Len­ovo In­dia From PC to PC Plus

Desk­tops, lap­tops, tablets, mo­biles, servers, stor­age: Len­ovo now has ev­ery­thing in its port­fo­lio One of In­dia's largest tech­nol­ogy ven­dors has fi­nally shed off its IBM legacy

DQ Channels - - Front Page - PRIYANKA PUGAOKAR (priyankapu@cy­berme­dia.co.in)

Tagged as the world’s largest PC brand, Chi­nese PC Maker Len­ovo-a US$34 bil­lion per­sonal tech­nol­ogy com­pany, is rapidly trans­form­ing from a pure PC ven­dor to PC Plus So­lu­tion Provider. As part of its PC Plus strat­egy, Len­ovo for­ayed in the emerg­ing busi­ness seg­ments like Smart­phone and Tablet and rede­fined its dis­tri­bu­tion and mar­ket­ing phi­los­o­phy. The Mo­torola and IBM x86 Server busi­ness ac­qui­si­tions re­sulted in 20 per­cent growth with $46.30 bil­lion rev­enue for the year end­ing March 31, 2015. To­day, Len­ovo is the num­ber one PC com­pany in China, Ja­pan, Rus­sia and Ger­many. It is at num­ber 3 in the server space and num­ber four in the Smart­phone seg­ment. Len­ovo em­ploys more than 33,000 peo­ple in more than 60 coun­tries serv­ing cus­tomers in more than 160 coun­tries.

GROWTH JOUR­NEY IN IN­DIA

Len­ovo en­tered In­dia in 2005, by ac­quir­ing IBM’s PC busi­ness mak­ing it the largest PC brand. How­ever, post IBM PC busi­ness deal, many of IBM em­ploy­ees, es­pe­cially the lead­ers went back to IBM, re­sult­ing in a feel­ing of am­bi­gu­ity among em­ploy­ees. To over­come the cri­sis and re­gain the con­fi­dence among the em­ploy­ees and the chan­nel, Amar Babu, the for­mer Man­ag­ing Di­rec­tor of Len­ovo In­dia re­vamped the en­tire man­age­ment and re­struc­tured the chan­nel strat­egy. Lever­ag­ing on its “Pro­tect and At­tack” strat­egy, Babu brought back the chan­nel con­fi­dence and peo­ple started in­vest­ing in the Len­ovo brand.

Since then Len­ovo has grown its mar­ket share ex­po­nen­tially in all seg­ments of the PC mar­ket. As part of its PC Plus strat­egy, Len­ovo stormed into the new busi­ness seg­ments like Tablet, Smart­phone and Server and soon ob­tained a lead­ing po­si­tion in the mar­ket. Ac­cord­ing to the DataQuest es­ti­mates, Len­ovo In­dia’s rev­enue stood at around Rs 6020 crore dur­ing 2014-15. The Com­mer­cial busi­ness was the largest con­trib­u­tor to the rev­enue with nearly 75 to 80 per­cent share and the rest from the other seg­ments. Len­ovo recorded 19.6% mar­ket share for Q1 FY2014-15 and con­tin­ued to be one of the top 3 PC brands in In­dia. The much talked about US$2.91 bil­lion Mo­torola ac­qui­si­tion played a very cru­cial role in Len­ovo’s Smart­phone growth story by mak­ing it the fifth largest Smart­phone maker with around 5 per­cent mar­ket share. In Tablets, Len­ovo en­joys a lead­ing po­si­tion among top five tablet brands with around 10 per­cent mar­ket share.

Len­ovo as­pires to be­come the num­ber 1 PC Plus brand in In­dia and take a lead in the Server space. Se­condly, the com­pany is very ag­gres­sive to in­crease its mar­ket share in the SMB seg­ment. As one of the fastest grow­ing PC mar­kets in the world, In­dia con­tin­ues to re­main a sig­nif­i­cant con­trib­u­tor to the suc­cess of Len­ovo in the global PC arena. Len­ovo be­lieves that the fu­ture will be dom­i­nated by the pres­ence of four screens (PC, Tablets, Smart­phones, and Servers). Len­ovo is con­fi­dent that it will con­tinue to out­per­form and out­grow the mar­ket in In­dia with its ‘Un­stop­pable Len­ovo In­dia’ plan where it wants to be­come the brand of choice for part­ners and cus­tomers.

