Lenovo eyes Australian retail, consumer sales

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Lenovo has outlined plans to move on the Australian retail market as part of its strategy around the US$1.75 billion takeover of IBM's personal computing division.

Lenovo has outlined plans to move on the Australian retail market as part of its strategy around the US$1.75 billion takeover of IBM's personal computing division.

Phil Cameron, channel manager at Lenovo, said the merged company planned to move back into retail in various countries, including Australia.

"It is our intention to be back in [retail]. The timing is still to be determined. We are just doing a whole lot of preparations at the moment," he said.

Cameron said detailed plans on Lenovo's overall and local sales strategy, including new channel initiatives and an altered partner program, would be worked out by around the last quarter of 2005.

"I would think probably at the start of the fourth quarter," he said.

The company planned a major product release in the fourth quarter that was likely to include many offerings brought across from Lenovo China or elsewhere, he said.

Resellers could look forward to a big marketing push starting around that time too, Cameron said.

Mark Enzweiler, the newly appointed vice-president of worldwide channel strategy and sales at Lenovo, has been visiting Australia this week as part of a global factfinding mission to help the vendor develop a new sales strategy.

Enzweiler said the biggest change would be a new focus on retail and consumer -- the lower end of the market in which Lenovo specialised. IBM had in recent years mainly focused on the enterprise, higher end of the business market, he pointed out.

While IBM Australia's personal computing division performed well and had not been "a problem child" for Lenovo, it was likely the division had more to learn from Lenovo than the other way around, he added.

"Lenovo in China has very innovative processes for tracking sales," Enzweiler said. "Every day, the resellers report their sales, every sale, every reseller, daily."

That tighter tie-in between vendor and reseller made for more efficiency and just-in-time responsiveness in inventory and delivery arrangements, he said.

"You know the exact amount of inventory that's been sold and what's in the channel," he said. "They go back to the distributor and say, 'here's what's been sold to the end-user now' and then they start to do their collaboration around inventory."

Meanwhile, Lenovo was working to ensure that the products brought across from Lenovo China or elsewhere would suit the needs of the market and the channel, and that took time to do properly, Enzweiler said.

Asked how Lenovo would compete with Dell here, Enzweiler claimed Lenovo was not concerned about its direct-selling rival.

"I don't think our strategy at Lenovo changes [in relation to Dell]. We know the competitors," he said. "Dell and Lenovo have different views."

Enzweiler said Lenovo would have "some direct business" but would model its Australian strategy more on that of Lenovo China, which had a "very successful", 90 percent channel sales focus.

Lenovo had some 4000 resellers and about 100 distributors in China, he added.

"We are going to be a channel business," Enzweiler said. "Lenovo has had huge success against Dell in China. We're going to take that best practice."

The Chinese vendor also would not compete with its partners on services, he promised.

"There's clarity on that. We're not going to go into that space and compete head on for services," Enzweiler said.

Lenovo inherited IBM’s PC business partners when it acquired IBM's personal computing division. The deal has made the Chinese vendor the world’s third-largest PC business.

Lenovo had no Australia-based staff in December when the deal was formally announced. Lenovo Australia is led by the IBM division boss Alan Munro. Enzweiler said Munro had done a great job cherry-picking executives for Lenovo Australia.

"I believe he has the right people in place here," Enzweiler added.

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