A Profile of Lenovo
Introduction
The TNC Company that I choose for is a Chinese technology company which is called Lenovo, what is famous for this company is the IBM is a subsidiary of Lenovo, since this company is very famous in China, and I come from China which means I could know this company more than others, I finally decide to take Lenovo as my TNC company.
History
The Lenovo was established in 1984, “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.” (Lenovo, Web, 02, Oct, 2012). It was established in Beijing, in a small apartment room, Liu—then chairman of Lenovo with his 10 colleagues started their Legend Group, and also started a legend in China.
Discussion of Current Activities
Lenovo originally sold computers in 1980s, even Lenovo company keeps expanding and expanding, but they still sell computers and some other technology productions such as mobile phone, etc. right now, actually in conclusion, Lenovo right now sells all productions which have connection with internet. The company’s current set of activities completely relate to its origin which is all about internet, in the past 20 years, Lenovo company changes their scale, their team, but they never change their main productions, I guess that is why Lenovo can step to today and become the world’s second-largest PC vendor, and a US$21 billion personal technology company.
Pattern of Growth
Lenovo’s technology team itself is the backward integration of Lenovo, because when Lenovo established, China did not have any experience about internet and computers, Lenovo has its own team to support it to develop, but also those raw materials factories are the backward integration of Lenovo; then if we look ahead, Lenovo produces computers and other products by itself and sells them all to consumers, which is to say, the forward integration of Lenovo is consumers which is us, to be specific, Lenovo sells its products to those technology stores, or the company just sells its products in its own flagship stores which are owned by Lenovo itself. In conclusion, Lenovo Company gets raw materials from backward integration suppliers, using its own technologies to produce its own productions, then Lenovo sells those productions to the forward integration which is those technology stores or its own flagship stores, then those stores sell the productions to consumers.
Lenovo Company is lateral expansion, in 1984, it established, and in the next 20 years, Lenovo acquired technologies from Microsoft, Acquisitioned the IBM Company, and many middle and small size PC companies in China, it is unrelated investment, since Lenovo was established by Liu and his colleagues, they invested the money into Lenovo. Last but not least, Lenovo combines both acquisition and organic expansion, Lenovo has developed for more than 20 years, as known to all Chinese and even all over the world, Lenovo has more and more costumers, its scales become bigger and bigger, Lenovo has “more than 26,000 employees in more than 60 countries serving customers in more than 160 countries. A global Fortune 500 company, it has headquarters in Beijing, China and Morrisville, North Carolina, U.S.; major research centers in Yokohama, Japan; Beijing, Shanghai and Shenzhen, China; and Morrisville; and Lenovo also has manufacturing around the world from Greensboro, North Carolina and Monterrey, Mexico to India, China and Brazil.” (Lenovo, Web, 02, Oct, 2012), those evidences all show us that it expanded organically, however, Lenovo also expanded acquisition, the most famous and obvious acquisition is Lenovo acquisitioned the IBM in 2005 which also made the Lenovo scaled to a new height.
Geographic Home Region
Lenovo again established in 1984, in Lenovo’s 28 years history, there are some very important histories that I want to talk about, and the history timeline just show us how Lenovo developed then became a top PC company in the world. In 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.”(Lenovo, Web, 3, Oct, 2012), later in 1996, “Legend becomes the market share leader in China for the first time. And Legend introduces the first Legend brand laptop.”(Lenovo, Web, 3, Oct, 2012); and in the next 10 years till 2005, Lenovo kept developing in China, and owned a mass of PC market in China’s economy, Lenovo kept its step with those best technology companies in the world, also in 2003, they decided to change the company name to Lenovo and prepared for its expansion into the foreign countries market, then in 2005, a big event came for Lenovo, it successfully acquisitioned of IBM, “making it a new international IT competitor and the third-largest personal computer company in the world”(Lenovo, Web, 3, Oct, 2012). Last, from 2006 to now, Lenovo has not slowed down its step, however, it accelerated its developing speed, invented all different kinds of new computer productions. All of its own history could tell us that Lenovo’s home or core region is China, it established in China by a group of Chinese, developed in China, and became stronger and stronger in China as well; there are five major research centers all over the world, however, three of them are in China, the major market of Lenovo is still in China, and the company’s headquarters are located in Beijing, China and Morrisville, North Carolina, U.S.
