Lenovo Ppt Final Com Stg


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  • Lenovo Ppt Final Com Stg

    1. 1. IBM and Lenovo New Leadership in Global PCs New advantages for all PC customers
    2. 2. Leading Products and Brands World Class Service & Support Global Reach New Growth Opportunities Scale IBM and Lenovo Enter into Long-term Strategic Alliance Create Powerful New Global Leader
    3. 3. The New Lenovo: Overview <ul><li>$13B sales (last 12 months) </li></ul><ul><li>19,000 employees </li></ul><ul><li>WW Headquarters: New York, USA </li></ul><ul><li>Principal operations: Raleigh, Beijing </li></ul><ul><li>Public company with ownership positions by Lenovo and IBM </li></ul><ul><li>Closing date: 2Q05 </li></ul><ul><li>Est. combined share data: 34% in China </li></ul>
    4. 4. Customer Value Continued IBM Sales Coverage Global Business Partner Network Ease of Doing Business IBM Financing Innovative Products / Broader Portfolio World Class Service and Support
    5. 5. Transaction Summary <ul><li>Lenovo acquires IBM PC operations </li></ul><ul><li>IBM: ownership stake, long-term alliances with the new Lenovo in sales, services and financing </li></ul>IBM IT Ownership Public Lenovo Holdings IBM 45% 19% 36% IBM Sales IBM Services IBM Financing The new Lenovo (Lenovo + IBM PC Business) “ Today’s announcement further strengthens IBM’s focus on the enterprise, while creating a new global business that is better positioned to capture the opportunities in the PC industry going forward.” – Sam Palmisano The new Lenovo Lenovo IBM
    6. 6. Lenovo Group LTD <ul><li>Founded 1984 </li></ul><ul><li>FY04: Revenue, $3B; Net Profit, $135M </li></ul><ul><li>Approx. 9,000 employees </li></ul><ul><li>#1 market share in China for seven years </li></ul><ul><li>(27% market share, source: IDC) </li></ul><ul><li>#1 PC company in Asia Pacific (excl. Japan) </li></ul><ul><li>#1 IT company in China </li></ul><ul><li>Small Business and Consumer market strength </li></ul><ul><li>Market capitalization: approx. $2.6B </li></ul><ul><li>Cell Phones </li></ul><ul><li>Mobile handsets </li></ul><ul><li>Home Products </li></ul><ul><li>Desktop PCs </li></ul><ul><li>Tianyi notebooks </li></ul><ul><li>Xuri notebooks </li></ul><ul><li>Inkjet printers </li></ul><ul><li>Commercial Products </li></ul><ul><li>Desktops </li></ul><ul><li>Soleil notebooks </li></ul><ul><li>Scanners </li></ul><ul><li>Laser printers </li></ul><ul><li>Servers </li></ul><ul><li>886 Servers </li></ul><ul><li>Creator of Deepcomp 6800 supercomputer </li></ul>
    7. 7. IBM Personal Computing Division <ul><li>Established in 1981, creator of personal computer </li></ul><ul><li>$9B 2003 revenue; 10,000 employees in PCD and supporting operations </li></ul><ul><li>#2 in WW commercial notebooks revenue </li></ul><ul><li>Undisputed leader in enterprise PC design, business productivity, and lowest total cost of ownership </li></ul><ul><li>Enterprise and Mid-market strength </li></ul><ul><li>(15% share total client) </li></ul><ul><li>Client, notebook and SMB double-digit growth, outpacing industry </li></ul><ul><li>ThinkPad notebooks have won over 1,000 industry awards </li></ul><ul><li>100-million PCs shipped </li></ul>
    8. 8. Global PCs: Where are the opportunities? IBM focuses on the Enterprise market. As a result, PCD revenue is weighted towards Large Enterprise/Mid-market customers. There is however, significant growth opportunity in the Small Business / Consumer market. PC market growth opportunity of $16B* from 2004 – 2006 led by SB / Consumer SB / Consumer Segment Revenue Mix LE / MM 57% LE / MM 29% SB / Consumer 43% SB / Consumer 71% 0% 20% 40% 60% 80% 100% Industry IBM LE / MM Source: IDC PC Tracker Source: International Planning & Research *Source: IDC PC Tracker
