Innovation key to Lenovo's branding success

By Mike Bastin (China Daily) Updated: 2014-06-17 07:03

Far more importantly, it also led to the ownership of possibly IBM's biggest PC brand, ThinkPad.

Despite minor takeovers and considerable care with the post-purchase integration of the IBM PC business, it was not until 2011 that Lenovo announced its next major cross-border acquisition.

In June 2011. Lenovo announced an agreement to buy Medion AG, an established German computer company, and with this takeover immediately strengthened its presence in the ultra-competitive European market. The deal valued Medion at $906 million, and it was easily Lenovo's most ambitious venture on the international acquisition trail since the IBM PC business takeover.

The deal took Lenovo's market share in Germany,

But crucially, Lenovo's brand-building did not appear to have grown with the addition of the German company's corporate brand only.

Distribution network and market share gains do not translate automatically into brand-building progress.

The next item on Lenovo's corporate shopping list followed fairly soon, with the takeover from Google Inc of the Motorola brand, announced publicly in January this year. This time Lenovo parted with almost $3 billion, but more importantly it took over ownership of Motorola's Moto X and Moto G brands.

This year has also witnessed Lenovo's planned purchase of IBM's low-end server business. A mere $2.3 billion is the agreed sum in this case. No doubt this latest deal will strengthen further Lenovo's already impressive global presence.

But once again there is no clear advance in Lenovo's brand-building hopes.

Indeed, it is the ThinkPad brand, an IBM brand innovation, that still stands out as Lenovo's "flagship" product/service brand.

It is pivotal to any global brand aspirations that Lenovo invest just as heavily in corporate brand takeovers with investment in product/service brand building. An excessive reliance on the Lenovo corporate brand will not only inhibit global brand achievement but will also stifle much-needed product brand innovation.

The limitations of corporate branding also explain the less than spectacular international brand-building progress of Lenovo's major Chinese competitors, Huawei and ZTE. Those limitations also affect much of Chinese industry.

Lenovo, and many of China's internationally acquisitive industry players, need to move quickly to demonstrate real brand-building progress with the establishment of a new, innovative product/service brand.

Then and only then can it be said that global brand-building at Lenovo has really begun.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.