Word: delle
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Dates: during 2000-2009
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Google realized while negotiating a deal with Dell that it needed to stretch its existing user base. That May agreement will put Google's toolbar on millions of Dell machines, and it prompted Google execs to seek other such alliances. Those partners "have a way of reaching customers that we do not on our own," Schmidt says, "and each represents a different strategic thrust...
...biggest obstacle for Lenovo's U.S. business is an inefficient supply chain. Order a computer from Dell in the U.S., and it usually arrives within 10 days. Order from Lenovo and it could come as quickly. Or you could go on vacation for a couple of weeks, and it may or may not be there when you return. "Outside of China, our supply chain is not world class," Amelio admits. To help fix the problem, he poached Dell's Gerry Smith to run supply-chain management--a Dell specialty...
Another problem: Lenovo doesn't have the financial muscle it needs to wage war with HP and Dell. In its past quarter, Lenovo earned only a $5 million net on revenues of $3.5 billion (after restructuring charges). Amelio has already cut 5% of the workforce and plans to slice $350 million from Lenovo's costs by early 2008, in part by consolidating operations, such as centralizing the global desktop team in China. The cost cuts "may be what I need to stay aggressive on pricing and not destroy my margins," he says...
Lenovo must win market share beyond China to boost profitability. It has only 7.7% of the global market, to Dell's 19.1%. The PC market is slowing too. IDC predicts that global PC-sales growth will dip to 10.8% this year, from 16% in 2005. Lenovo "will be treading water until the market goes into a growth mode," says Richard Shim, senior analyst...
Still, there may be opportunity. Dell is wounded, reeling from plummeting profits and a major laptop recall. Amelio's aggressive plan might be what Lenovo needs to become a global PC heavyweight. "Amelio is doing exactly what needs to be done," says Joseph Ho, an analyst at Daiwa Institute of Research in Hong Kong. And if Lenovo gets some breathing room, maybe He, the chief technology officer, can focus on learning how to tell a Tar Heel from a Blue Devil...