The world’s greatest brands appeared on this unique world stage, anxious to expose billions of people to their advertising messages—brands such as Coca-Cola, Disney, Hilton, Johnson & Johnson, and Lenovo. Lenovo??
For Lenovo, the Beijing Olympics were the ideal venue to re-introduce a brand name that, despite its position as the world’s fourth largest maker of PCs, is largely unrecognized outside of its home nation of China.
The Lenovo story begins in 1984, when the Chinese Academy of Sciences funded a computer technology company eventually named Legend, and later named Lenovo, that launched the first PC in China in 1990. This was nine years after IBM introduced the first PC in the United States.
By 1996, Legend was the PC market share leader in China, and by 1999, it was the leading PC vendor in the Asia-Pacific region. By 2003, Legend was ready for worldwide expansion, and the company was renamed Lenovo.
In 2004, Lenovo’s version of the Big Bang occurred. That is the year Lenovo became the first Chinese company to be selected as a computer technology equipment partner of the International Olympic Committee. Also that year, Lenovo announced it had reached an agreement with IBM to acquire its Personal Computing Division (PCD). The acquisition included the renowned IBM ThinkPad brand, and exclusive access to the IBM logo for five years.
Okay, now you know who Lenovo is.
With the acquisition of PCD, and a ground-breaking strategic alliance with IBM, Lenovo was instantly catapulted into the global PC market. The company had a unique ownership structure when the acquisition was completed in 2005—the Chinese state owned the majority of the stock (about 45 percent), public investors owned about one-third, and IBM owned about 20 percent. The company was to be managed primarily by former employees of IBM.
The deal had dual significance for IBM and for China, according to business experts at Wharton: “For Beijing-based Lenovo, the acquisition of IBM’s PC business signals the arrival of China as a global player in key industries. Lenovo gains access to the worldwide PC market and quickly becomes a computer maker with more than $12 billion in annual revenues.” (Knowledge@Wharton, January 14, 2005.)
Since the 2005 acquisition, Lenovo has continued to capitalize on the IBM name, which carries the power and significance of a world-class brand. With Lenovo’s low brand awareness outside the Asia-Pacific region, that was a necessary strategy. But with the 2008 Summer Olympics in Beijing, Lenovo saw an unparalleled opportunity to launch itself as a world-class brand, separate and apart from IBM.
“The Olympic Games are an ideal way to show the strengths of Lenovo technology, service and innovation,” says Deepak Advani, senior vice president and chief marketing officer at Lenovo. “As an already established player in China, we are looking to the world stage of the Olympic Games as an opportunity to build brand recognition throughout much of the rest of the world—including the US, where we have recently introduced our exciting new IdeaPad consumer PCs.”
At the Olympics, Lenovo aired four new television commercials, each focusing on a differentiating aspect of its ThinkPad or IdeaPad lines. The commercials were quirky and humorous, and all of them were tagged with the line, “Lenovo’s PCs Power the Olympic Games.”
Lenovo was not merely an advertiser at the Games—it was an Olympics Worldwide Partner. Lenovo provided more than 30,000 pieces of computing equipment and nearly 600 engineers and technicians to support the management of the Games.
Lenovo also had a significant physical presence at the Games. Lenovo advertising was prominent on billboards, buses, bus stations, and other out-of-home venues throughout Beijing. Lenovo built several structures on the Olympic Green, including the “Lenovo Showcase,” a 17,000-square foot facility that featured interactive technology experiences. Seven Lenovo Internet lounges in the Main Press Center and Olympic Villages in Beijing, Hong Kong and Qingdao enabled athletes, coaches, trainers and journalists to e-mail, surf the Internet, play games, maintain blogs, keep in touch with friends, family and colleagues, and watch the ongoing competitions.
While the company makes a unified effort to globally market its brand, it is also sharpening its strategic focus. In early 2008, Lenovo completed the sale of its mobile handset business so it could concentrate on its core PC business. The company reported that worldwide PC shipments grew 14.6 percent in its first fiscal quarter ending June 30, 2008. Business was strong in China and the EMEA Region (Europe, the Middle East and Africa), but flat in the Americas.
In China, Lenovo maintains about one-third share of the PC market. Its Chinese brand names include Tianjiao and Fengxing consumer desktops and Yangtian and Kaitian enterprise desktops. Lenovo also has a broad and expanding product line encompassing servers, peripherals and digital entertainment products for the China market.
On a worldwide basis, Lenovo will probably continue to best be known for its business-oriented ThinkPad notebook computer brand. To leverage the name, Lenovo extended the line to include ThinkCentre desktops, ThinkVision monitors, ThinkStation workstations, and ThinkVantage Technologies software tools. Now it is in the process of rolling out IdeaPad notebooks and IdeaCentre desktops to the consumer market.
It is likely Lenovo won’t be satisfied until the whole world knows it by name.