Where does Lenovo go?

On August 12th, the logic of Lenovo's success has precisely become a burden to its transformation at the moment. After experiencing the "lost five years," Lenovo must personally destroy the "PC model" that it once took pride in. In the last few months before entering the thirtieth, Lenovo Group's "king of the world's PC" signals both the coronation ceremony and the crisis.

Just in the past July, market research companies IDC and Gartner also announced that Lenovo has become the world's largest PC company in terms of shipments. After years of close competition with Hewlett-Packard and Dell, this is undoubtedly the most important victory for Lenovo since the establishment of the company - the last change in global PC seating was still six years ago.

While seizing the crown of laurel, this high-tech company founded by Liu Chuanzhi, the “Chinese company godfather”, is seen as a template for corporate strategic management textbooks. It is shrouded in the shadow of industrial change. Its former allies and rivals have fled, and new ones. Competitors appear frequently and without warning. This terrible uncertainty has never existed in the history of Lenovo.

Mobile Internet is launching strong challenges to traditional forces, and the important carrier of Lenovo's transformation is still struggling in the mud of losses. More importantly, the biggest burden of transformation on Lenovo's transformation is precisely the model that the company has succeeded in over the past 29 years—the demand for shipments and its cost strategy. This kind of path dependence makes the bloated association run on a given road inertially, making it extremely difficult to turn. In the history of science and technology development, Kodak, Motorola, and Nokia have suffered fruitful results.

Subversive changes in the PC industry are ongoing. Changes in consumer demand make the mobile Internet and traditional forces form a fierce confrontation pattern. The substitution of this shift is far greater than the complementation. In 2008, Lenovo missed an important multiple-choice question: Transforming to mobile devices or sticking to traditional PCs - Lenovo sold its mobile phone business when smart phone offensives have become apparent. Today, Yang Yuanqing, president and CEO of Lenovo Group, must pay several times the price for making decisions five years ago.

Five years ago, a "Why is Lenovo" swept the corporate management community. Today, Lenovo needs to consider how to reduce barriers to entry in the PC industry. Like Kodak's weakening of film business in the same year, letting Lenovo weaken the "PC standard" it is proud of is very cruel, but the space for Lenovo's choice is already very tight. .

One unsent message

On the night of July 11, the market research company IDC and Gartner released the global PC industry data for the first quarter of 2013 on the same day. Lenovo beat HP by 16.7% of the global market share and took down the title of “king of global PC”.

In another five months, the most successful commercial enterprise in China's IT industry will usher in its 30th birthday, which means that a small company born in a small cottage in Zhongguancun 29 years ago is ushering in the most glorious history. Time - At the same time as the adult ceremony and the coronation ceremony, it is worth celebrating.

"China's economy and information" reporter picked up the phone, that night to an old friend of Lenovo Group's channel sales system sent a text message: "Congratulations Lenovo deservedly took the global PC throne, 30 years finally tasted the wish."

After 5 minutes, I received a reply: "Don't say congratulations, I don't think I'm congratulated. The group has won the No. 1 global PC. It is really at the top of the parabola. But it's not sweet to say anything. It's neither sweet nor sweet. It is neither happy nor lost. It has never been this kind of taste."

This is a surprising reply. The reporter unconsciously knocked out three words on the screen: “Why” but did not issue? In the area where IBM had long abandoned it as early as 8 years ago, which was famous for its strategic vision, the number of shipments dropped sharply for 5 consecutive quarters. It's not really exciting to win the championship in the field.

as expected. On July 16th, Lenovo held a general meeting in Hong Kong, China. In the media Q&A session after the meeting, Yang Yuanqing did not mention the “Coronation Global PC Champion”. In the following week, Lenovo did not take the initiative to publicize the most important victory in the 29 years since its establishment. In addition to the symbolic news reports, the media also lost its collective voice.

All this is extremely rare in the history of Lenovo. As early as around 2000, the saying “the post-PC era is coming” has been buzzing, but it has not caused alarm. Until early 2005, IBM sold its PCD (Personal Computer Business Unit) business.

Allies and enemies

Although the turning point of the continuous decline in global PC shipments occurred in 2012, 2008 is a more subtle and more fundamental turning point.

