Business Week interview with Yang Yuanqing: we need to be careful in the United States

Lenovo chairman Yang Yuanqing recently accepted the "business weekly" reporter Bruce Einhorn interview, "to buy Lenovo PC is equivalent to China government sponsored improper argument", Yang Yuanqing refuted.

The following is an interview clip: Q: the acquisition of IBM PC such as the United States well-known brands, what do you think of it?

A: we are faced with many challenges, we must make Lenovo into an international brand, the IBM brand must be transformed into Lenovo brand.

Q: how is it going?

Answer: divided into three stages: first, to ensure customer stability, improve customer satisfaction. HP Compaq acquisition, for example, in just a few months time, customer churn reached 30%. Therefore, to ensure customer stability is the most important.

The second step is to achieve profit growth, the process takes 2-3 years. Do not expect to achieve a net profit of 5% in the short term, it is unrealistic. Because we also want to increase production, build their own core competitiveness, but also invested heavily in the brand and promotion.

2-3 years later, we will usher in the third phase, that is, a stable profit stage. By then, our profit and revenue growth rate on the basic balance.

Q: does Lenovo lose market share outside China?

On the contrary, the situation is getting better and better. In the past three quarters, each quarter of the market share is increasing. Typically, after the merger of the two companies, will lose some customers. Fortunately, however, Lenovo and IBM PC complementarity is very strong, so only a small part of the loss of customers. In the last quarter, we did not lose any share in the U.S. market. In Asia and the Chinese market, there is an increase in share.

Q: how do you see the new Lenovo opportunity?

A: we want to use the successful experience of Lenovo in the Chinese market to other emerging markets, such as India, Brazil and Mexico. The second goal is the small and medium enterprise market. Prior to the acquisition, Lenovo's core business in the Chinese market, while IBM specializes in large enterprise market. Therefore, in the small and medium enterprise market is relatively weak. At present, 75% of China's business is a "relational" customer, that is, large business customers, while small and medium enterprises account for only about $25%.

Q: what do you think of the American market?

A: we have entered the U.S. retail market through the chain, but our primary goal is emerging markets, followed by the mature market. Especially in America, we need to be careful. In this regard, we can learn from the practice of competitors.

Q: some critics have pointed out that the purchase of Lenovo products is sponsored by the Chinese government, how do you treat this attitude?

Answer: at present, the number of employees in the United States after China, the number of employees, we will be the headquarters moved to New York, my office in New York, it is a signal. We want to create an International Association of enterprises, so as to appoint an American new Lenovo CEO. We just want to prove that the new company is an international company.

Q: how do you think PC is a small profit commodity, there is no room for innovation?

Answer: PC business profit much indeed, but this means that we will improve the efficiency to improve the yield and market competitiveness. I don't think that PC has no room for innovation. In areas such as security and connectivity, there is still much room for improvement.