STRONG HOLD IN COM­MER­CIAL SPACE

Len­ovo’s ‘Pro­tect and At­tack’ strat­egy, which has been a long term suc­cess for­mula, has helped the com­pany to es­tab­lish a strong hold in the

“We do not see any rea­son for not hold­ing the num­ber one po­si­tion in In­dia. In­dia is a very strate­gic coun­try from the growth per­spec­tive and we will work to­wards main­tain­ing a healthy growth rate in all the seg­ments.”

— Rahul Agar­wal,

Man­ag­ing Di­rec­tor of Len­ovo In­dia

En­ter­prise busi­ness seg­ment in In­dia. Ac­cord­ing to IDC re­port, Len­ovo recorded 19.6% mar­ket share for Q1 FY2014-15 and con­tin­ued to be one of the top 3 PC brands in In­dia. The rea­son be­hind achiev­ing tremen­dous suc­cess in the Com­mer­cial space was that Len­ovo fo­cused heav­ily on the prof­itabil­ity and there­fore, did not opt for the Gov­ern­ment deals. The de­ci­sion rightly hit the seg­ment and in­creased the prof­itabil­ity sig­nif­i­cantly.

Len­ovo has a very strong hold in the En­ter­prise busi­ness with nearly 80 per­cent rev­enue com­ing from the seg­ment. The com­mer­cial busi­ness seg­ment has been di­vided into two ma­jor cat­e­gories namely: Large En­ter­prise ac­counts which com­prise Gov­ern­ment, Ed­u­ca­tion and En­ter­prise ac­counts and Small and Medium En­ter­prise ac­counts. The Large En­ter­prise ac­counts dom­i­nate the seg­ment with 35 to 40 per­cent mar­ket share.

Rahul Agar­wal, Man­ag­ing Di­rec­tor of Len­ovo In­dia, who also heads the Com­mer­cial busi­ness, says that the com­pany is work­ing on the new struc­ture to im­prove its pres­ence in the Small and Medium ac­counts. “We have a very good mar­ket share in large ac­counts and we are very ag­gres­sive in in­creas­ing our share in small and medium ac­counts”, he says.

Tier 1 mar­ket is the big­gest con­trib­u­tor to the Com­mer­cial busi­ness and al­most 80 per­cent of en­ter­prise busi­ness comes from top 6 cities and Delhi, Mum­bai and Ban­ga­lore leads with 50 to 60 per­cent share. To fa­cil­i­tate equiv­a­lent con­tri­bu­tion from all the seg­ments and re­gions, Len­ovo is now fo­cus­ing on the emerg­ing IT mar­kets in B, C, and D class cities.

Len­ovo has a com­plete pack­age of of­fer­ings to the en­ter­prise cus­tomers. Its world class in­no­va­tive and tech­no­log­i­cally ad­vanced of­fer­ings in­clude its flag­ship YOGA and Thinkpad se­ries of prod­ucts that ma­jorly fetches the busi­ness. Note­books are the pri­mary of­fer­ings in the en­ter­prise seg­ment along with the wide range of tablets right from 7 inch An­droid to 12 inch Mi­crosoft tablets. Its flag­ship en­ter­prise brand – ThinkPad – re­mains the num­ber 1 brand in In­dia and glob­ally. Post IBM x86 Servers ac­qui­si­tion, the com­pany has strength­ened its po­si­tion in the server seg­ment as well. It has part­nered with the Tele­com ven­dors to pro­vide joint con­nected de­vices to the or­ga­ni­za­tions. In short, Len­ovo is rapidly trans­form­ing from a pure PC ven­dor to PC plus so­lu­tion provider in the Com­mer­cial space. “In In­dia, we are build- ing new pil­lars for growth, po­si­tion­ing the com­pany to be­come an even stronger and more diver­si­fied tech­nol­ogy leader”, Agar­wal says.

Poised to gain the num­ber one po­si­tion in the coun­try in next 3 to 5 years, Len­ovo is strate­gi­cally in­creas­ing its fo­cus on the SMB seg­ment. At the same time the com­pany is heav­ily en­gaged in im­prov­ing its Notebook par­tic­i­pa­tion in the main­stream. Celebrity brand en­dorse­ments, heavy so­cial media cam­paign­ing and ex­clu­sive stores are the part of com-

pany’s strat­egy to boost the Notebook busi­ness.

