Three years ago Lenovo began its journey in India with a promise of carrying forward IBMs PC legacy, as well as making a mark of its own. It courted the Indian channel with gusto, in the process coming up with two sales modelsrelationship (large deals, mix of direct selling, and channels) and transaction (only channels with SMB and consumer focus).

Initial results were promising, as after one year Lenovo bagged awards in five out of nine parameters in the IDC-DQ Channel Satisfaction Survey (its overall rank being #2). Even the dual sales model first tested in India proved successful, and its success made Lenovo expand it to other geographies as well.

Some of the initial euphoria seems to have cooled off. The company has still managed to post good numbers in FY 08, though less spectacular than competitors like Acer, Dell, or HP, thanks to the deep rooted and loyal customers of IBM PCs in India.

While Lenovo has cashed in well on IBMs legacy, it has also ensured that its revenue remains enterprise centric. Competitors like HP, and even Acer, have taken a bigger chunk of the consumer market thanks to their aggressive entry level pricing. And with Dell also eying the consumer space, the going could become tougher. Lenovo also tried redressing the balance by launching Ideapad PCs designed and built specifically for consumer needs like entertainment and gaming. The commercial segment, however, continued to boom.

Rank-20
l Start-up Year: 2005 l Products & Services: Desktops, laptops, and workstations l Employees: 331 l Address: Embassy Golf Links Business Park, 2nd Floor, Fair Winds, No 10/3, Koramangala Intermediate Ring Road, Bangalore-560071 l Tel: +91-80-30533192 l Fax: +91-80-30533003 l Website: www.lenovo.com/in
Highlights n Rolls out second plant in Himachal; 2 mn capacity n Launched the ThinkCentre A61e ultra small form factor desktop n Forayed into workstation space with ThinkStation and partnered with AT&T Williams F1 team n Brand ambassadors Saif Ali and Soha Ali Khan worked very well Strengths p Ability to continue IBMs legacy on the Think range and retain customers p Good traction in the commercial segment p With two manufacturing entities in India, supply is not an issue Weaknesses q  Channels: distribution model upsetting the balance of distributors		Amar Babu, MD Ramasubramanian Komaralingam, CFO Rahul Agarwal, executive director, WW Marketing Hub and India Marketing Ramprasad Lakshminarayanan, VP, Transactional Consumer Sales Jaivinder Singh Gill, executive director, Relational Business Sudhir Puthran, director, Service and Support

Lenovos relative failure in the consumer space and its cooling off with channels could be attributed to factors like top management churn, choosing a flawed distribution model, and subsequent lack of balance in appointing distis. The exit of senior executives like Neeraj Sharma (MD), Ajay Mittal (VP, Marketing), and Vivek Malhotra (VP, Transaction Business) followed by Princy Bhatnagar, sent off wrong signals in the market.

Going against the trend and opting for a regional distribution model instead of a national one upset the balance of Lenovos appointed distributors. Now, finally, with a hardcore channel personality like Amar Babu at the helm, these issues should be tackled this year.

Page(s)   1