    9. 9. The New Lenovo: Leveraging strengths to pursue opportunities Segment Product Mix Geography Lenovo % of Revenue IBM % of Revenue SB / Consumer 43% LE / MM, 57% Lenovo % of Revenue AP 100% IBM % of Revenue AP 32% Americas 42% EMEA 26% Lenovo % of Revenue Notebook 18% Desktop 82% IBM % of Revenue Notebook 60% Desktop 40% Data Source: IDC PC Tracker / Internal sources LE / MM 17% 83% SB / Consumer
    10. 10. <ul><li>Top six emerging countries will represent 39% of the 2004 – 2006 growth opportunity* </li></ul><ul><li>IBM is performing well on the premium product segments in these countries with the proper sales and distribution channels to reach these markets </li></ul><ul><li>The new Lenovo will have a broader product portfolio to capture this opportunity </li></ul>Global PCs: Where are the opportunities? Source: International Planning & Research
    11. 11. A Perfect Fit between Complementary Organizations <ul><li>Premium Global PC Brand </li></ul><ul><ul><li>Most recognized technology brand globally </li></ul></ul><ul><li>Enterprise / Mid-Market Expertise </li></ul><ul><ul><li>Leader in business productivity and lowest total cost of ownership </li></ul></ul><ul><li>Notebook Leader </li></ul><ul><ul><li>Leading technology enhanced notebook product offering </li></ul></ul><ul><li>#1 IT Brand in China </li></ul><ul><ul><li>Most recognized technology </li></ul></ul><ul><ul><li>brand in China </li></ul></ul><ul><li>Consumer / Small Business Expertise </li></ul><ul><ul><li>Differentiated consumer/small business and extensive retail network </li></ul></ul><ul><li>Efficient Operational Platform </li></ul><ul><ul><li>Low cost infrastructure and manufacturing scale </li></ul></ul><ul><li>Global Sales, Financing, Fulfillment and Service Network </li></ul><ul><ul><li>Global sales network with financing, fulfillment and service support </li></ul></ul>
    12. 12. Lenovo’s Chairman Yang .. We at Lenovo understand that people are at the core of a successful company. .. Our two companies also share a common vision to create an undisputed global leader in the PC industry. .. we’re both fully committed to success – success on the international stage, and success through producing the best PCs in the world for both enterprises and consumers. .. welcome to our family. I’m honored that you will be joining us and I hope that we’ll get to know each other a lot better in the years to come. Yuanqing Yang
    13. 13. Customers Innovation Integrity Synergy in Values Dedication to every client’s success Innovation that matters – for our company and for the world Trust and personal responsibility in all relationships Serving customers Innovative and “can do” spirit Accuracy and truth-seeking Trustworthiness and integrity
    14. 14. The New Lenovo Announcement HR Transition Peter Haddad VP Human Resources, PSG
    15. 15. The New Lenovo Value Proposition <ul><ul><li>The new Lenovo will offer an exciting opportunity to participate in a new and expanding business venture </li></ul></ul><ul><ul><li>The new Lenovo will offer an attractive employment package </li></ul></ul><ul><ul><li>Lenovo and IBM are committed to make this a smooth transition that minimizes personal disruptions and loss of work productivity </li></ul></ul>The transaction is expected to be completed no later than the second quarter 2005, and requires the approval of Lenovo’s shareholders and review by relevant regulatory organizations. It is the intention of IBM and Lenovo to reach and sign local agreements after completion of additional legal requirements and industrial relations processes where applicable in some countries outside the United States.