Len­ovo re­cently re­vamped its com­mer­cial chan­nel struc­ture in an ef­fort to ex­pand the can­vas and cater to a wider base of cus­tomers in the en­ter­prise seg­ment. At the same time, the com­pany in­vests in R&D sig­nif­i­cantly to cre­ate a prod­uct port­fo­lio, which boasts in­no­va­tion and at the same time meets cus­tomers’ evolv­ing needs. As per the mar­ket re­ports, Len­ovo in­vests ap­prox­i­mately $625M in R&D glob­ally, and has about 3,500 R&D engi­neers strate­gi­cally placed around the world.

De­ter­mined to stay ahead of other com­peti­tors in the mar­ket, Len­ovo In­dia lead­er­ship is tak­ing all ef­forts to make Len­ovo the most pre­ferred choice in the Com­mer­cial space. “We do not see any rea­son for not hold­ing the num­ber one po­si­tion in In­dia. In­dia is a very strate­gic coun­try from the growth per­spec­tive and we will work to­wards main­tain­ing a healthy growth rate in all the seg­ments”, Agar­wal says.

TAR­GET 100 PER­CENT GROWTH IN SMB

Though Len­ovo en­joys lead­er­ship po­si­tion in the Com­mer­cial busi­ness, the com­pany has not yet re­flected the same growth story in the SMB seg­ment. Ac­knowl­edg­ing the busi­ness prospects in the SMB busi­ness, Len­ovo has sig­nif­i­cantly changed its ap­proach to­ward the SMB part. As­pires to en­hance the chan­nel base in the seg­ment, Len­ovo sub­stan­tially re­struc­tured its chan­nel and mar­ket­ing strat­egy last year and en­hanced fo­cus on the SMB busi­ness.

In­stead of the four ver­ti­cals ear­lier, Len­ovo has cre­ated two ver­ti­cals i.e. HSB and Com­mer­cial. The trans­ac­tional part of the SMB busi­ness has now been com­bined with the Home and Small busi­ness and back to back busi­ness has been com­bined with the large com­mer­cial busi­ness seg­ment as part of com­mer­cial chan­nel busi­ness. The restruc­tur­ing yielded pos­i­tive re­sult for the com­pany with around 10 per­cent in­crease in the SMB busi­ness in 2014.

“We changed the en­tire fo­cus within the or­ga­ni­za­tion. We now have a ded­i­cated ex­ec­u­tive who holds the re­spon­si­bil­ity of SMB. The restruc­tur­ing en­abled us to grow around 10 per­cent dur­ing the last year. How­ever, we do be­lieve that there is greater op­por­tu­nity for us to grow more”, says Ashok Nair, Di­rec­tor – Home and Small Busi­ness (HSB), Len­ovo In­dia.

In or­der to achieve 100 per­cent growth in the SMB space, Len­ovo has fo­cused on a com­pre­hen­sive chan­nel strat­egy that would drive equiv­a­lent growth across the re­gions. South and West are the two sig­nif­i­cant re­gions that has fetched higher share of busi­ness in the SMB. The Think-Client se­ries has taken the brand for­ward in the SMB seg­ment and the com­pany has fo­cused on in­creas­ing the prod­uct port­fo­lio and it has in­te­grated other prop­er­ties as well. “For us to grow, it is im­por­tant to crack the SMB seg­ment. We are fine tun­ing our ap­proach to the chang­ing mar­ket con­di­tions”, says Nair.

Len­ovo has the core chan­nel phi­los­o­phy world­wide. The com­pany re­cently an­nounced the restruc­tur­ing of its na­tional dis­tri­bu­tion sys­tem (Tier 1 dis­trib­u­tor) across In­dia. The new struc­ture aligns each of the T1 dis­trib­u­tors with Len­ovo’s four dis­tinct ver­ti­cals: Len­ovo Ex­clu­sive Stores (LES), Multi-brand stores, Re­gional Dis­trib­u­tors and Large For­mat Re­tail. This new struc­ture en­sures to take this aligned model to its next level for more fo­cus on each ver­ti­cal.