In June 2008, the reporter went on a business trip to Germany and sat on the flight with Xiao Zhenyi, then vice president of China's Hewlett Packard PSG Group. Xiao Zhenyi said that Todd Bradley (HP Global Senior Vice President, Hewlett-Packard PC business leader) has several times in the HP internal meeting mentioned "PC decline theory" that the PC is about to usher in the global industry Turning, the future is bound to gradually decline. "HP has already smelled the smell of industry failure."

The next day, in Berlin, Germany, Hewlett-Packard officially announced its mobile ecosystem strategy, announcing that it will focus on the "regulation of the second pulse" among mobile devices such as laptops, mobile printers, and smart phones (equipped with the Windows Mobile operating system). And released five iPAQ phones at a glance. The core of this strategy is to extend the market barriers established by Hewlett-Packard in the PC business to the smart phone business and build the core competitiveness of the mobile device segment.

Today, this still counts as one of HP’s extremely pivotal transformations – offering a “harvesting strategy” before the PC business declines, in order to move to another strategic trajectory as soon as possible. At that time, the iPhone 3G version had not yet been released. The smart phone or Nokia was in charge. Intel attempted to release a low-power Atom Atom processor for portable devices. After that, Dell and Macros were still exploring the Internet.

However, smart phones have already entered the city.

One month after Hewlett-Packard proposed the mobile ecosystem strategy, Apple released the 3G version of the iPhone. This product, which maximizes the software system and user experience, has become popular all over the world. In the last quarter of the year, global PC shipments fell for the first time in six years. Note that not the growth rate but the shipment.

This is an important historical background. Whether it is Lenovo's rivals Hewlett-Packard, Dell, Macro, or allies Intel, Microsoft, have felt the PC industry cool to hit, smart devices will be like foreign tribesmen, the layout of the Dynasty will be trampled through.

Similarly, 2008 is the best transition period for Lenovo. However, in 2008, Lenovo made an astounding announcement that it would cut off its mobile business.

In the financial report released in January of that year, Lenovo disclosed the fact that mobile phone shipments fell 31% year-on-year, and stated that "the personal computer business and existing mobile phone business are two completely different businesses, and the space for achieving synergy is relatively limited." Lenovo will "focus resources further on the personal computer business."

In order not to drag down on the listed company's report, the action of this lost pawn car seemed to be an intrigue at the time, but many experts believe that in the transition of the PC industry chain to mobile devices, Lenovo sold the most valuable in the future. Transformation carrier. Some industry experts commented: "This is simply Lenovo's most stupid decision in recent years. No one. Lenovo also severed the hematopoietic system while cutting away the disease."

Even though HP has not made any achievements in the mobile business, the CEO has exchanged it and replaced it with WebOS, the most recent product from the Internet. But this is an off-topic statement - a non-committal board is spread out. .

Dell has already started the "reaping strategy." At the end of 2007 earlier than the Hewlett-Packard transition, Dell announced that it had acquired EqualLogic, a memory manufacturer, for $1.4 billion, and took the first step in the transformation of IT services. In the following three years, Dell successively acquired Perot, an IT service provider, Quest Software, a software company, and Beauboss, an IT consulting firm, to step up the transformation of the layout. Dell's PC business revenue accounted for 83% 10 years ago, and now the software business has been equally divided.

At the end of 2009, the trend of intelligent terminals replacing PCs was clearly visible. Lenovo had no choice but to repurchase Lenovo Mobile. Then, in 2012, half tired and half reluctantly released the PC+ strategy.

In 2012, one era is at an end, while another era is in full swing. Lenovo's former enemy Hewlett-Packard, Dell and allies Intel, Microsoft have inevitably been squeezed into the decline channel. Apple ran away and Samsung followed. A few months later, IDC announced that global PC shipments fell again after experiencing a brief recovery.

Unlike 4 years ago, this decline is likely to mean that the PC industry has begun a long, endless night.

"Shipment" strategy has come to an end

In the maze-like Dinghao Electronics Mall, there are about a dozen stores marked with Lenovo Logo on the first three floors. The popular computer market is a position that Lenovo Group’s PC business must firmly hold. Its strategy is to allow most Chinese consumers to find a Lenovo store within 50 kilometers. High-density storefronts can guarantee Lenovo's shipments. It is also China's sustained growth is an important reason.

