Liu Chuanzhi: Lenovo Has Encountered Its Fourth Bottleneck

摘要: As technologies and business models advance, Lenovo’s main line of business, the PC segment, is actually declining in scale. As for Lenovo’s new businesses like the smart phone segment, server segment, and Internet service segment etc., their scales are still not compatible with the social status of the company.

(Chinese Version)

On January 29th, the board chairman and founder of Lenovo Liu Chuanzhi pointed out at the Lenovo annual meeting that the scale of company’s PC business had been compressed and that the company is encountering its fourth bottleneck.

Liu also mentioned the three bottlenecks that Lenovo had conquered:

1. In 1994, Chinese PC brands crumbled under the competition when foreign brands started to enter China. Almost all brands were crashed. Lenovo acted fast and established a microcomputer department directed by Yuan Qing, which helped the company survive this first great challenge.

2. In 2003, Lenovo Group made initiatives to diversify its line of business, which later turned out to be disappointing. However, Lenovo acquired IBM PC in the next year, making a major breakthrough.

3. During 2008 to 2009, the economy crisis swept through the globe. Lenovo Group was hit as well and was losing money. But after that Lenovo rose even higher.

At present, Lenovo is encountering its fourth bottleneck. “Due to the slow development of technologies and business models related to the PC sector, the scale of the PC sector is actually declining,” Liu said. “As for Lenovo’s new businesses like the smart phone segment, server segment, and Internet service segment etc., their scales are still not compatible with the social status of the company.”

According to Liu, 70% of Lenovo’s businesses have enough growing space overseas. “We need to face our current situation and accept the fact that we are in trouble,” Liu stated. “And that will eventually lead us out of this bottleneck. We need to be positive, ambitious and flexible. Yang Qingyuan, as an exceptional leader who really knows about team building and strategies, can lead Lenovo get through this bottleneck.”

What follows is the transcript of Liu Chuanzhi’s speech, edited by TMTpost:

Up till this point, Lenovo has endured many hardships and tackled many obstacles. To put it in perspective, Lenovo had survived three major bottlenecks. In 1994, Chinese PC brands crumbled under the competition when foreign brands started to enter China. Almost all brands were crashed. Lenovo acted fast and established a microcomputer department directed by Yuan Qing, which helped the company survive this first great challenge.

In 2003, Lenovo Group made initiatives to diversify its line of business, which later turned out to be disappointing. However, Lenovo acquired IBM PC in the next year, making a major breakthrough.

And at present, Lenovo is encountering its fourth bottleneck. Due to the slow development of technologies and business models related to the PC sector, the scale of the PC sector is actually declining. As for the Lenovo’s new businesses like the smart phone segment, server segment, and mobile Internet segment etc., their scales are still not compatible with the social status of the company.

Under these circumstances, we need to face our current situation and accept the fact that we are in trouble. And that will eventually lead us out of this bottleneck. We need to be positive, ambitious and flexible. Yang Qingyuan is an exceptional leader that knows about team building and strategies. And he can lead Lenovo get through this bottleneck.

At last, I want to say that Lenovo is an enterprise with glorious history. Its glory is not only shown by its financial statements or our social status, but by our corporate culture.

A few years ago, we called ourselves the Spartacus phanlanx. Why Spartacus phanlanx? That’s because we fought hard when we encountered hardship and we never lost our ground. Lenovo is just like a seasoned Spartan warrior.

Today innovations and advancing technologies have brought forth great changes to our industry and even society in many aspects. Lenovo at its nature is a tech company. It’s born to be a forerunner at the front line of cutting-edge technologies. And therefore we encountered challenges directly. And being in this position, we have to possess the mindset to face the cruel reality and have the eyes that can foresee future trends for long term development . And we also have to be analytical and conclude our accumulating experience from our rivals.

Up till this point we have endured three bottlenecks because we thought hard and came up with solutions. We made breakthroughs and for that we are able to climb to a higher ground.

I quit the position of board chairman in 2011 and many employees in company don’t really see me here anymore. But my heart is still with you. I believe with Yuan Qing’s endurance and capability, Lenovo’s corporate culture, and the invincible teams that the company has, Lenovo will once again conquer the bottleneck rise higher and thrive from hardship.

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[The article is published and edited with authorization from the author @TMTpost, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.

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