How Lenovo manages to straddle continents

Rising above nationalistic bias, here's how Lenovo thrives on both sides of the Pacific
18 May 2018

Lenovo, showcasing its products at a recent event in Las Vegas, USA. AFP PHOTO / MANDEL NGAN

One company which has managed to maintain its focus on (mostly) hardware production is Lenovo.

Unlike most technology companies which are, to a certain extent, defined by the country in which their headquarters base, Lenovo is one of the few that’s able to straddle both the US and Asia.

In fact, in this respect, Lenovo is perhaps closer to being a model of a future global company than one intrinsically wedded to the country of its birth.

The problem with being entrenched with a particular nationality is the way that the overall impression of a country can affect business.

The United States’ mercurial relationship with China at the moment (ZTE and Xiaomi spring to mind) has undoubtedly altered the way that the Chinese giants do (or rather don’t) business on the American continent.

Reciprocally, Apple, Cisco, and Google continue to struggle on the Chinese mainland.

When there is a major dispute between the country a company is associated with and the country into which they are attempting to sell, the company can become almost blacklisted by proxy. With an executive as unpredictable as Donald Trump, all-American companies continue to struggle overseas – especially in Asia

Before Lenovo acquired two aspects of IBM’s large businesses (PCs, then servers) the company was indubitably seen as Chinese.

However, by leaving in place the management structures of the divisions which it acquired, the company began its transformation into a Chinese/US company which could serve both countries equally.

Its position was further entrenched by the hiring of multinational managers, creating a mixed management team in terms of both location and background.

Lenovo’s Chinese roots mean that its hardware and other offerings can be a hit in Asia, whereas in the West it maintains a badge of quality, still, from its IBM aspect.

The company appears to be able to float above mere political concerns; its duality allows it to escape the nationalistic punishments which individual countries seem to want to meet out.

For enterprise hardware, Lenovo maintains its strengths, still. While companies like Apple and Amazon have to build their servers largely from parts, Lenovo can provide similar capabilities without another firm having to take on all of the design & manufacturing, parts sourcing and delivery duties.

This makes Lenovo one of the safest bets for hardware to equip large multinationals and is a key element of its recent success – the fewer steps in a finished topology’s supply chain, the better.

One of Lenovo’s key markets in the US is in major universities and the federal government. One could not envisage a “pure” Chinese company penetrating the US infrastructure to quite the same event extent as Lenovo. In this, the company is truly a global presence.