Lenovo 2011 Annual Report Download - page 24

Download and view the complete annual report

Please find page 24 of the 2011 Lenovo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 137

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137

MANAGEMENT’S DISCUSSION & ANALYSIS
2010/11 Annual Report Lenovo Group Limited
26
FUTURE PROSPECTS
Worldwide PC market growth moderated further in the second
half of fiscal year 2010/11 and even posted a negative growth in
the fiscal quarter four. Challenges to the worldwide PC market
demand – such as uncertainties about the pace of the global
economic recovery, the ongoing debt crisis in Western Europe,
further macro-economic tightening measures in China, and
tablet cannibalization at entry level consumer PC – likely will
continue.
The corporate refreshment cycle will continue to help sustain
growth in commercial PC demand, while consumer PC
demand likely will face continued “head winds” amidst a
weakening macro-economic environment and cannibalization
by tablet products. Nevertheless, Lenovo remains optimistic
about the global PC market outlook and confident that the
Group will continue outperforming its major industry peers in the
new fiscal year through balanced growth and solid execution of
its well-defined strategy.
The Group will continue its “Protect and Attack” strategy
intended to drive continued growth in unit shipments, while
expanding margins and delivering more values to its customers
and shareholders.
The China PC market is expected to show gradual
improvement in the new fiscal year benefiting from the
momentum of China’s healthy, growing economy. The relatively
low PC penetration rates in emerging cities and suburban areas,
and relatively low year-on-year comparison bases in coming
quarters, likely will result in improved rates of PC market growth,
especially in the second half of the new fiscal year.
The Group is confident that the China PC market will continue
to outperform the worldwide PC market over time, and that
its leadership position in the country will provide a unique
competitive advantage in capturing this growth opportunity.
Lenovo will endeavor to protect its core PC business in
China by extending its PC market share lead and increasing
profitability, and also by expanding its commercial business with
servers and workstations. The Group will further attack market
share in China’s emerging cities, aggressively develop the MIDH
business and align the end-to-end route-to-market organization
to improve efficiency and profitability.
“Protect and Attack” Strategy, Fiscal Year 2011/12
AttackProtect
- Innovative Products & User Experience
- Business Model
- Streamline E2E model for 3 customer segments
- Improve E2E speed
- Lead The Lenovo Way
- Meet commitments/Take ownership
- Quality focus
- Global Branding
- Focus on consumer voice
China
1. Extend PC share lead
2. Increase profitability
3. Grow commercial with Server and
workstation
Mature Relationship
1. Deliver steady profits in all regions
2. Drive share gain across the board
MIDH
1. Grow MIDH presence globally
- Pad/Phone/Smart TV in China
- Global Pad offering
2.
Drive convergence (cloud devices, killer apps, best user experience)
Emerging Markets (excluding China)
1. Get 10%+ Share in key countries
2. Attack SMB/consumer & move to profitability
Mature Transactional
1. Grow share through Home/SMB and retail channels
2. Expand attach business to drive profitability
Innovation leadership
Effective business model
Global culture