Computer Maker's Woes Reflect the Heat Felt By China Manufacturers
BEIJING -- When a high-level Communist Party office invited bids for replacing hundreds of aging computers earlier this year, chief technical officer Ren Jinhua wasn't inclined to go with the current supplier, China's biggest computer maker, Lenovo Group Ltd. The main circuit board on a Lenovo desktop unit had burned out when powered up, and that turned off Mr. Ren. "We felt the quality of Lenovo's computers was slipping," he says.
Much to his relief, Mr. Ren says, Lenovo's bid failed, as did those from two other domestic companies. In May, the International Liaison Department, which handles foreign relations for the communist leadership, bought 360 new computers from U.S.-based Dell Inc. Dell's price was lower than Lenovo's by $2.50 per unit and its computers had a reputation for reliability, Mr. Ren says. With the Dell units running smoothly, the office has given away most of its older, Lenovo models, some to charity.
Lenovo's failure to capture the Communist Party office's order wasn't just a one-off missed sale, but points to deeper troubles besetting one of China's most celebrated companies. In recent months, the company, which recently changed its name from Legend Group Ltd., has seemed adrift. Global rivals are gaining ground on its home turf, where the company has long been dominant. And even as its profit margins fall in the domestic market, Lenovo is passing up opportunities to expand overseas.
The response from analysts and investors has been harsh. Since June 1, when the company announced results for the quarter that ended March 31, prices of Lenovo's Hong Kong-listed shares and its American depositary receipts tumbled, skirting 52-week lows. The closing price in Hong Kong Friday was 14% below that of June 1, while the ADRs were 17% lower.
Lenovo's predicament highlights the growing pains facing many Chinese companies, as they strive to become global players while defending their domestic market share from foreign rivals. After bulking up on the booming Chinese market of the past decade, they are stumbling in the face of fiercer competition. Some are having trouble translating the business models that brought them success at home to overseas markets; others are losing their lock-holds on local markets as China's World Trade Organization commitments level the field for foreign and domestic companies.
State-backed Qingdao Haier Co., whose small refrigerators are big sellers at Wal-Mart Stores Inc. outlets in the U.S., saw profit fall 7% last year from the previous year, in part due to competition from foreign entrants to China. Huawei Technologies Co., a private supplier of communications gear, is stretching its finances thin, as it tries to produce a broad product range while mounting an aggressive international expansion, analysts and former executives say. Its foray into the U.S. market has been slowed by a lawsuit filed by Cisco Systems Inc. alleging that it copied part of Cisco's Internet router and by suspicions that it has ties to the Chinese military.
"The global market is increasingly becoming the barometer of success for Chinese enterprises," says Denis Fred Simon, a former consultant in China and now provost for State University of New York's Levin Graduate Institute of International Relations and Commerce. At a seminar in September in upstate New York, Chinese scholars repeatedly held up Lenovo, Haier and Huawei as national champions, while Mr. Simon and other American scholars argued that these companies need a different prescription to survive: better internal management, higher outlays for research and more attention to business performance, not just rapid growth.
"That is the bottom line," says Mr. Simon. "If these enterprises cannot withstand the real pressures of global competition while standing on their own two feet, they will not be successful."
Until recently, Lenovo seemed poised to take up the challenge. The company towers over China's personal-computer industry, with about one-quarter of the market, twice that of its nearest competitor. Its origins as one of the first high-tech commercial spinoffs of the state-backed Chinese Academy of Sciences lent Lenovo the government's imprimatur, assuring access to loans from state banks. In the late 1990s, it successfully pushed out foreign imports by manufacturing bare-bones, easy-to-use models for Chinese buying their first computers; one model allows the user to connect to the Internet and load a browser with the touch of a single key. The company began manufacturing cellphone handsets two years ago, hoping to exploit its well-known brand in China in a fast-growing field that promised a new source of revenue.
In interviews and speeches last year, Chief Executive Officer Yang Yuanqing and Chief Financial Officer Mary Ma laid out an ambitious expansion plan: Sales outside China would account for more than one-quarter of all sales by 2006, up from less than 2% in 2003, while overall revenue would more than triple to $10 billion by 2010. Lenovo launched two computer models in Italy but the campaign fizzled for lack of advertising. International management consultant McKinsey & Co. and public-relations firm Burson-Marsteller were brought in to plot strategies for Germany and elsewhere in Europe. Top management spent the better part of the year discussing whether, when and how to go overseas, industry executives and consultants say.
