lenovo CEO Yang yuanqing recently internally to deliver a speech on how to incubate new business, further optimize the business model to make an important interpretation.
Mr Yang pointed out that although lenovo’s overall performance is in the best level, but as its core and the mainstay of China are suffering a crisis, the business only for flat development, there is no real growth, lenovo is stable and long term are bound to crisis should focus to hatch new business, at the same time to optimize the existing business system.
on the question of how to hatch new business, Yang yuanqing “two lines” is put forward. A line direction is the enterprise customers, from the terminal product equipment to expand to the background. Another line direction is consumption, emphasize the rooting in the era of Internet of things to focus, so in the future the main focus is to return to home, let the home more intelligent; Another is on the road, such as cars.
below is Mr Yang internal remarks:
in the conference room has done a lot of important decisions, these decisions is to ensure that lenovo flourishing in the past years, it is very important to maintain growth.
this meeting was just right, today is just the timing. Why do you say that? Although our performance at the best level in history, global business is in a strong development momentum, especially Europe and the United States, have set up a new growth momentum, become a new growth engine, all areas of business are more balanced than in the past. But at this time we need more in time of peace prepare for war, save for a rainy day! Today we are both in the internal or external are faced with enormous challenges.
it is a Chinese business is indeed encountered a candy. Business for a long time, China is the core and backbone of global business, especially in the aspect of profits made a significant contribution. China business for the company to expand overseas markets not only provides enough resources (financial resources and human resources), is also a new business field and incubation. But in the past two years, China’s business growth in a very big challenge, in fact we have no growth, even including the mobile phone, we are also drawn. Here are the personal computer market atrophy, the cause of the growth, had macro economic reasons, but all is period, we more or want to review their. We are in the strategic direction and implementation of new business, consider how? The consideration on the execution of strategy? Performed on the strength of the resolute don’t determined?
on the other hand is an external also gave us a big challenge. Although some challenges had not directly to our core business, but currently they have formed a large market impact, most likely will gradually affect our core business. For example, the impact of the new Internet companies in the field of smart phones. No problem, of course, this does not mean that they themselves, they want to grow up to be our company, I’m afraid to have more candy to lead, they lacked the ability than we lacked the ability to develop new business will not less. But indeed, they have a lot of advantages is that we should go to study, they hold the characteristic of the age of the Internet, including marketing, fans economy, development way and so on. Such as the rapid growth of domestic server vendors, they in the field of the server from the top and down penetration, to us in the past mainly covers the low-end and the strategy of small and medium-sized customers, is a big challenge, especially in the market transition towards IPDC, cloud services and cloud computing. After you finish your IBM x86 server business mergers and acquisitions, of course, we will greatly strengthen the advantage in the high-end product line, with complete product portfolio and coverage.
as a result, China, and the situation of the big challenges facing external down business again, to talk about innovation, is very timely and necessary.
today I want to talk with you two topics:
the first topic is how to hatch new business. Hatching new business, of course, the first is to seize the business direction, then how to organize and implement;
the second topic is how to further optimize our business model. This business model is not only for the old business, for new business incubation, the business model has a great help and promote the optimization of the same, or even necessary.
the first topic, how to hatch new business?
in strategic direction, actually not that difficult. Everyone concern, see very consistent with the group level.
a line is the direction of corporate clients: we must from the terminal product equipment to expand to the background. Background equipment sales and terminal equipment sales is completely different, we need to set up to provide solutions, consulting, after-sales service for enterprise background and so on.
another line is consumption direction: our industry has experienced the PC era, then is the mobile Internet era, in the future? Many people call it the Internet of things, but now the category of Internet of things is too big, we still need to take root, to focus on. Moving part, I believe, after covered with devices like mobile phones, tablet, focus in the future or to home inside, make household more intelligent; Another is on the road, such as cars.
in these aspects, from the point of view of technology and products, the whole company, institute and product group are preparing, believe that we will not be left behind, next year’s CES and MWC is exciting and release to the market. New bench attempt to do is also very good, do a job, act as an advance party is part of the overall layout.
the direction, how to do? According to different business for a different approach, have exalted skyer approach where large armies battle combat large armies, made the whole company is a big strategic direction: such as server, such as smart phones, through mergers and acquisitions to strengthen ability, promoting scale, belong to this category; There is also a team approach (e.g., new bench), even can have a further extension of: some teams internally, some outside; In the form of investment, the investment holding, or investment accounts for a small unit, is possible.
these in LEC has depth and deployment, the China side should take root, for a specific new business, such as servers, storage, etc., you are all to form a set of appropriate style.