“We have done in­no­va­tive things to pro­tect the prof­itabil­ity of the RD busi­ness and make them grow more faster and aligned bet­ter. We were the first com­pany to ac­tu­ally pro­vide RDs ex­clu­sive ter­ri­to­ries. To strengthen the RD model, we have in­tro­duced about 1000 LES ex­clu­sive stores in nearly 500 towns which are tied up with RDs. Im­por­tantly, we have brought ex­clu­sive align­ment be­tween T1 and T2 part­ners to help main­tain MOP”, says Nair.

While lever­ag­ing on its new poli­cies for the Off­line chan­nel, Len­ovo has strate­gi­cally strength­ened its online pres­ence. “We were one of the first com­pa­nies to say that we are not aligned with the E Com­merce por­tal. Soon we re­al­ized that this busi­ness will grow ex­pe­di­tiously. We have built up strong en­gage­ment with the online play­ers. We have also cre­ated a Len­ovo online pro­gram that iden­ti­fies a set of part­ners to do the online busi­ness. We be­lieve that by dif­fer­en­ti­at­ing the of­fer­ing through the dif­fer­ent chan­nel, we will be en­sur­ing that to have bet­ter en­gage­ment with the part­ners”, says Nair.

AS­PIRES TO BE­COME NO 1 IN SERVER BUSI­NESS

Con­tin­u­ing its IBM legacy, Len­ovo ac­quired IBM’s x86-based Server busi­ness for worth $2.1 bil­lion in Oc­to­ber 2014. It was the locks, stock and bar­rel ac­qui­si­tion and ev­ery­thing re­lated to busi­ness i.e R& D lab, de­vel­op­ment cell and patent as­so­ci­ated with the busi­ness has moved as a part of the ac­qui­si­tion. As per the deal, IBM’s In­tel based server lines, in­clud­ing IBM Sys­tem x and IBM BladeCen­ter have now come un­der the Len­ovo brand. The IBM’s x86-based server ac­qui­si­tion has made the com­pany world’s third largest maker of servers with around 20 per­cent mar­ket share.

From In­dia per­spec­tive, again the IBM In­dia team moved in lock stock and bar­rel. There is a large con­tin­gent of the In­dia lab team which is erst­while the SDG lab team that has moved in and the siz­able con­tin­gent that works out of the Ban­ga­lore of­fice which deals in so­lu­tions like SAP Hana, vir­tu­al­iza­tions and con­sol­i­da­tions those team mem­bers have moved in as part of the tran­si­tion.

“From a prod­uct per­spec­tive as IBM we were very strong. What we lacked is the ef­fi­ciency of scale and economies of scale. This tran­si­tion brought Len­ovo ef­fi­ciency on the ta­ble. So tech­nol­ogy lead­er­ship of IBM has now cou­pled with the Len­ovo ef­fi­ciency bring­ing the best of tech­nol­ogy and so­lu­tions in the server space”, says Sid­hesh Naik, Di­rec­tor, En­ter­prise Busi­ness Group, In­dia and South Asia at Len­ovo.

Len­ovo has also an­nounced plans to start in­te­grat­ing IBM’s work­force. The ac­qui­si­tion added about 6500 new em­ploy­ees to Len­ovo. In In­dia, the com­pany has al­ready started the in­te­gra­tion process and back­end in­te­gra­tion is ex­pected to com­plete in the next few quar­ters. It has in­te­grated the sales team which will now carry the PC as well as the Server port­fo­lio.

“We have in­te­grated the sales team in April. These ac­count own­ers

“We changed the en­tire fo­cus within the or­ga­ni­za­tion. We now have a ded­i­cated ex­ec­u­tive who holds the re­spon­si­bil­ity of SMB. The restruc­tur­ing en­abled us to grow around 10 per­cent dur­ing the last year. How­ever, we do be­lieve that there is greater op­por­tu­nity for us to grow more.”

