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Lenovo Retrenches, But From What?

Lenovo has fired its American CEO, put a Chinese board member in charge, and plans to bring back a co-founder to help run the board and "refocus on China and other emerging markets." So what is it leaving behind?

The company burst into the consciousness of American business when it bought IBM's PC division a few years ago, primarily because it intended to repurpose the popular ThinkPad laptops (while IBM wanted to focus more so on its consulting and outsourcing practices). It took a while to replace the IBM logos with Lenovo on the devices, which got buried in a broad offering of PCs (named "So and so Centre," in an odd spelling for American customers).

While it made those marketing choices, it turns out the enterprise market evaporated almost as fast as consumer demand. Without the corporate salesforce and lacking the retail distribution of its competitors, Lenovo found its brand squeezed out of both marketplaces.

So, like I said, what is it leaving behind?

I'm not sure the Lenovo brand came to stand for much of anything. Its offering was (and is) absolutely credible, if not sometimes stellar (those laptops were always the first choice of true road warriors back when I called myself one). But beyond the sports sponsorship and viral marketing and whatever...well, what was the reason somebody needed a Lenovo product instead of any number of others that look the same, perform nearly identically, are priced within shooting range, and waste the same amount of marketing dollars on branding?

Unlike its enterprise and consumer competitors, Lenovo is a unique, global entity, with the potential to develop service offerings that go beyond the norm...couldn't sharing with household buyers in Des Moines the bootstrap know-how of its customers on the streets of Delhi be interesting, for instance? Could it find ways to add features (hardware, software, or services) that emerge from its business knowledge, and thereby find ways to differentiate itself?

If anything, this latest news of retrenchment is a tacit admission that all the blather about synergies and branding that get thrown around on the honeymoon end of corporate actions aren't usually too sustainable or defensible on the reality end. Does a retreat back to the Chinese market fix the problem?

Jonathan Salem Baskin writes the Dim Bulb blog and is the author of Branding Only Works On Cattle.