“Manager Feng, it’s been a while since we sat down for a chat.” Liu Chuanzhi laughed.
Both men had been very busy over the past two years. Liu Chuanzhi was busy with expanding Lenovo towards the rest of the world. At the same time, Feng Yu had been busy with the financial crisis and investments after that.
“That’s right. It’s been a while since we chatted. I am impressed with Lenovo’s progress these two years. Lenovo is now China’s leader in the PC market. Your desktop and laptop had won those overseas brands. This is more successful than I expected.”
Feng Yu is not sure if it was his influence or whatever reasons, Lenovo is growing much faster than his previous life.
Of course, Liu Chuanzhi and the management of Lenovo play a big part in their success.
“This is all because of you. Our cost for the optical drive is the lowest in the world and can get the Microsoft operating system at such a low price. All the expectations set by you had been achieved, and our sales this year might increase by 30%!”
More people are using PCs, and some companies and government agencies are starting to switch to PCs for work. In China, the first choice is Lenovo’s PCs.
“This is terrific.” Feng Yu’s eyes sparkled. Lenovo’s success means the other PCs brands are suffering. But why is Liu Chuanzhi so confident? Is Lenovo going to introduce a more powerful model, or did he get a large order?
“Our sales should increase by more than 30%.” Liu Chuanzhi said and took a glance at Feng Yu.
Feng Yu was surprised as he felt Liu Chuanzhi seems to be blaming him.
“Huh? What happened?” Feng Yu asked.
“Did your company develop that new online game that is launched a few days ago?”
“Yes. It’s developed by my company. NetEase is in charge of this games’ China operations, and they had bought the servers from Lenovo.”
“I heard this game is fun, and many people are queuing up at the Internet cafes to play. But the internet cafes are packed, and some cafes started expanding. Some even open up new internet cafes as they felt the investment is low and can get fast returns.”
“This is good. These people will need more PCs, and it can increase our product sales.” Feng Yu smiled. Why is Liu Chuanzhi unhappy over this?
“We thought so at first. But a few Computer malls opened in various parts of China, and they focused on selling computer accessories, software, office equipment, etc. We supported these malls initially as these malls can boost our sales and provide a location for our after-sales services. But within these malls, there are a few shops that specialized in selling hardware, and they had become our biggest competitor!”
Feng Yu immediately understood what Liu Chuanzhi is talking about. He is facing competition from self-assembled PCs!
Self-assembled PC is referring to a customized PC. The customer will tell the shop owner the specs he wants for his PC, and the shop will calculate based on the parts.
Self-assembled PC is much cheaper because it does not include the brand value, and the parts are assembled based on user requirements.
The branded manufacturer’s biggest advantage is the after-sales services. Still, these shops provided their own warranty for the PCs they assembled.
Those internet cafes require dozens of PCs, and if they can save 500 RMB per PC, their total savings will be tens of thousands.
The amount saved is more than enough to pay for the café’s rent.
“I had told you before that self-assembled PCs will appear in the future. Now, you should know that branding can be both advantageous and disadvantageous.” Feng Yu laughed. “But who says Lenovo cannot do customized PCs?”
“Ah? Lenovo is going to sell customized PCs? Will this lower our brand value?” Liu Chuanzhi frowned.
“Absolutely not. In fact, we can even snatch the self-assembled PC businesses from those small shops. But we will only be doing bigger orders, and not assembling one or two units. Understand?”
Liu Chuanzhi understood what Feng Yu is talking about. Lenovo can use this strategy to get internet café businesses. Lenovo is currently Asia’s biggest PC manufacturer. Because of its scale, it can get hardware components from its supplier at the lowest rate. This will be their advantage over those small shops.
Also, Lenovo has retail shops in most counties in China, and have the advantage of their distribution channels. With their brand, Lenovo can snatch the orders from those small shops easily.
Lenovo is the leading wholesaler of PCs in China. Those governments and corporates had been buying PCs from them. But those companies they sold to do not have any requirements on the specs, and Lenovo overlooked this.
All Lenovo needs to do is to set its sights on the gaming industry, and change the CPU, Ram, graphic card, etc. to better ones, and they can sell to the internet cafes.
Lenovo can also start selling customized PCs, or they are already China’s biggest self-assembled PC manufacturers. They can also use Lenovo’s casing and monitors for these customized PCs and promote their brand at the same time.
Those players who couldn’t get enough of playing at Internet cafes will start thinking of buying a PC. At that time, the first brand that comes to their minds will be Lenovo.
Yes. We can introduce a series of a gaming desktop, and it should be popular.
“But those small shops will still take away some of our business.”
“Manager Liu, you are already getting the bigger slice of the cake, and you should leave some for others. If you really let them sell only PCs parts, how are they going to survive?” Feng Yu shook his head. If Lenovo even takes in the customized PC orders for a single PC, they will monopolize the whole of China’s PC market.
In Feng Yu’s previous life, once a company is about to monopolize the market, a competitor will appear out of nowhere, and this second company will get support from the government.
The Chinese government will not allow anyone to monopolize the market. Even the state-controlled industries like energy, finance, insurance, etc. have more than one state-owned enterprise.
“Alright. Then our desktop sales for this year might reach 40% if you can help.”
“What help do you need from me?” Feng Yu asked.
“For example, in your Legend of Mir game, can you add ‘Recommended to run on Lenovo PCs.’”
When did Old Liu learn about built-in ads?! Feng Yu also owns Lenovo’s shares, and it’s not a problem to give them a hand.
“Alright. Ask your Lenovo’s marketing team to contact Wind and Rain games and just give a token sum for the advertising fee. I will tell them to help you all include this built-in advertisement. Oh, what is the progress of our software?”