Spatial Pattern in relationship with high technology
Except the core region of Lenovo which is China, there are another two major market that Lenovo focus on, one is Europe, and another one is North America, it is very easy to see that in these two areas, there are a number of developed countries, which could actually give Lenovo a very good market quality, also, high technologies are always located in these two region, Lenovo actually build a good strategy of expansion of its overseas market, Lenovo is a technology company, which narrows its consumers, because not everyone in the world would necessary need a high technology product for their daily life, however, the more the country developed, the more necessary the country needed those technology products, therefore, Lenovo puts its major market in those developed areas would help its own developing.
Global Pattern of Corporate Activities
For the Lenovo Company, if we compare its activities that take place in the core area to the activities that take place in other major markets, it is easily to see that those activities take place in China own the biggest percentage of its all activities, which means Lenovo still put its main part of developing strategy in China; if we look through the website of Lenovo, in China’s homepage, there are many different kinds of products that are display which include cellphones, TV, laptop, etc.; however, in America’s homepage, there are not cellphones and TVs to sell, such a strategy could be read as a coordination of production chain, the headquarters decide how to distribute those different products in different regions in order to meet the needs of various markets that located in different areas. Lenovo’s transactions along the production chain could actually be described as both internalized and externalized transaction, because Lenovo has its own different divisions in the company, Lenovo will need to buy lots of tiny components for its computers, but those components are just bought internally the Lenovo Company itself; however, if Lenovo needs to get the Windows 7 software for Microsoft, then such a transaction happens externally and is market-based. Therefore, Lenovo’s transactions could be defined both externalized and internalized.
Labor Division
As a TNC company, Lenovo is absolutely display a spatial division of labor, there are seven different manufacturing centers all over the world for Lenovo, but there is only one in Greensboro, USA which USA is a developed country, other six all located in developing country including China, India and Mexico, as we all know, labors are much more cheap in developing country than developed country, then Lenovo choose to build its manufactories in developing countries could lower the cost of hiring labors, but if we look at its sales headquarters, three out of four are located in developed country—USA, France, Singapore, and one is located in China, as a technology company, Lenovo’s main markets are in developed countries except its core area—China, it not only can increase the quantities of consuming but also can help Lenovo developing. All in all, Lenovo displays a international division of labor over the world.
Aspects of Corporate Citizenship
Since more and more people realize that environment plays a very important role in the world, companies which used to be named as “significant contributors to environmental degradation and social problems” (Assignment requirement, PDF, 3, Oct 2012) now pay more and more attention to environment protection and sustainability, and of course Lenovo also put a lot of attentions to environment and social problems, for its sustainability, “Lenovo is rated as ‘Prime’ by oekom research AG, an independent research institute specializing in corporate responsibility assessments.” (Social responsibility of Lenovo, Web, 3, Oct, 2012); “Lenovo has been selected as a constituent stock of the 2012 of the Hang Seng Corporate Sustainability Index (HSCSI).” (Social responsibility of Lenovo, Web, 3, Oct, 2012); and “Lenovo is a signatory and member of the UN Global Compact and fully embraces its policies and principles.” (Social responsibility of Lenovo, Web, 3, Oct, 2012) all those facts indicate that Lenovo is trying its best to being a “good citizen”. Also Lenovo tries to protect the environment as much as possible, “Lenovo is committed to environmental leadership in all of our business activities from operations to product design and recycling solutions. Lenovo’s corporate policy on environmental affairs is supported by the company’s global environmental management system, which is key to our efforts to achieve results consistent with environmental leadership and ensures the company is vigilant in protecting the environment across all of our operations worldwide.” (Social responsibility of Lenovo, Web, 3, Oct, 2012) All in all, Lenovo not only tries to develop itself, expand itself, but also focus a lot on social responsibility, it do its best to protect environment, and develop sustainably. Lenovo is absolutely a “good citizen” in the world.
Conclusion
Lenovo maybe is not a very famous company in the U.S, but without a doubt, it is a legend company in China, it was established in a small room with only about 10 people in 1984, but today, “Lenovo is a US$21 billion personal technology company and the world’s second-largest PC vendor. It has more than 26,000 employees in more than 60 countries serving customers in more than 160 countries and it is a global Fortune 500 company” (About Lenovo, Web, 4, Oct, 2012). Such a legend TNC company not only gives us a surprise, but it also helps the Chinese economy to grow up faster, influences the Chinese society. How could a company be successful in such a short 28 years? 4P’s in Lenovo’s culture gives us the answer—we PLAN before we pledge; we PERFORM as we promise; we PRIORITIZE the company first; we PRACTICE improving every day. Last but not least, I want to use the slogan of Lenovo to end—Lenovo. New world, New Thinking.
References: