SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT

BBA 140: Business Environment

(Distance Students Only)
ASSIGNMENT
Date uploaded: 18TH February, 2020 Time 17:40 Hours
Due Date: 18TH March, 2020 Time 17:00 Hours

Case study of the development of Lenovo, the Chinese computer company.

Consider the following summary of its development and then answer the questions that
follow:
In 1984, 11 entrepreneurs had a vision to bring the advantages of information
technology to the Chinese people. With approximately US$25,000 to invest and the
determination to turn their research into successful products, this team opened their
business in a rented bungalow. Today it is one of the largest technology firms in the
world.

Its founder, Liu Chuanzhi, was determined and politically shrewd. Mr. Liu and his
colleagues had no experience of running a private company, no idea about modern
computers and a formal education that had been cut short by the Cultural Revolution.
As they built Lenovo, they had to teach not just themselves, but a generation of Chinese
bureaucrats how to run and regulate a private corporation.
Much of the credit for Lenovo's success is given to Mr. Liu, who pushed boundaries
while staying just the right side of the ideological line. The solutions found to the

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various problems of the company's development changed the way China does
business.

Mr. Liu launched incentive schemes and share options to motivate Lenovo's staff,
handing out suitcases of cash (and risking imprisonment to avoid the government's
300% tax on bonus payments). He applied pressure for employees to own their own
homes, a revolutionary initiative in 1992. Lenovo was the first Chinese company to
create advertisements that did more than just name a product and its price, so
introducing brand building to China. Though urged to develop a “Chinese chip” and
fight Western competitors on quality, Mr. Liu resisted. Seeing that Chinese science
lagged behind, he focused instead on cutting prices and copying Western technology
and sales methods.
Required
(a) List Lenovo’s internal strengths and weaknesses when it started its business
in 1984?
[10 Marks]
(b) How did the external environment impact on the decisions the company had
to make about the way it ran and expanded the business?
[10
Marks]
(c) What were the biggest challenges for Mr Wu in changing the Chinese
business model?
[10 Marks]
(d) What lessons about managing change can be drawn from this case study?
[10 Marks]
[TOTAL: 40 MARKS]
Submission Requirements
1. All work must be typed with font type Aerial 12, spacing 1.5
2. Maximum number of pages is FOUR (4) excluding the cover page.
3. All School of Business students indicate Attention: Mr. Mulusa Victor and
Schools of Law and Health Sciences Attention: Dr. Chibozu Mambo

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4. No assignment will be received and marked during residential school.
5. Observe the due date as late submission will attract penalties.
6. Submit Hard copies via EMS or any courier company to Room 24 at Pioneer
campus

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