—Ashok Nair,

Di­rec­tor – Home and Small Busi­ness (HSB), Len­ovo In­dia “The good part is that af­ter this tran­si­tion, we have come closer to our al­liance part­ners we are no longer com­pe­ti­tion for them. We work closely with soft­ware de­fined net­work­ing ven­dors like VMware and IBM. We also work very closely with part­ners here to build that in­tel­li­gence into the net­work­ing”

—Sid­hesh Naik,

Di­rec­tor, En­ter­prise Busi­ness Group, In­dia and South Asia at Len­ovo

from a sales per­spec­tive will carry PC as well as the Server port­fo­lio. How­ever, it is not easy for a PC seller to im­me­di­ately grasp the ca­pa­bil­i­ties around Servers. There­fore, we have con­sti­tuted a BDM team and so­lu­tion ar­chi­tect team within the en­ter­prise busi­ness group to sup­port this front end sales team on the tech­nol­ogy and so­lu­tion part of it so that we are able to de­liver the en­tire server story to the end cus­tomers”, Naik says.

Since ac­qui­si­tion, the Server busi­ness has wit­nessed a sig­nif­i­cant amount of in­vest­ment and it is very ev­i­dent with some of the new launched that have hap­pened in the server busi­ness in last 9 months. The ma­jor ben­e­fit of the ac­qui­si­tion that will play a ma­jor role in es­ca­lat­ing the server growth is that af­ter this tran­si­tion, Len­ovo has come closer to its al­liance part­ners and they are no longer com­pe­ti­tion for the com­pany.“The good part is that af­ter this tran­si­tion, we have come closer to our al­liance part­ners we are no longer com­pe­ti­tion for them. We work closely with soft­ware de­fined net­work­ing ven­dors like VMware and IBM. We also work very closely with part­ners here to build that in­tel­li­gence into the net­work­ing” says Naik.

Len­ovo has the lion’s share in SAP Hana in the coun­try. Some of the largest en­ter­prises have moved on the SAP Hana that runs on the Len­ovo Sys­tem x servers and it runs the com­plete ERP on a real time ba­sis. Bring­ing some of the ad­vanced tech­nol­ogy in­no­va­tions Len­ovo has also in­tro­duced self en­cryp­tion drive in its server of­fer­ings.

Len­ovo in­tends to gain the num­ber 1 po­si­tion in the Server space. “We in­tend to re­tain that strength and built all the Len­ovo strength around the en­ter­prise busi­ness. Cus­tomers are re­spond­ing re­ally well to the whole tran­si­tion and we are em­brac­ing this tran­si­tion very well”, says Naik.

BET­TING BIG ON THE TABLET BUSI­NESS

Len­ovo en­tered into the Tablet busi­ness at times when the seg­ment was at its lows and fu­ture of the seg­ment was un­pre­dictable. As a step to­wards its con­sumer cen­tric brand strat­egy, Len­ovo set up the stand­alone busi­ness unit for the tablet seg­ment and rede­fined its mar­ket­ing ap­proach. To­day, Len­ovo is the third largest tablet player glob­ally af­ter Ap­ple and Sam­sung with around 4.8 per­cent mar­ket share. The same suc­cess story re­flects in In­dia, where, it en­joys a lead­ing po­si­tion among top five tablet brands with around 10 per­cent mar­ket share.

Len­ovo has a ded­i­cated tablet busi­ness unit with a PNL own­er­ship. The tablet busi­ness con­trib­utes nearly 3 per­cent in Len­ovo’s to­tal busi­ness in In­dia. Len­ovo of­fers some of the marky prod­ucts in Yoga se­ries Yoga Pro 3, Yoga 2, Yoga AnyPen etc. that tar­get both com­mer­cial as well as con­sumer seg­ments.“We are prob­a­bly the only brand that has a ded­i­cated tablet busi­ness unit with a PNL own­er­ship so it is just not a sales arm, but an end to end re­sponse across com­mer­cial and con­sumer lives”, says Ro­hit Midha, Di­rec­tor, Tablet Busi­ness Unit, Len­ovo In­dia.

Len­ovo is also bet­ting on the ver­ti­cals like Bank­ing & Fi­nance and Ed­u­ca­tion, where the com­pany eye on the tremen­dous growth prospects com­ing with dig­i­ti­za­tion. “From an In­dian per­spec­tive, the KYC is pretty strongly used and ad­vo­cated el­e­ment. In BFSI seg­ment, the en­tire KYC tab bank­ing is be­com­ing an ob­vi­ous choice for mo­bil­ity. We are see­ing that while the over­all pie has re­mained the same, one fifth that over­all pie is now be­com­ing the com­mer­cial ap­pli­ca­tion of the prod­uct”, Midha says.