In the vast Chinese towns and villages, Lenovo has more than 30,000 agency stores, which is five times that of 2010. Lenovo Group has also extended this retail strategy to other emerging markets, and this approach has also paid off. In the past 16 quarters, Lenovo Group has grown faster than the entire industry, the scale than the acquisition of IBM It has tripled, and has literally become the world's largest supplier of personal computers.

Beginning with Hanka, Lenovo emerged in the PC era with a strong PC temperament. The company has been repeating three things over the past 29 years: shipments, shipments, and shipments. In Liu’s time and Yang’s time, Lenovo’s management team is extremely good at maximizing the scale – as long as the shipment is large enough, it will be able to gain more bargaining power with Intel and Microsoft to reduce costs and gain profits, and at Wintel The era of dominating the world dominates the high ground. In this model, Lenovo's limited internal resource allocation is based on shipments. Salespeople can always figure out ways to transfer the doubled sales pressure to channel providers.

This is a typical PC company's format, HP, Dell, and Macro are all the same. Moreover, the PC system has become very successful in the fast growing Chinese market with a large consumer base.

Michael Porter once famously reminded him of the recessionary industry: “Ignoring efforts to reduce the volume of sales and trying to maintain the current position is likely to lead to a painful battle.” In 2011, Yang Yuanqing’s hands There are not many cards, and the transition to smart phones and other mobile terminals is imminent. Lenovo has also launched a "Le Yun" service behind Apple. In January of the same year, MIDH (Mobile Internet and Digital Home Business Group) was established. The strategic position is as important as the PC business group. Liu Jun, who is appointed as a consumer PC business and is known for his execution skills, is the most prominent. Liu Chuanzhi and Yang Yuanqing hope to cash in exchange for the lost four years. Liu Chuanzhi still remembered Liu Jun at the chairmanship ceremony: "Lenovo Group has so much cash, not afraid that you are not enough."

After Liu Jun took office, he faithfully continued the Lenovo's superior model: to the channel (different from the PC, telecom operators are an important channel for mobile phone sales) to press the goods, substantially increase the shipments in exchange for the capital negotiated with the upstream manufacturers, trying to In the PC+ field with the core of the mobile Internet, PC systems are duplicated. Feng Xing, vice president of Lenovo Group, said in an interview on July 30 this year that in Lenovo's mobile phone sales, operator channels accounted for about 70%.

The problem is exactly here. As a typical emerging industry, the ecological environment and industrial characteristics of the mobile Internet are completely different from those of the PC. The industry's requirements for technological innovation, user experience, software, and ecosystem are far higher than costs. The association that wakes up overnight finds that Hewlett-Packard and Dell, who were friends and friends for 29 years, suddenly became strangers, and the side of the couch was surrounded by Lei Jun who had worked in office and anti-virus software, and even Luo Yonghao who had a serious business suit. . They do not get the ability of the operator, but they always have the ability to build a viral culture that spreads in the short term, using a product with a strange name to quickly punch and defeat dull rivals.

This is almost 29 years old. For the first time, Lenovo did not know where it was, where its competitors came from, and why it died. Huge insecurity surrounds the just-crowned "king of the world's PCs" like ghosts. It has become completely unaware of who will be competing against Taiwan tomorrow, not to mention where they can squeeze out some profits.

However, the reintroduction of the PC system is not entirely ineffective. IDC data shows that in the second quarter of 2013, Lenovo’s handset shipments were 11.3 million, making it the only company in the world’s top five smart phones that has not made a profit on mobile phones. In global history, in the emerging industries, the precedent of shipments exceeding 10 million in shipments but deep in losses is extremely rare.

Charles Handy, a management thought master, said that if you over-believe in and believe in the logic that leads to your success, then the logic of success will surely lead you to failure or mediocrity. Therefore, the continuous pursuit of excellence through a path is often a curve that seeks mediocrity.

From Beijing to Shenzhen
At the end of 2004, Lenovo transferred its headquarters from Beijing to New York, 11,000 kilometers away. The great migration allowed Lenovo to become a multinational corporation from a computer manufacturer in Zhongguancun, and Lenovo successfully entered the European and American markets.

Nine years later, from the distance between PC headquarters in Beijing and Shenzhen, the capital of mobile phones in the world, only 2,400 kilometers away, Lenovo has been unable to complete its strategic shift.

