The Lenovo Affair: The Growth of China's Computer Giant and Its Takeover of IBM-PC (Hardcover)

~ Ling Zhijun (Author), Martha Avery (Translator)
Key Phrases: electronics street, business department, watch the tigers fight, Liu Chuanzhi, Yang Yuanqing, Hong Kong (more...)

Editorial Reviews

Review

"...fascinating..." (The Economist, June 2006)

 “…provides a rare insight into the business psyche of the Chinese entrepreneurial spirit.” (African Business, August 2006)

"fascinating" (Long Range Planning, 40/2007)

Product Description

Lenovo is a global leader in the PC market, employing more than 19,000 people worldwide.  Its landmark takeover of IBM’s PC division in May 2005 was a major step for the company and a huge boost for Chinese industry.  The deal proved to the world that Chinese companies are not only competitive in the domestic markets but can also compete at a global level.

Lenovo was founded in 1984 by 11 engineers working out of a small bungalow in Beijing. Their crisis was to create a company that would offer PCs to the Chinese people at an affordable price.  Using the brand name, Legend, it promoted PC usage throughout China and developed the revolutionary Legend Chinese character card that translated English software into Chinese characters.

In 1994, Legend was successfully listed on the Hong Kong Stock Exchange and in 2003 rebranded itself as Lenovo.  The company went from strength to strength and dominated the Chinese market with more than 25% of market share in 2004.

The IBM acquisition has marked another key milestone in the history of the company.  Lenovo now has over $13 billion in annual reserves and possesses necessary infrastructure to develop its markets around the world.  The company is a worldwide sponsor of the International Olympic Committee and will offer funding and support to the 2006 Winter Games in Torino and the 2008 Summer Games in Beijing.

Author Ling Zhijun is well known in China for his reporting on China’s economic reform, and for his book “Jiao Feng”. This book sold over two million copies in China.  The author is a seasoned reporter for the People’s Daily; based in Shanghai.

Martha Avery, the translator and editor of this book in English, has translated a number of works of Chinese literature into English that have been published by such presses as Viking Penguin, WW Norton, HarperCollins, Farrar Straus Giruoux and David Godine.  Her most recent authored book is Tea Road: China and Russia Meet Across the Steppe.  This is an economic history of the region and was published by the Intercontinental Press (China) in 2004.  Ms Avery is based in Boulder, Colorado, but travels frequently to China as business consultant for a large software distributor called Software Spectrum, Inc.

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Product Details

• Hardcover: 250 pages
• Publisher: Wiley (June 23, 2006)
• Language: English
• ISBN-10: 0470821930
• ISBN-13: 978-0470821930
• Product Dimensions: 8.9 x 6.3 x 1.6 inches
• Shipping Weight: 1.6 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon.com Sales Rank: #1,004,019 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

7 of 7 people found the following review helpful:

4.0 out of 5 stars Understanding how business is done in China..., July 30, 2006

By	Thomas Duff "Duffbert" (Portland, OR United States) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

When Lenovo bought the IBM PC division, I think many Americans saw it as an ominous sign of increasing dominance by a foreign juggernaut. In reality, Lenovo has just as many problems as any other international firm. The story is laid out pretty well in the book The Lenovo Affair - The growth of China's computer giant and its takeover of IBM-PC by Ling Zhijun (translated by Martha Avery).

The book covers the history of Lenovo, or Lianxiang as it is known in China, and its founder Liu Chuanzhi. The history goes back to 1984 when a small group of people from the academy got permission to start a business enterprise. This is the first major mind-shift you'll undergo as you read the story, as the Chinese culture and government make for vastly different rules in the business world. During their formative years, there was a tight connection between the academy and the business, so much so that workers in both areas could go back and forth between the two groups, drawing salaries from both. While it may sound like the government backing would guarantee success, the reality is that you have far more expectations and political gamesmanship to account for. And if you fall out of favor with the ruling party, your demise is pretty much assured.

As the years unfolded, up to and through the internet bubble, Lenovo earned the reputation of a company having nine lives. On numerous occasions, personality issues could have torn the company apart (and nearly did). Supply and cost considerations, along with foreign competition, almost caused the company to go bankrupt a number of times. The same business forces at work in the West (profit margins, competition, labor costs, etc.) also affect Chinese companies. You realize that the mere fact of being a Chinese company with government support doesn't automatically pave the way to success. The chapter on the IBM purchase is almost dealt with as an after-thought in the book. There's not much ink devoted to that particular event, but the rest of the book does a good job in setting the stage for what something like that means to a company like Lenovo.

This isn't a particularly easy read for a westerner. My unfamiliarity with Chinese names made it hard to follow the cast of characters. I'm sure the translation factor also comes into play in terms of readability. But it's a book I'd recommend for a number of reasons. You'll see how China's communist, war-driven history flavors business strategy at all levels. Companies looking to operate in China will start to understand how the culture is so very much different than ours, and how ignoring that fact dooms you to failure before you even start. But most of all, you'll see that it *is* possible to compete with companies like Lenovo, because they are just as human and prone to misjudgements as any other business...