Sim­i­larly, Ed­u­ca­tion is the ver­ti­cal where Len­ovo in­tends to take a lead. “As the dig­i­tal revo­lu­tion hap­pen in the coun­try, we will see more and more user cases com­ing up of re­mote ed­u­ca­tion and aided ed­u­ca­tion. We will con­tinue to be pre­ferred part­ners when it comes to ap­pli­ca­tions and that is our jour­ney to be num­ber one”, Midha says.

The sig­nif­i­cant por­tion of tablet con­sump­tion comes from tier 1 cities and some spill over to tier 2. Around 70 per­cent of tablet rev­enue comes from the top cities. How­ever, Tier 3 and tier 4 are still is a dilemma of large size Smart­phones verse tablets. “We are not see­ing high at­trac­tion in tier 3 and tier 4 mar­kets but we be­lieve that as the ca­ble net­work and in­fra­struc­ture rolls out this mar­ket will start pick­ing up”, Midha says.

Len­ovo’s tablet strat­egy pre­dom­i­nantly fo­cused on the young gen­er­a­tion and there­fore, it has brought the tech­nol­ogy in­no­va­tions in its of­fer­ings like Pocket size TAB A7-30 con­sid­er­ing the evolv­ing needs of the tar­get con­sumer seg­ment.

“From be­ing a very com­mer­cial ways of work­ing ten years back we have ac­tu­ally worked on the way around which is very con­sumer cen­tric. We have in­no­vated at ev­ery stage, keep­ing in mind what is the con­sumer seg­ment we are look­ing at. We have worked on es­sen­tial things like bat­tery, dis­play and au­dio. To­day, all Len­ovo prod­ucts are rec­og­nized for its long last­ing bat­tery life and our dis­play and au­dio is un­beat­able”, says Midha.

In fact, Len­ovo has not just in­no­vated on prod­ucts also in­no­vated on its go to mar­ket strat­egy for the tablet seg­ment. Len­ovo’s new of­fer­ings in the Yoga se­ries are avail­able in its Smart Con­nected De­vices stores, LFRs and part­nered E Com­merce por­tals. “We do both off­line and online and the com­bi­na­tion of both has helped us to gain the top po­si­tion in the coun­try. The Chan­nel has a ROI ex­pec­ta­tion also they look at the qual­ity and brand. The com­bi­na­tion of this has made the chan­nel to work with Len­ovo”, says Midha.

MO­TOROLA AC­QUI­SI­TION PAYS OFF NICELY

The much talked about US$2.91 bil­lion Mo­torola ac­qui­si­tion played a very cru­cial role in Len­ovo’s growth story in the Smart­phone busi­ness. En­tered in the Smart­phone seg­ment in 2012, Len­ovo along with Mo­torola has now be­come the third largest Smart­phone ven­dor glob­ally. Ac­cord­ing to IDC World­wide Quar­terly Mo­bile Phone Tracker, Q1 2015 re­port, Len­ovo’s global mar­ket share stands at 5.6 per­cent. In In­dia, Len­ovo’s Smart­phone ship­ment mar­ket share was 5.2 per­cent in the Jan­uary-March quar­ter of 2015, mak­ing it the fifth largest Smart­phone maker in the coun­try, es­ti­mates Coun­ter­point Re­search re­port.

“Mo­torola is a world­wide rec­og­nized brand and the ac­qui­si­tion has helped Len­ovo a greater stand. There was hardly any base be­fore two years, but now the Smart­phone busi­ness con­trib­utes a sig­nif­i­cant part not only in In­dia but world­wide”, says Sudhin Mathur, Di­rec­tor, Smart­phone di­vi­sion, Len­ovo In­dia.