On April 19, 2010, at the Lenovo Group Mobile Internet Strategy and New Product Launch Conference, Liu Chuanzhi talked about a Greek myth: Children fight with giants, and the strength of the two people is very different. But the child has an advantage. The earth is his mother. Every time he kisses the earth, the child becomes stronger. In the end, the child relies on the mother of the earth to defeat the giant.

Liu Chuanzhi means that Apple is a giant, Lenovo Group is a child. “Our customers, our partners, and our government leaders are our mothers in the earth. The failure to sell Apple's iPhone with Music Phone is a failure.” In a short speech of several minutes, Liu Chuanzhi challenged the iPhone on behalf of Lenovo Group. At the same time, representatives of the channel representatives under the table will give enthusiastic applause.

Two years is enough to create a new business world. After losing the best transition period, Liu Chuanzhi's rhetoric can't change sales performance. By the end of the year, the company that had always emphasized executive power had only sold 500,000 music phones, which was half of the booking target.

The majority of Le Phone's parts come from Shenzhen. The city boasts an amazingly complete component market and a large number of large buyers.

In May 2012, Lenovo moved all of MIDH's departments to Wangjing, which is closer to Beijing's Shanghai headquarters than the global mobile phone manufacturing center Shenzhen. Strategically, the independent development strategy of Lenovo's mobile phones is also indecisive: always think that mobile phone business should be separated from the barriers of the old independent road, but can not give up the advantages established in the PC market more than 20 years. This led to the fact that the two business units that were supposed to complement each other became a drag on each other.

An Hui, director of the Electronic Information Research Institute of the Thinkpad think-tank, said that Lenovo has not changed from beginning to end. What Lenovo does at present is only the change of product manufacturing content. There has been no change in the company's strategy and development model, and there has been no targeted and substantive response to the development trend of the mobile Internet.

Ask again five years later

On April 12, 2012, at Lenovo's internal event known as the swearing-down meeting, the industry's expected transformation strategy of Lenovo - PC+ has come late. At the scene, Yang Yuanqing said that "PC will not be replaced." After that, the frontier turned around and admitted that "the trend of expanding from traditional PCs to TVs and mobile phones has become irreversible."

This ambiguous view is full of Lenovo's official discourse system. They think that traditional PCs will be firm for a long time and likely to pick up. They also think that if they don't make a transition, they will go back to Kodak's mistakes—acknowledge that changes are happening, and they will not cruelly deny the past. Michael Porter vividly refers to this phenomenon in the "competitive strategy" as the "management and emotional barrier" in the recession industry. The unpleasantness it contains includes: the stigma of pride and renunciation, and the destruction of long-term existence. The business sense of identity and so on - under the leadership of the Chinese company's godfather, spent more than 20 years, numerous times and opponents short-handedly connected to get the "king of the global PC", how can we deny?

But the time left for Yang Yuanqing to hesitate is not much. In a report released on the following day when the PC+ strategy was released, a senior IT analyst reluctantly said: "This is the best strategy that Lenovo can make."

Lenovo made a correct decision but it was at least four years late. The decision to embrace the mobile Internet should be made in the initial period of Lenovo's losses in 2008, and at least should be made in 2009 after Liu Chuanzhi regained his leadership in Lenovo. Li Yi, secretary-general of the China Mobile Internet Industry Alliance, commented that even though Lenovo barely caught the tail of the transition to the mobile Internet, the subsequent strategy faltered. Liu Chuanzhi first stated that he would compete with Samsung and Apple, and in the Liu Jun era, he completely played. Thousand yuan machine strategy. “In the big ecological landscape of clouds, pipelines, and terminals, smart terminals are the only thing that Lenovo is likely to do, but Lenovo does not insist. Is it a fine line or is it tied to the carriers to take the puerile-buying route? This kind of strategic swing brings great uncertainty to the industry, partners, and supply chain,” said Li Yi.

In 2008, in an in-depth analysis of the Lenovo Group's initial strategy book, “Why does Lenovo?”, the author portrays how Liu Chuanzhi, Yang Yuanqing, and Guo Wei managed to turn the tide in their most difficult moments. Today, Lenovo once again reached the fork: left is Dell and HP's choice of IT services, Lenovo's multi-year relationship business is expected to be able to score twice; to the right is the consumer route, mergers and acquisitions more Internet companies, thorough Abandon the thinking of the PC era and complete the transition from scale-driven to innovation-driven.

After the opportunity for transformation has passed again and again and again, where does Lenovo go?