In the meantime, Lenovo began slipping in its home market. The move into the handset business didn't produce profit, partly because Lenovo was a late entrant to a field crowded with well-established national and multinational firms. Sales slackened in its core personal computer business. From mid-2003, while the overall PC market grew 18% or better per quarter, Lenovo's share remained static. Its share fell in the first quarter this year, to 24% from 28%, according to International Data Corp. In February, management ordered a restructuring of the company to refocus resources on the PC business, in part by trimming product lines in half, to five.
Yet a debate goes on between Mr. Yang, Ms. Ma and Lenovo founder and chairman Liu Chuanzhi over strategy. At issue, executives and consultants say, is whether to solely focus on PCs or to diversify into consumer electronics in the hopes of following companies like Sony Corp. of Japan or South Korea's Samsung Electronics Co. "They're internally at war with themselves," says an information-technology consultant in Beijing familiar with the company.
Lenovo declined to make senior management available for comment for this article, but in a statement said the company's overseas plans were misunderstood. It said international expansion remains a long-term goal but that the company "will concentrate on the growing China market" this year and next. Even so, the company is giving the impression that it is looking for other kinds of business. Earlier this month, it agreed to make, market and sell in China a software-intensive technology for call centers licensed by a small U.S. company, CosmoCom Inc. "They want to be more than a supplier of PCs," says Ari Sonesh, chief executive officer of CosmoCom.
Lenovo's apparent lack of focus has helped other players move into its territory. Dell, most notably, has benefited, rapidly gaining market share by applying the same formula that made it so successful in the U.S.: managing lean supply and distribution chains to assemble reliable, competitively priced computers on order and delivering them quickly. Some 2,000 Dell employees process orders, many placed via the Internet, from a custom-built complex in the southeastern port of Xiamen.
Slow at the start, shipments have picked up during the past two years, growing 71% in 2002 and 60% last year. In 2003, Dell's China revenue surged 38% while it has been expanding to servers from desktop and notebook computers. Dell says it is already the market leader of that sector for China. Just as importantly, it is targeting the high-end; the U.S. company asserts that large and medium-size enterprises, which account for more than two-thirds of Lenovo's biggest customer base, now account for more than two-thirds of its China business. Dell is now the top multinational computer maker in China and No. 3 overall, with 7.4% of the market. "We've been on a tear in China," says Bill Amelio, Dell's Asia-Pacific head.
Dell's burgeoning presence marks a turnaround for foreign computer companies. They held sway in China in the early 1990s but fell behind by paying scant attention to their customers, often selling obsolete models that were ill-suited to a market largely comprised of computer novices. But just as Lenovo once capitalized on those missteps, the multinationals too have learned from their mistakes. Now Hewlett-Packard Co. is rolling out new lines of PCs in China almost as soon as they hit its other markets, and making gains. Dell's Xiamen facility serves Japan, assuring that products for China are on a par with the international market. These companies' global supplier networks give them an advantage in pricing power over Lenovo. Prices for Dell's computers are about 10% lower than Lenovo's, says Kirk Yang, an analyst with Smith Barney, a unit of Citigroup.
Though these foreign rivals hold only a small share of the market, for Lenovo, "it's a mosquito bite that could eventually turn into a leg amputation," says Bryan Ma of IDC, which monitors computer sales and trends.
Lenovo's challenge now is to remount the learning curve. As part of the restructuring, the company is taking a page from Dell, promoting more direct sales via the Internet, promising more efficient management of inventory and renewing attention to the corporate market. At the same time, it is trying to better tap the creative energies that propelled the company to the top of the market and to distinguish its products from Dell's. "Our CEO has a vision for differentiation," says Qu Yuezhang, a company spokeswoman. "We want people to feel that it's not a black box. It's helpful, easy to use, friendly."
Central to that effort is a new design center, part of a modern corporate campus of glass-walled buildings tucked against cornfields in northern Beijing. Dozens of engineers in their 20s and 30s hunch over work-stations to invent new designs for computers and handsets. One floor below, a laboratory turns out prototype plastic cases in all colors and textures. "It's said that only Lenovo and Sony have this kind of plastics-sample lab," says Ms. Qu, as a colleague waves a transparent, fluorescent green sample under a filtered light meant to approximate daylight.