how to implement, br) we often say six elements: organization, personnel, process, target, evaluation, motivation. These must want to know, in order to be a complete implementation. Of course, for exalted skyer direction and in the direction of the team, the specific practices are not the same.
exalted skyer more is to consider how to take advantage of the company’s existing, the existing platform to expand new business. For this type of business, of course, are particularly want to remind everybody can’t be too confident, too stuck in the past, think we have ability to natural extension to the new business, tend to give an issue here. Such as mobile phones, we thought the PC channel is suitable for sales, but that is not the case. Similarly, when we do business of server, although our channels can be greatly, have the aid of the advantage of our relationship is very strong, but other aspects of disadvantage may block out these advantages. This is to exalt skyer special need to be careful.
in view of the team, the keynote is to let it, let it end-to-end integration, but also to consider how to take advantage of the company: the advantage of procurement, research and development advantages, the advantage of the platform, the ability of supply chain, and brands, channels, sales, and so on. These are actually a lot of small companies want to come for us, if we don’t try to take advantage of inside, then lost. In general, the business must make decisions from the mechanism and the big tone, but a wise man will know what to gain, where to be independent.
incubation well by using the method of this new business, we should to the next city again in the coming years, and should not be stagnant. This is the planning, lies in the strategy. Once the new business momentum up and growth is natural, and faster at the meeting. Microsoft, Intel, with 30 years development to today’s scale, Google (weibo) with more than ten years, apple is two levels of jump, before Steve Jobs back to the brink of despair, then there is a good strategy and innovative products, secondary rocket launch, now is far more than the size of Microsoft, Intel, IBM, even they are now IT’s largest enterprises, the business size of $1000 – $200 billion a year. Now, we are 40 billion, 50 billion after completing the acquisition, our ultimate goal is through the start stage, also want to the scale of 100 billion.
this is our strategic direction, and how to hatch new business strategy.
the second topic, how to further optimize our business model?
is not only to meet the challenges of the new Internet companies, is also to make our own companies more efficient, more competitive. Don’t have a business model can be permanent, it according to the different market, competition, technology of different adaptation.
the core of our business model reconstruction, is the shift from selling products to customers. So not only for enterprise customers, for customers. We sold products in the past is over, after waiting for customers to find us, we don’t know where the user is, and what is their next demand, it is not in the business customers.
we now do social media, interactive marketing (engagement marketing) is through to the end user? Mainly through advertising, passing information through opinion leaders, I believe that this is not the most advanced way. In the future we need the marketing directly to do the ready-made users! They are our customers, if we can’t through the products they sell and upgrading or new product, it is not a business client mode. All fans talking about the economy, the new Internet companies really strong, they have a fan, fan in influencing fans fans. So how can we put the system building? The first step, we must let the employees all take pride in their products, not only willing to use, also willing to promotion, publicity and sales. We should draw nourishment from the existing users, know what their expectations and expectations for the next generation products. When we give a new product and new accessories, we know where the customer. Through these customers, the community and the network, to product sales and promotion. This is the business customers.
to corporate customers, of course, there are enterprise customer management method, we need to establish and improve the ability of consulting, products and services.
service is very important. Just we talked about the direction of the future technology, products, strategy, will transfer from mobile devices in the home, at that time, the service will need more. Although the direction of IT is as simple as possible, but much more equipment, all kinds of the interconnection and collaboration between equipment and so forth more demand for services. We should not only accumulation of enterprise customer service ability, also want to accumulate the user’s service ability on consumption. This also is from selling products to customers is an indispensable part of.
more interactive product development, we sell products to the people, this group of people will be become our this kind of product a member of the community, their voice to ears to the product development department, the most concentrated, reflect the opinions of most people needs to pay attention to and solve in the next generation products and perfect.
with such a community, we can not only have the ability to do marketing, will also have sales potential.
in the field of personal computers, today we have a 35-40% of the market in China. This is a huge advantage, great treasure, we should know how to maintain the user, the user satisfaction, this is our first task, they is a personal computer users, should be our users of mobile phones, TV, routers, we should make full use of these existing customers. In these respects, lenovo has advantages, but we need to make a change, need to face the challenges faced by now.
this is how the hatching new business, how to implement change in business model, business model from selling products to customers.
if you can do this two things well, I believe that China’s business will take off again, like apple, loaded on stage. China team is invincible team with a glorious history, but in the face of new challenges, you still need to pay great attention to, be sure to adjust, make a change. If you do not take the initiative to change, you will be change! If you don’t take the initiative to change lenovo, lenovo will be left behind!
I’m full of confidence to the team.