Executive Briefings

Lenovo Shows How Companies from Emerging Markets Can Overcome Difficulties to Become Global Brands

On July 25th Lenovo, a Chinese computer firm, announced a deal to sponsor the National Football League. The PC maker has come a long way since 1984, when it was founded by 11 engineers at the Chinese Academy of Sciences who wanted to supplement their meager stipends.

In 2005 it burst onto the global scene. The company is now the second-largest PC maker in the world and hopes to grab the top spot from Hewlett-Packard soon. Lenovo is one of several emerging-market firms striving to become global brands. They are no longer content to do the grunt work for Western firms, for two simple reasons: non-branded companies typically earn gross margins of 3 percent to 8 percent and are constantly at risk of being undercut by cheaper rivals. Branded firms enjoy fatter margins (15 percent or more) and more loyal customers.

Yet becoming a global brand is exceedingly hard.

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Keywords: retail supply chain, international trade, supply chain management, emerging-market companies, going global in sales

In 2005 it burst onto the global scene. The company is now the second-largest PC maker in the world and hopes to grab the top spot from Hewlett-Packard soon. Lenovo is one of several emerging-market firms striving to become global brands. They are no longer content to do the grunt work for Western firms, for two simple reasons: non-branded companies typically earn gross margins of 3 percent to 8 percent and are constantly at risk of being undercut by cheaper rivals. Branded firms enjoy fatter margins (15 percent or more) and more loyal customers.

Yet becoming a global brand is exceedingly hard.

Read Full Article


Keywords: retail supply chain, international trade, supply chain management, emerging-market companies, going global in sales