Lenovo 2009 Annual Report Download - page 35

2008/09 Annual Report Lenovo Group Limited
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Lean Cost Structure
The Group’s distinctive capability and expertise in
managing costs and expenses in China allows it to
achieve high efficiency and has been one of the
most important factors for its success in China.
This has become more critical under the current
economic conditions.
In the 2009/10 fiscal year, Lenovo will replicate this
lean cost structure in other emerging markets. With
the restructuring actions announced in January 2009,
Lenovo is expected to realize annual savings of
approximately US$300 million on a run rate basis in the
2009/10 fiscal year. At the same time, Lenovo plans
to continuously improve the efficiency and expense
structure of its relationship business through internal
best practice sharing and external benchmarking to
increase its marketplace competitiveness.
The Group will also review the costs of its IT system,
services and global supply chain to identify additional
opportunities for improvement. Given global economic
instability, the shift in mix from desktops to notebooks
and the overall volume decline in the PC industry, the
Group is carefully evaluating its manufacturing footprint
with a strategy that includes a mix of in-house, contract
manufacturing, and ODM solutions.
Innovation Leadership
Lenovo owns the greatest track record for innovation in
the PC industry and remains committed to innovation in
its products and technology.
While it needs to be cost-effective, innovation can
drive business and add value for customers. Lenovo’s
research triangle in Beijing, Yamato and Raleigh allows
the Group to achieve the lowest innovation cost in
the industry and continue to break new ground in
developing innovative products. Going forward, Lenovo
will continue to focus on delivering innovation based
on its four key priorities: outstanding premium Think
products; creative and stylish Idea products; innovation
that drives new business opportunities; and innovation
that is efficient and customer-focused.
A WINNING CULTURE
To achieve all its goals with execution excellence,
Lenovo needs a truly integrated team that can transfer
energy into results by keeping its commitments and
achieving targets day in and day out. The Group has
made good progress integrating its teams following the
acquisition in 2005. Efforts at organizing culture training
sessions and trust workshops, as well as enhancing
the human resource planning and performance
management processes have proven instrumental.
Lenovo will continue to cultivate a fast, disciplined
winning culture suitable for a PC company that needs
to act fast and efficiently in the marketplace. The Group
will emphasize particularly the importance of keeping
commitments which is indispensable in achieving
execution excellence. At the same time, the Group will
promote the spirit of entrepreneurship, encouraging its
management team to proactively take ownership of their
jobs and meet challenges as if they were the owner of
the business. Lenovo strives to make the differences
and diversity of its teams into a source of strengths to
achieve its goals.
While it braces itself against the current economic
challenges, Lenovo is confident that with the successful
execution of strategic priorities based on its business
strengths, Lenovo will emerge as a stronger player in the
PC market.