese vendor has had a tough time establishing its brand outside of its home country, especially in the US and Western Europe were the general slowdown in PC sales had made life even more difficult. For its 2007 fiscal first quarter ending June 30, Lenovo’s volume growth beat the market average and its main competitors, but the majority of this growth came from China — accounting for 39% of the company’s total revenue. The vendor’s second quarter results painted a similar picture. With shipment numbers dropping and margins being squeezed in the US and Western Europe, Lenovo and other vendors are looking to emerging markets like the Middle East to increase their sales and profit. A mark of the region’s growing significance to Lenovo was the presence of its global CEO and president William Amelio at Lenovo’s CIO summit in Dubai, which took place during the Middle East’s largest IT trade show, Gitex. ITP caught up with Amelio during his first visit to Dubai as Lenovo CEO to find out what he has planned for the region. How important is the Middle East market to Lenovo? As a fast-growing emerging market, the Middle East presents itself as a wonderful opportunity to Lenovo. The region is seeing a change in approach from both businesses and individuals towards technology adoption, and this is a major driver behind the increase in PC penetration. The focus on technology in education, the impact of international regulation and WTO requirements are all factors affecting the PC adoption rate in the region and creating a high demand for reliability, functionality and innovation. Lenovo has the unique capability to cater to these demands, and we’re very focused on expanding our Middle East business success. How important is Gitex as an opportunity for Lenovo to get its message across? We’ve invested in this show for a second year. Gitex remains an important vehicle for Lenovo to strengthen the presence of its brand in the regional market. What are the key messages that Lenovo wants to communicate at this year’s show? Our most important message is this: Lenovo is a new world company. Created by the merging of the IBM PCD and Lenovo, the new Lenovo has decades of experience in the PC industry. Lenovo combines the strong legacy of IBM innovation for business with Lenovo consumer-oriented innovation to create new offerings that meet the needs for customers. How would you rate Lenovo’s progress in the region since the company launched officially post-IBM acquisition? The team in the region has grown to 25 people between the UAE, Egypt and Saudi Arabia. New channel programmes have been put in place, and the partner network expanded. In terms of product availability, new releases hit the Middle East market at the same time as they hit other global markets. So we’re in pretty good shape. The integration of the former IBM PCD into the Lenovo structure has been an extremely smooth process, and took place in no time at all by global standards. The entire Lenovo management teams both at the executive level, and the country level across regions, are now fully in sync with the ‘new world company’ concept. And each country is run locally, with decision-making influence on their markets. How easy has it been to integrate the IBM culture with the Lenovo culture? While our Chinese roots are a strong part of our heritage, we are truly a global company now, with roots just as strong from all parts of the globe. The commonalities between the former IBM PCD and the original Lenovo are stronger than the differences in upbringing and culture. The common goals and challenges of the two entities — based on competing in the PC industry — serves as the bridge between cultures. The native languages might be different, but the language of technology and winning in the marketplace is the same. Like any global company, Lenovo is a mix of cultures from all over the world — Americas, Europe, and pan-Asian as well as Chinese, so our challenges in running a global company are not unlike other multinationals. The PCD acquisition was groundbreaking; however, at the end of the day, we are now more like other multinationals in our mix of many cultures. Lenovo with its complete portfolio serves both the large enter-prise and the SMB [small and medium-sized business] markets. As an international company, Lenovo combines the strengths of multiple cultures. It has its roots in, and embraces the optimistic growth of, emerging markets which span diverse cultures and backgrounds. Which is why we’re following a decentralised model, giving the local people the power to run the business the way they see fit for their markets. We said three things when we launched the integration: trust, respect, and compromise. We made that a theme inside the company — we would trust each other to work toward common goals, respect different opinions and practices, and work as teams to compromise whenever necessary. That’s working. Lenovo is an exciting company, with huge potential. I personally am investing a lot of energy into it, because I believe in its capabilities to really stand out in the industry. Even though it’s quite a large organisation, Lenovo is only just over a year old and we are still taking a sort of entrepreneurial approach to growing the business. But with the amount of skill and expertise we have within the company, we’re off to a rocking start. How is Lenovo broadening its appeal to the consumer segment in the Middle East? The Lenovo 3000 products are designed for small business customers who want a reliable, easy-to-use PC featuring modern design silhouettes. But we are also seeing a trend in the consumer segment moving towards more high-end, high-performance products, which is opening up an opportunity for the ThinkPad notebooks to have a greater appeal to consumers. But we are mainly based on the enterprise market place. Have you visited the Middle East before as Lenovo CEO? No, this is my first visit to the region, and I’m thrilled to be here. There’s always talk about the growth potential of the BRIC [Brazil, Russia, India and China] countries — how strategic are emerging markets to Lenovo? Emerging markets have a much higher growth rate than mature markets. Over 50% of Lenovo’s growth is expected to come from these markets. The model Lenovo adopted in China is proving successful and transferable. Is it true you are a black belt in karate? If so, how does this help you in your job? Yes, it is true. Karate is not only a great way to stay fit, but also, effective practice of karate enhances discipline and focus, both of which are extremely useful in global business. What are you looking forward to most at this year’s Gitex? Being my first visit, there’s so much I’d like to see both at the show and outside in the city. But it’s a very short trip, unfortunately. I know that Gitex has grown in size significantly over the years, and this is an admirable achievement. On a personal note, it’s a pleasure to meet the Lenovo team out here, and get to see all the successes they’ve achieved. ||**||

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