Len­ovo has strate­gi­cally po­si­tioned brands and the co­in­cid­ing mod­els in the proper mar­kets to max­i­mize brand aware­ness and global reach. At the same time it has main­tained the dif­fer­ent iden­tity of Mo­torola. It has also un­veiled new pre­mium-built hand­sets in the White se­ries prov­ing that it is not just fo­cused on the low-end. Off late since last 6-8 months the com­pany has fo­cused on bring­ing in­no­va­tive latest tech­nol­ogy in terms of 4G. Len­ovo claimed to have sold more than 1.4 mil­lion 4G en­abled de­vices so far.

“We have al­ways been at the fore­front in terms of tech­nol­ogy in­no­va­tions. We have worked on both hard­ware and soft­ware in­no­va­tions to get larger ac­cep­tance to our prod­ucts”, Mathur says.

Len­ovo’s tar­get au­di­ence for Smart­phone busi­ness is pre­dom­i­nantly the youth. There are three cat­e­gories: be­low ` 6000, ` 6000-12000 and rest. Al­most 80 per­cent of its busi­ness comes from the first two cat­e­gories. The com­pany has both off­line and online ap­proach. How­ever, lion share of busi­ness comes from the off­line chan­nel which con­trib­utes to nearly 70 per­cent and rest comes from the online model. Ma­jorly the growth is driven from tier one mar­kets and the next growth comes from the tier 2 and tier 3 mar­kets.

Len­ovo reaches out through four NDs and more than 200 cities dis­trib­u­tors reach­ing out to more than 7000 re­tail out­lets in the coun­try. The com­pany has closed to 200 Len­ovo Ex­clu­sive Stores and there is a smaller ver­sion close to 1000 along with more than 350 ser­vice cen­ters. As a part of its chan­nel strat­egy Len­ovo has dif­fer­ent prod­ucts ex­clu­sive to both the mar­ket places. It re­cently launched new of­fer­ing K3 note on Flip­kart where more than half a mil­lion peo­ple reg­is­tered to buy the prod­ucts on the first flash sale. “We have seen great suc­cess in the online mar­ket where we are reach­ing to nearly 1000 towns and we will cap­i­tal­ize on the strengths of each chan­nel”, Mathur says.

Mathur says the tran­si­tion from fea­ture phones to Smart­phones will en­able Smart­phone ven­dors to pros­per fur­ther. He pre­dicts that 4G is the next big shift that will drive the growth of Smart­phone busi­ness in In­dia. “The adop­tion of tech­nol­ogy in In­dia is much higher com­pare to any other coun­try. There­fore, we are bring­ing cut­ting edge tech­nol­ogy at

“Mo­torola is a world­wide rec­og­nized brand and the ac­qui­si­tion has helped Len­ovo a greater stand. There was hardly any base be­fore two years, but now the Smart­phone busi­ness con­trib­utes a sig­nif­i­cant part not only in In­dia but world­wide. We have al­ways been at the fore­front in terms of tech­nol­ogy in­no­va­tions. We have worked on both hard­ware and soft­ware in­no­va­tions to get larger ac­cep­tance to our prod­ucts.”

—Sudhin Mathur,

Di­rec­tor, Smart­phone di­vi­sion, Len­ovo In­dia. “As the dig­i­tal revo­lu­tion hap­pen in the coun­try, we will see more and more user cases com­ing up of re­mote ed­u­ca­tion and aided ed­u­ca­tion. We will con­tinue to be pre­ferred part­ners when it comes to ap­pli­ca­tions and that is our jour­ney to be num­ber one. From an In­dian per­spec­tive, the KYC is pretty strongly used and ad­vo­cated el­e­ment. In BFSI seg­ment, the en­tire KYC tab bank­ing is be­com­ing an ob­vi­ous choice for mo­bil­ity. We are see­ing that while the over­all pie has re­mained the same, one fifth that over­all pie is now be­com­ing the com­mer­cial ap­pli­ca­tion of the prod­uct”

— Ro­hit Midha,

Di­rec­tor, Tablet Busi­ness Unit, Len­ovo In­dia

“A vi­brant trans­for­ma­tion is hap­pen­ing within the or­ga­ni­za­tion and we are mov­ing to the con­sumer en­tity. Our logo is changed and now it is more colour­ful. That has also re­flected in our go to mar­ket strat­egy and we are pitch­ing right prod­uct for the right seg­ment.”

—Bhaskar Choudhary, Head of Mar­ket­ing , Len­ovo In­dia

value for money price, he says.