Yet much of this work seems aimed not at corporate clients, but at the consumer market where profit margins can be slim. Lenovo says it wants to sell the bulk of its products through the extensive networks of distribution agents and retailers that has given it a wider reach than its rivals. But in a business where competition is driving down prices, using these networks to reach consumers adds to costs. Some retailers complain that Lenovo, in its relentless drive for sales, is pushing them to purchase larger numbers of machines. That forces them to slash prices to reduce inventories -- and, in some cases, is driving them to Dell.
At the bustling BuyNow computer mart in eastern Beijing, the kiosk of the Beijing Toyou Technology Development Co. used to stock Lenovos. Kiosk manager Zhao Zhong says Beijing Toyou was one of the computer maker's top distribution and sales agents. But the price pressure became too intense: He earned less than $1 in profit on the sale of a $1,500 computer. "I said to myself there's no way to go on," he says. Beijing Toyou agreed: It stopped carrying Lenovo.
Now many shops offer Dell computers, even though the company doesn't officially sell through retailers. Distributors, who also act as purchasing agents for government agencies, are over-ordering from Dell on behalf of their clients and selling the additional units retail. Since the units were bought at a discount, Mr. Zhao says, customers get a good price and retailers make a profit. "Michael Dell is my hero," says Mr. Zhao. "Dell's sales model bears no risk."
联想困境凸显中国企业切肤之痛
中共中央对外联络部(International Liaison Department, 简称：中联部)在今年早些时候对更换数百台旧电脑进行招标时，资讯办主任任锦华不太愿意继续使用当前的供货商--中国最大的电脑生产商联想集团(Lenovo Group Ltd.)。一台联想台式电脑的主板在开机时被烧坏，这让他有些心灰意冷。他说，“我们感觉联想电脑的品质正在下降。”
任锦华说，联想竞标失败，这让他如释重负。同样另外两家国内公司也败下阵来。今年5月，负责处理共产党对外关系的中联部最终从美国戴尔公司(Dell Inc.)手中购买了360台新电脑。任说，戴尔每台电脑的出价比联想低2.50美元，而且其产品素以稳定可靠著称。由于戴尔电脑运行稳定，中联部淘汰了大部分旧的联想机型，其中一些捐给了慈善事业。
联想的这次失利并不仅仅是失去了一份订单，而是凸显出这家中国最知名企业之一目前所面临的更深困境。最近几个月来，联想似乎显得茫然无措。全球对手正在联想长期以来统霸的地盘上节节进逼，而且正当其国内市场利润率不断下滑之际，它也错过了海外拓展的机会。
