Author丨Yang Qingqing
Editor: Luo Yifan
Source丨Visual China
After holding an online pledge conference for three consecutive years, this year's Lenovo Group's pledge conference finally shifted to offline.
"These are three years of unity and hard work, and these are also three years of overcoming difficulties and aiming high." On April 6, at the 2023/24 fiscal year pledge meeting, Lenovo Group Chairman and CEO Yang Yuanqing sighed.
In 2020, Lenovo Group held its first cloud pledge conference, when Yang Yuanqing pointed out that this was the moment when Lenovo Group turned crisis into opportunity. Immediately afterwards, Lenovo ushered in the explosive growth of smart devices, smart infrastructure, industry intelligence, etc. By capitalizing on the growth opportunities presented by the hybrid work model, Lenovo has significantly improved profitability and continued to drive technology-driven innovation and service-oriented transformation.
Judging from the three-year report card, Lenovo Group's performance is good. In 2022, Lenovo Group's turnover crossed the milestone of 460 billion yuan, an increase of 110 billion yuan from 350 billion three years ago, and its net profit almost tripled.
Supported by key strategic initiatives
Yang Yuanqing pointed out that behind the report card is the support of key strategic initiatives, first of all, transformation. In the past three years, Lenovo matched the new organizational structure and established the SSG Solution Service Business Group, achieving high growth and high profit margin growth. ISG's infrastructure solutions business not only turned a profit, but also grew into Lenovo's high-growth engine, becoming the world's third largest server vendor and the world's fifth largest storage device manufacturer, with strong and solid growth.
In IDG's Smart Devices Business Group, the mobile phone business increased its turnover by more than 50% last year compared to pre-pandemic levels, and also achieved a jump from turnaround to profitable growth. Other smart devices and digital space solutions also grew strongly.
It is also supported by such numbers that Lenovo's non-PC business achieved the milestone of exceeding 40% for the first time in the fourth quarter of last year, compared with 31% a year ago. "This also marks the milestone of Lenovo's service-oriented transformation." Yang Yuanqing pointed out.
At the same time, despite the recent turbulence in the PC market, Yang Yuanqing described PCSD's contribution to the group over the past three years as "indispensable". In addition, as the largest computing power infrastructure provider, Lenovo is also fully committed to promoting the landing and popularization of Puhui computing power. All businesses worked together to expand revenue in China to nearly 1.5 times pre-pandemic levels.
In addition to the all-out sprint transformation, Yang Yuanqing said that Lenovo Group's second key initiative is new IT. The so-called new IT is different from traditional IT, that is, information technology characterized by on-premises servers, data centers, and applications.
Yang Yuanqing pointed out that Lenovo has set a goal of doubling R&D investment in the medium term around the five key elements of "new IT" - "device-edge-cloud-network-intelligence". In the past three years, Lenovo has increased its recruitment of hardcore science and technology talents, adding a total of 8,800 R&D personnel, nearly doubling from the beginning of 2020.
The third key initiative is the "global resources, local delivery" model, which is intended to fully leverage global superior resources and maintain flexibility and agility close to the market. Among them, in the production and supply link, Lenovo makes full use of the global supply network and scale advantages to effectively cope with the supply shortage of the industry; Lenovo's extensive factories, logistics network and diversified manufacturing models ensure timely response to customer needs everywhere, even during the pandemic.
In terms of marketing, Lenovo leverages the brand equity it has built around the world and the Global Might Local Fight model to expand its presence and stimulate demand in every key market; In terms of service, Lenovo supports online services through artificial intelligence and knowledge graph technology on a global scale, while providing high-quality door-to-door service and spare parts replacement locally, and solving user problems on the spot.
In addition, another successful keyword for Lenovo is "the same association". "At present, customer needs tend to shift from simple product purchase to end-to-end overall solutions and services, so 'One Lenovo' allows us to integrate these disparate components into a complete solution with a unified channel and overall strategy, and better solve customer pain points and meet customer needs with the help of a global integrated information/trading platform and operation system." Yang Yuanqing said.
At the same time, Yang Yuanqing pointed out that "one association" is also an effective way to promote the better development of adjacent businesses, which can enable businesses to better rely on each other and closely collaborate, thereby promoting the effective development of adjacent businesses. New IT adjacent businesses have commonality and maturity in customer groups, underlying technologies, and operation processes, mature businesses provide soil for diversified businesses, and new businesses open more windows to reach and stick customers.
"In the past three years, we have not only had cross-business sales marketing services, but also adhered to the same vision and strategy, operated the same platform, practiced the same culture, and integrated Lenovo's business into various team actions." Yang Yuanqing pointed out.
New goals for the new fiscal year
In the new fiscal year, Yang Yuanqing pointed out that Lenovo Group will continue to unswervingly implement the 3S strategy, accelerate service-oriented transformation, fully promote technology-driven innovation, continue to build a diversified growth engine, and set five goals to this end.
Among them, the PC business continued to outperform market growth and industry-leading profitability, and resumed year-on-year growth in the second half of the 2023 calendar year. At the same time, the proportion of non-personal computer business turnover further increased, increasing by more than 2 percentage points.
In addition, Yang Yuanqing pointed out that MBG's turnover increased by 15% year-on-year in the new fiscal year, and SSG achieved 20% growth, and both businesses grew to a scale of US$8 billion; ISG continued to achieve rapid growth and continue to improve its profit level with a growth rate of more than 20 percentage points ahead of the market.
Yang Yuanqing also stressed that Lenovo Venture Capital should invest in more excellent technology companies and do a good job in Lenovo's technology watchtower.
Yang Yuanqing said that in the new year, under the guidance of the Zone to Win multi-domain win-win methodology, Lenovo will continue to build a diversified growth engine. Under the framework of multi-domain win-win, Lenovo will continue to make updates and adjustments according to the growth of its business to maintain a steady stream of vitality.
What is the source of this dynamic process? Yang Yuanqing's answer is innovation, "which is why we are committed to doubling R&D investment in the medium term around 'new IT'."
The high-tech industry has become too complex and fragmented from the earliest IBM integration model of software and hardware integration and superimposed applications to the differentiation model dominated by operating systems and chips. Users don't get a seamless experience across devices and ecosystems, and enterprise-level customers struggle to choose the infrastructure and solution that works best for them. The time for another integration may have come.
Does Lenovo have the right time and place to seize this opportunity? Yang Yuanqing gave an affirmative answer: "We are at the hub of hardware and software and the forefront of customer-facing. We also have successful experience and capabilities in vertical integration. Like the CSP cloud infrastructure business, we have greatly improved our competitiveness by converting from outsourcing to self-designed motherboards. By extending our vertical capabilities, we are able to 'down-integrate' from the complete machine to the motherboard to the key components. ”
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Editor of this issue Li Yutong Intern Li Ruiyan