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Lenovo Case Study

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Introduction Lenovo was founded in 1984 as one of the institute-sponsored companies in Beijing. It started as the New Technology Development Company (NTD Co.) of the Institute of Computing Technology (ICT) of the Chinese Academy of Sciences (CAS) and considered a pioneer of Chinese market reform in the science and technology sectors. The company’s first technological innovation, a Chinese-language add-on card, was stemmed from ICT researcher Ni Guangnan. The name of the add-on card- Lianxiang- remains the Chinese name of Lenovo to this day. The company expands in Hong Kong that allowed them to raise its capital and overcome Lenovo’s previous experience in the global IT industry with a more international partner. In 1988, the company was restructured into Legend Computer Group Co. In the early 1990’s, the company was the largest among several domestic PC makers. In 1992, as the tariffs on imported PCs in China were reduced and import quotas were eliminated, foreign PC makers had a distinct price advantage over Legend. Consequently, Legend became sales and distributive representatives of American and Japanese computer companies in China. However, this became very strategic for Legend as it developed both technical and management expertise from its Hong Kong operation and from its foreign partners such as HP. Legend gain an advantage in building extensive distribution channels when the Chinese government restricted establishing distribution and retail operations of foreign companies in China. Legend introduced its self-branded PC in China that let it be the largest PC brand in China after a few short years. Legend put its most effort in building a nationwide distribution network. Over the next few years, Legend’s PC marketing business slowly overtook its add-on card business. However, its own brand still trailed foreign brands until 1996. Legend introduced the

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