分析师和投资者的反应是十分严酷的。自6月1日联想发布截至3月31日季度业绩以来，其在香港市场的股票价格和美国存托凭证连连下挫，接近52周低点。香港股票上周五收盘价较6月1日股价下跌14%，而美国存托凭证则下跌17%。
身陷困境的联想是许多中国企业的一个缩影，它们一边要抵御外国对手对其市场占有率的侵蚀，一边还要努力成为国际化企业。过去十年中国市场的蓬勃兴起使这些企业迅速壮大，而如今随著竞争日趋激烈，它们开始屡屡受挫，一些企业在将国内成功的商业模式移植到海外市场时遇阻。此外，中国加入世界贸易组织(World Trade Organization)的承诺使国内外企业站到了同一条起跑线上，部分中国企业在本土市场的稳固地位渐渐丧失。
国有企业青岛海尔(Qingdao Haier Co.)去年的利润较前一年下滑7%，部分原因是受到外国竞争对手进军中国的影响。该公司生产的小冰箱在美国沃尔玛(Wal-Mart Stores Inc.)的店铺中非常畅销。
私营电信设备企业华为技术有限公司(Huawei Technologies Co.)正在大举支出。分析师及公司前管理人士称，华为在努力扩大产品范围，同时积极发动全球扩张攻势。它进军美国市场的步伐有所减缓，因为思科系统(Cisco Systems Inc.)指控华为侵犯了其互联网路由器的部分知识产权，而且美国方面也怀疑该公司与中国军方有关联。
纽约州立大学莱温国际关系和商务研究生院(Levin Graduate Institute of International Relations and Commerce)院长、前驻中国咨询顾问西蒙(Denis Fred Simon)说，全球市场越来越成为衡量中国企业成功的标尺。
在去年9月纽约北部举行的一个研讨会上，中国学者多次将联想、海尔和华为誉为中国企业成功的典范。但西蒙及其他美国学者认为，这些公司需要寻求一条不同的成长之道：加强内部管理、提高研发开支、更多关注业务的实际表现而不仅仅是迅速增长。
西蒙说，这是最基本的。如果这些企业无法抵御全球竞争的真正压力，它们就不能算是成功。
直到最近，联想似乎才刚刚准备要接受挑战。该公司雄霸国内三分之一的个人电脑市场，市场占有率比第二位的竞争对手高出一倍。它是由中国科学院(Chinese Academy of Sciences)分拆出来的首批高科技企业之一，因而拥有政府的支持，能够获得国有银行的贷款。上世纪90年代末，联想为中国人生产出了方便操作的电脑裸机，成功地击败了国外进口品的进攻，其中一个机型允许用户用单键即可接入互联网和载入浏览器。联想于两年前开始涉足手机生产，以期在一个有望成为收入新来源的快速增长的领域中打造自己的知名品牌。
在去年的采访和讲话中，联想首席执行长杨元庆和财务总监马雪征(Mary Ma)多次描绘出一个雄心勃勃的扩张计划：到2006年，海外销售占到公司销售额的三分之一以上，高于2003年不足2%的水平；2010年总体收入增长两倍多，达到100亿美元。
联想曾向意大利市场推出了两个机型的电脑，但因缺乏广告支持而遭遇惨败。此后，联想聘用国际管理顾问公司麦肯锡(McKinsey & Co.)和公关公司博雅公共关系公司(Burson-Marsteller)为其筹划在德国及欧洲其他市场的发展战略。业内管理人士和咨询顾问称，联想高层人员今年大部分时间都在探讨是否寻求海外拓展以及具体时机和实施策略的问题。
与此同时，联想在国内市场上的占有率开始下滑。进军手机行业并未给联想带来利润，部分原因是手机市场已被一些实力雄厚的国内和跨国企业捷足先登，而联想只是一个后来者。联想的核心业务──个人电脑呈现疲软态势。自2003年中期以来，虽然个人电脑市场每个季度在以18%甚至更高的速度增长，但联想的市场占有率却止步不前。据国际数据公司(International Data Corp., 简称IDC)提供的数据显示，今年第一季度联想的市场占有率从28%降至24%。今年2月份，通过把产品系列减半等措施，联想对业务进行了重组，把主要精力重新放在个人电脑上。
不过，杨元庆、马雪征以及联想的缔造者兼主席的柳传志之间对于公司战略存在分歧。管理人士和咨询人士表示，争论的核心在于联想应朝著纯粹的个人电脑制造商的方向发展，还是效仿索尼(Sony Corp., 又名：新力)、三星电子(Samsung Electronics Co.)等跨国企业涉足电子消费品产业，走多元化发展的道路。一位熟悉联想的IT咨询人士称，联想内部对于这个问题存在著严重的分歧。
联想拒绝让公司的高级管理人士对本文置评，但联想在一份声明中表示该公司的海外发展战略被人误解了。联想称，海外扩张仍然是公司的长期目标，但今明两年公司的发展重点在于拓展国内市场。即使这样，联想看起来还是希望在其他领域里有所作为。例如，本月早些时候，联想与CosmoCom Inc达成许可协议，将在中国生产、营销和销售销售预装CosmoCom呼叫中心软件程序的系统。CosmoCom的首席执行长阿里?索耐什(Ari Sonesh)称，除了个人电脑市场，联想还想在其他领域有所建树。
