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Lenovo replaced the unprofitable Aluminum Corp of China , a state-owned enterprise, on the list of 50 key companies on the Hong Kong stock exchange that constitute the Hang Seng Index. Being added to the Hang Seng Index was a significant boon for Lenovo and its shareholders as it widened the pool of investors willing to purchase Lenovo's stock. For instance, index funds pegged to the Hang Seng and pension funds that consider index inclusion now have the opportunity to invest in Lenovo.

Lenovo is the world's largest personal computer vendor by unit sales from to Lenovo was able to reclaim its top spot in PC market share Yang, and 0. Some people have said we are a state-owned enterprise. The purpose of the Chinese Academy of Sciences to invest in this company was that they wanted to commercialize their research results. The Chinese Academy of Sciences is a pure research entity in China, owned by the government. From this point, you could say we're different from state-owned enterprises. Secondly, after this investment, this company is run totally by the founders and management team.

The government has never been involved in our daily operation, in important decisions, strategic direction, nomination of the CEO and top executives and financial management. Everything is done by our management team. In early , the U. State Department was harshly criticized for purchasing 16, computers from Lenovo. Critics argued that Lenovo was controlled by the Chinese government and a potential vehicle for espionage against the United States. Yang spoke out forcefully and publicly to defend Lenovo. He said, "We are not a government-controlled company.

Those firms had the full backing of the state while Lenovo received no special treatment. Yang worried that fears about Lenovo's supposed connections to the Chinese government would be an ongoing issue in the United States. Yang worked to ease worries by communicating directly with Congress. Yang dramatically increased his ownership stake by acquiring million shares in As of June , Yang owned an 8 percent stake in Lenovo.

He previously owned only 70 million shares. In a statement, Yang said, "While the transaction is a personal financial matter, I want to be very clear that my decision to make this investment is based on my strong belief in the company's very bright future.

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My decision to increase my holdings represents my steadfast belief in these principles. Lenovo's corporate culture differs from other Chinese companies. While Lenovo was founded using seed capital from the state-owned Chinese Academy of Sciences , Lenovo is run as a private enterprise with little or no interference by the state. Lenovo's senior executives, including many non-Chinese, rotate between two head offices, one in Beijing and the other in Morrisville, North Carolina, and Lenovo's research and development center in Japan. Two foreigners have previously served as Lenovo's CEO.

English is Lenovo's official language. Lenovo's CEO, Yang Yuanqing, initially did not understand English well, but relocated his family to Morrisville to improve his language skills and learn American ways. One American Lenovo executive interviewed by The Economist praised Yang for his efforts to make Lenovo a friendly place for foreigners to work. He said that Yang had created a "performance culture" in place of the traditional Chinese work style of "waiting to see what the emperor wants".

Yang Yuanqing is the chairman and chief executive officer of Lenovo. One of his major achievements was leading Lenovo to become the best-selling personal computer brand in China since In , Business Week named him one of Asia's rising stars in business.

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Ward, Jr. Ward was succeeded by Bill Amelio on 20 December Yang was chairman of Lenovo's board from to , and returned as chairman in alongside his role as CEO. According to Lenovo spokesman, Jeffrey Shafer, Yang felt that it would be the right thing to, "redirect [the money] to the employees as a real tangible gesture for what they done. This was almost equivalent to a monthly salary of an average worker in China. Liu Chuanzhi is the founder and chairman of Lenovo.

Liu was trained as an engineer at a military college and later went on to work at the Chinese Academy of Sciences. Like many young people during the Cultural Revolution, Liu was denounced and sent to the countryside where he worked as a laborer on a rice farm. Liu claims Hewlett-Packard as a key source of inspiration. In an interview with The Economist he stated that "Our earliest and best teacher was Hewlett-Packard. I was wearing an old business suit of my father's and I sat in the back row. It was unthinkable. In early , Lenovo announced the addition of Yahoo founder Jerry Yang to its board.

Lenovo's CEO Yang Yuanqing said, "Jerry's appointment as an observer to our board furthers Lenovo's reputation as a transparent international company. Speaking of both men Yang Yuanqing said, "We believe that they will add a great deal to our strategic thinking, long-term direction and, ultimately, our ability to achieve our aspirations in the PC plus era.

In , Lenovo became the first personal computer manufacturer to divide countries into emerging markets and mature markets. Lenovo then developed a different set of strategies for each category.

Lenovo's competitors have widely adopted the same approach [15]. In , Lenovo made a major effort to expand its market share in developing economies such as Brazil and India through acquisitions and increased budgets for marketing and advertising. In China, Lenovo has a vast distribution network designed to make sure that there is at least one shop selling Lenovo computers within 50 kilometers of nearly all consumers. Lenovo has also developed close relationships with its Chinese distributors, who are granted exclusive territories and only carry Lenovo products.

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As of July , Lenovo believes that urbanization initiatives being pushed by Premier Li Keqiang will allow it to sustain sales growth in China for the foreseeable future. Speaking at Lenovo's annual general meeting in Hong Kong in , Yang Yuanqing said: "I believe urbanisation will help us further increase the overall [domestic] PC market. Lenovo previously benefited from the Chinese government's rural subsidies, part of a wider economic stimulus initiative, designed to increase purchases of appliances and electronics.

That program, which Lenovo joined in , ended in Lenovo enjoys consistent price premiums over its traditional competitors in rural markets and a stronger local sales and service presence. Lenovo has gained significant market share in India through bulk orders to large companies and government agencies. For example, the government of Tamil Nadu ordered a million laptops from Lenovo in and single-handedly made the firm a market leader.

Lenovo distributes most of the personal computers it sells in India through five national distributors such as Ingram Micro and Redington.

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Given that most smartphones and tablets are sold to individuals Lenovo is pursuing a different strategy making use of many small state-centric distributors. Amar Babu, Lenovo's managing director for India, said, "To reach out to small towns and the hinterland, we have tied up with 40 regional distributors.

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We want our distributors to be exclusive to us. We will, in turn, ensure they have exclusive rights to distribute Lenovo products in their catchment area. In February , Lenovo established a relationship with Reliance Communications to sell smartphones. Babu claims that the relative under penetration of smartphones in India represents an opportunity for Lenovo.

Lenovo has assembled a team of senior managers familiar with the Indian market, launched mobile phones at all price points there, and worked on branding to build market share. Lenovo did marketing tests of its smartphones in November in Gujarat and some southern cities, where Lenovo already had a strong presence. Lenovo's strategy has been to create awareness, maintain a broad selection of phones at all price points, and develop distribution networks.

Lenovo partnered with two national distributors and over local distributors. As of February , more than 7, retail outlets in India sold Lenovo smartphones. Lenovo has also partnered with HCL in order to set up service centres in cities. In India, Lenovo grants distributors exclusive territories but allows them to sell computers from other companies. Lenovo uses its close relationships with distributors to gain market intelligence and speed up product development. Canalys, a market research firm, said Lenovo took market share away from Apple and Samsung in the country.

Lenovo first started doing business in South Africa , establishing a sales office, and then expanded to East African markets such as Kenya, Tanzania, Ethiopia, Uganda, and Rwanda.