In­ter­net of Things (IoT) is the next goal and Len­ovo is build­ing its ca­pa­bil­i­ties to play a ma­jor role in the IoT seg­ment. Sim­i­larly, Dig­i­tal In­dia pro­gram is one of the key cor­po­rate ini­tia­tives where the com­pany in­tends to come in a big way. At the same time, Len­ovo eyes on more than 30 per­cent growth in Smart­phone busi­ness in next three to five years.

CLOUD AND ECOSYS­TEM STRAT­EGY

Len­ovo is de­vel­op­ing a soft­ware ecosys­tem and in­vest­ing a lot of re­sources in the new Ecosys­tem and Cloud Ser­vices group, which will de­velop strate­gies to mon­e­tise com­pany ser­vices. Our whole Cloud and Ecosys­tem strat­egy is evolv­ing and we are clear that we want to play a part in this space. So far, our Cloud strat­egy is lim­ited to cre­at­ing apps for Smart­phone users. From the server point of view, as or­gan­i­sa­tion go to the cloud and do more in­fra­struc­ture on cloud, our servers are ab­so­lutely ready to give sup­port the or­gan­i­sa­tion to de­liver”, says Agar­wal.

VI­BRANT MAR­KET­ING AP­PROACH

Since the in­cep­tion of the com­pany, Len­ovo al­ways had very strong play in the re­la­tion­ship of the com­mer­cial part of the busi­ness. Its vi­brant mar­ket­ing ini­tia­tives that fo­cus on the as­pi­ra­tions of the young gen­er­a­tion have driven the brand much deeper into the smaller towns and in­ter lands of In­dia. The core of Len­ovo’s mar­ket­ing poli­cies lies in pick­ing up right prod­uct for the right seg­ment.

“A vi­brant trans­for­ma­tion is hap­pen­ing within the or­ga­ni­za­tion and we are mov­ing to the con­sumer en­tity. Our logo is changed and now it is more colour­ful. That has also re­flected in our go to mar­ket strat­egy and we are pitch­ing right prod­uct for the right seg­ment”, says Bhaskar Choudhary, Head of Mar­ket­ing.

Len­ovo looks at In­dia in two glances, one is the Ma­ture or Ur­ban In­dia and the Ru­ral In­dia and it has shaped its mar­ket­ing pro­grams ac­cord­ing to the needs of both the seg­ments. “Choos­ing the right prod­uct is a be­gin­ning of any mar­ket­ing strat­egy. Our prod­uct strat­egy de­pends on which is the mar­ket we are ad­dress­ing. In top 8 met­ros, we lead the prod­ucts with prod­ucts which are stand­out for de­sign. We are run­ning very im­pact­ful cam­paign of Yoga se­ries of Note­books and K3 Note. These flag­ship in­no­va­tions have al­ready cre­ated a lot of buzz in the mar­ket”, Choudhary says.

Len­ovo is a pi­o­neer in mak­ing ef­fec­tive use of dig­i­tal and so­cial media plat­forms in brand­ing. The com­pany has brought a tremen­dous amount of ex­per­tise in the E Com­merce mar­ket­ing. Its suc­cess in Smart­phone is pri­mar­ily led by ex­tremely suc­cess­ful E Com­merce mar­ket­ing on all the three or four mod­els that has been launched so far.

“We have taken a se­ri­ous step to build a very strong brand among the con­sumers. We made very ju­di­cious use of our mar­ket­ing re­sources and man­aged to be reach to the po­si­tion of lead­er­ship. We bor­rowed the right eq­uity el­e­ments from our PC legacy like cred­i­bil­ity, qual­ity, ro­bust prod­ucts and suc­cess­fully trans­formed in the new cat­e­gories”, Choudhary says.

Len­ovo has very spe­cific pro­grams pre­dom­i­nantly for PCs where the com­pany ac­tu­ally picks up con­cen­trated geogra­phies where it wants to dis­pro­por­tion­ally re­source and in­crease PC pen­e­tra­tion and gain share. Choudhary says that the two sig­nif­i­cant ac­qui­si­tions: Mo­torola and IBM Server x86 have helped Len­ovo to in­crease its foot­prints in the Com­mer­cial and Con­sumer busi­ness seg­ment.

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