竞争对手抓住联想主营业务不够突出这个机会纷纷崛起，抢占其市场占有率。在诸多从中受益的企业中，最为知名的便是戴尔(Dell)。戴尔把在美国大获成功的直销理念引入中国，迅速地占领了市场。戴尔通过直销的方式把库存降至最低水平，根据用户需求利用分销渠道组装性能可靠、价格具有竞争力的电脑，并为客户提供快速配送服务。在中国厦门市的一个写字楼里面，约2,000名戴尔员工负责处理客户订单，大部分客户通过互联网发出订单。
在度过了艰难的开局阶段之后，戴尔2002年和2003年的中国市场发货量分别增长了71%和60%。2003年，戴尔中国业务的收入增长了38%，同时其业务从台式电脑和笔记本电脑扩张到了伺服器领域。戴尔自称已占据了中国伺服器市场的霸主地位。具有重要意义的是，戴尔的市场定位是瞄准那些高端客户的。戴尔称大中型企业现在占其中国客户总量的三分之二以上；大中型企业在联想的大客户群中所占的比率也超过三分之二。戴尔亚太地区主管比尔?阿梅利奥(Bill Amelio)称，戴尔的中国业务正在持续高速发展。
戴尔在中国市场上的成功标志著外国电脑企业打了一场漂亮的翻身仗。二十世纪90年代初期，外国电脑厂商在中国市场上占据著统治地位，但之后他们被中国同行甩到了后面，因为他们向客户出售的是过时的产品，没能针对电脑当时还算是新鲜事物的中国市场推出有针对性的产品。联想抓住了外国厂商决策失误的机遇迅速崛起。不过，外国电脑企业也从自己犯下的错误中汲取了教训。以惠普(Hewlett-Packard Co.)为例，惠普面向中国市场推出的新款个人电脑与全球几乎保持同步，对中国市场的重视使惠普的市场占有率节节攀升。戴尔位于厦门的工厂也向日本市场发货，因此戴尔在中国市场上推出的产品和全球市场处于相同的水准。凭藉其全球供应商网络，这些外国厂商在定价方面比联想具有优势。例如，花旗(Citigroup)旗下美邦(Smith Barney)驻香港的电脑业分析师杨应超(Kirk Yang)表示，戴尔的产品比联想同类产品的售价要便宜10%左右。
IDC的电脑销售及趋势分析师布莱恩?马(Bryan Ma)称，虽然这些外国电脑厂商在中国市场上的占有率普遍较小，但联想任凭其发展，早晚有一天会付出惨痛的代价。
联想在逆境中也意识到了自身的不足。作为重组计划的一部分，联想效仿戴尔加大了通过互联网进行直销的力度，并承诺提高库存管理的效率，以及重新吸引企业客户的注意力。与此同时，联想还准备用一些具有创新意义的手段来保持其中国市场的领先地位，并以此来把其产品同戴尔区分开来。联想的发言人表示，杨元庆认为联想应该走产品特色化的道路；除了应具备帮助消费者解决其问题的功能之外，联想的产品还应有便于使用、富于亲和力的特点。
联想新落成的设计中心将在产品朝著特色化方向迈进的过程中发挥核心作用。这个设计中心位于北京市北部郊区的联想企业园区内。数十名年龄在20岁到30岁之间的工程师发挥他们的聪明才智，为电脑和手机的设计献计献策。在设计中心下面的楼层中，实验室正在制作五颜六色、质地不同的塑料样品。联想的发言人称，据说只有联想和索尼拥有这类塑料样品实验室。
不过，联想的特色化努力似乎并不是针对企业客户，而是针对消费市场的，而消费市场的利润率已经很微薄了。联想表示，希望通过广泛的代理和零售渠道来销售其大部分产品。正是凭藉这些代理商和零售商，联想的产品范围分布之广才超过了其他竞争对手。但由于价格战愈演愈烈，使用这些网络将加重消费者的成本。与此同时，一些零售商抱怨联想为了实现其销售目标，要求他们提高电脑的采购量。这就迫使他们为了减轻库存压力采取削价促销的方法。已有一些零售商不堪忍受，转投到了戴尔的门下。
曾是联想电脑代理商的北京普天行科技有限公司(Beijing Toyou Technology Development Co., 以下简称：普天行)在北京东部人头攒动的百脑汇(BuyNow)电脑市场里面开了一家分店。该店店长赵忠表示，普天行曾是联想最大的销售代理之一。但残酷的价格压力让该公司不堪重负──每卖出一台价值1,500美元的电脑利润居然不到1美元。赵忠表示，这种利润率使得公司无法维持运营，最终，普天行只能放弃销售联想的产品。
现在，许多商店都销售戴尔的电脑，尽管戴尔从未宣称通过零售商来销售其产品。作为政府机构采购代理人的分销商以其客户的名义向戴尔发出超过实际数量的订单，然后把多余的部分卖给零售商。赵忠表示，由于能从戴尔那里拿到折扣，因此零售价不高，而且零售商还能从中赚取利润。赵忠把迈克尔?戴尔(Michael Dell)看作心目中的偶像。他表示，戴尔的直销模式没有任何风险。