    16. 16. IBM Employees Joining the new Lenovo <ul><li>Employees who are part of PCD and their primary work responsibility is in support of the PCD mission/business </li></ul><ul><li>Employees in other business units whose primary work responsibility is in support of the PCD mission/business </li></ul><ul><li>Additional employees deemed necessary to meet the new Lenovo’s requirements may be selected based upon business need and an assessment of their current job responsibilities </li></ul>
    17. 17. Attractive Employee Compensation & Benefit Package* <ul><li>The new Lenovo will provide total compensation and benefits that are comparable to IBM’s: </li></ul><ul><ul><ul><li>Cash Compensation </li></ul></ul></ul><ul><ul><ul><li>Same or Similar Job Responsibilities </li></ul></ul></ul><ul><ul><ul><li>Comprehensive Benefit Plans </li></ul></ul></ul><ul><ul><ul><li>Pension / Retirement Plan** </li></ul></ul></ul><ul><ul><ul><li>Vacation </li></ul></ul></ul><ul><ul><ul><li>* Certain countries, generally in EMEA, require that these compensation packages undergo further legal and industrial relations review before signing local agreements. Management plans to seek packages that are comparable in value to the package currently offered to employees in those countries in accordance with applicable laws. </li></ul></ul></ul><ul><ul><ul><li>**In Countries where these plans are offered today </li></ul></ul></ul>
    18. 18. Attractive Employee Compensation & Benefit Package* (continued) <ul><li>Employee Health Benefit Package </li></ul><ul><ul><li>Immediate access for employee & dependents – no exclusions </li></ul></ul><ul><ul><li>Pre-existing conditions are covered </li></ul></ul><ul><ul><li>Credit for current year plan deductibles </li></ul></ul><ul><li>Years of service credit for: </li></ul><ul><ul><li>The new Lenovo Vacation Plan will be based on combined IBM and Lenovo years of service and will provide the same benefits as the IBM plan guidelines </li></ul></ul><ul><ul><li>IBM accrued and unused vacation transfers with you according to country legal standards </li></ul></ul><ul><ul><li>Other selected benefit programs (varies by geography) </li></ul></ul>
    19. 19. US Benefits: the new Lenovo <ul><li>Pension Plans with comparable benefits and service credit for purposes of determining eligibility and vesting: </li></ul><ul><ul><li>IBM Personal Pension Plan (Prior DB Plan) – new Lenovo Pension Plan (DB) </li></ul></ul><ul><ul><li>IBM Personal Pension Account (Cash Balance) – new Lenovo Defined Contribution Plan </li></ul></ul><ul><ul><li>IBM Savings Plan – the new Lenovo 401(k) Plan </li></ul></ul><ul><li>Health benefits </li></ul><ul><ul><li>Continuous coverage </li></ul></ul><ul><ul><li>Medical </li></ul></ul><ul><ul><li>Dental </li></ul></ul><ul><li>Compensation </li></ul><ul><ul><li>Same base salary </li></ul></ul><ul><ul><li>Performance bonus targets maintained for one year </li></ul></ul><ul><ul><li>Similar incentive and sales commission plans </li></ul></ul><ul><li>Vacation – Same as IBM plan </li></ul><ul><li>More details about the new Lenovo benefits will be forthcoming </li></ul>
    20. 20. IBM / Lenovo Transition Schedule Employees join the new Lenovo and transition based on final country closing dates Proposed IBM/Lenovo transaction closing Second Quarter 2005 New Lenovo provides details of benefits offerings First Quarter 2005 In-scope certification process December 8, 2004 – January 7, 2005 Employee Department Meetings December 8 – 16, 2004 Management Briefings December 8 – 9, 2004 Employee Announcement Meeting - PCD Website published with new Lenovo specifics; to be updated regularly December 8, 2004 Note: Dates represent anticipated transition plan and may vary based on transition progress
    21. 21. HR Summary <ul><li>The new Lenovo will provide: </li></ul><ul><ul><li>Attractive Employment Package </li></ul></ul><ul><ul><ul><li>Competitive compensation </li></ul></ul></ul><ul><ul><ul><li>Continuity of benefits </li></ul></ul></ul><ul><ul><li>Smooth Employee Transition </li></ul></ul><ul><ul><li>Career Growth opportunities as we expand our markets </li></ul></ul><ul><ul><li>Recognition of innovation, performance and leadership </li></ul></ul><ul><ul><li>A chance to run our own show! </li></ul></ul>