Distribution network

Lenovo invested heavily in setting up and

maintaining network in China

Less fragmented
Act as Barrier for other companies

25% , 22% & 31% share in PC stores,
superstores & local dealers
In-House Manufacturing Specialization
3 manufacturing centers in China, 1 in India &
1 in Mexico
Benefit from access to reliable suppliers in
east coast industrial clusters
Business with Taiwanese companies
Vendor-Managed Inventory model

Labor
Low cost labors includes R&D engineers and
designers
Plans to build inland factories in response to
rising labor cost

Government Support
Earlier viewed as a foreign company
High tariffs on foreign-made PCs
Lenovos foundation under Chinese Academy
of Sciences
Joint venture in Hong Kong, to escape from
strict controls on resource allocation of
domestic nonstate firms

Tax Advantage
Tax benefit for being a leading Chinese
company & a high-technology innovator
Advance technology enterprises income tax
exemptions
Tax exemption policy for equipment import

Government Grants
2009: First major information contract from a
foreign government with Turkmenistan


863 Program
Chinas national level science and technology
investment program
Subsidies
Chinas rural computer subsidy program, 2009
as third round of the national rural home
appliances subsidy program