Strategic Management on Lenovo
Sequential learning in a Chinese spin-off: the case of Lenovo Group Limited
Wei Xie1 and Steven White2
School of Economics and Management, Tsinghua University, Beijing 100084, China xiew@em.tsinghua.edu.cn 2 INSEAD, France steven.white@insead.edu
1
This paper analyzes the learning process and sequential capabilities development in Lenovo, China’s most successful PC manufacturer, which originated as a spin-off from a governmentsupported research institute. The case study reveals this firm’s evolutionary, path-dependent and stage-wise progress from initial sales, distribution and service activities to manufacturing, product and process design and, finally developmental R&D. The study shows the interaction among the firm’s changing environment, its competitive strategy, and its set of resources and capabilities. The case has implications for research on such organizations, as well as implications for management.
Introduction
T
he objective of this paper is to shed light on spin-off development and evolution in the Chinese context through an in-depth study of Lenovo Group Limited,1 the leading computer manufacturer in China that originated as a spinoff from a government-funded research institute. The case provides a basis for conceptualising the process by which an institute spin-off evolved from distribution and service-based business activities to become a highly successful, verticallyintegrated firm manufacturing products based on its proprietary technology. We are specifically interested in understanding the evolving nature of learning by which the firm’s managers were able to realize such a transition, and the implications for both research and practice. China, like other countries, has been searching for ways to generate and demonstrate economic impact from government-funded R&D organizations and university laboratories. As evidence of
the efficacy of its policies, the government will point to several successful spin-offs, including Lenovo, Tsinghua
Wei Xie1 and Steven White2
School of Economics and Management, Tsinghua University, Beijing 100084, China xiew@em.tsinghua.edu.cn 2 INSEAD, France steven.white@insead.edu
1
This paper analyzes the learning process and sequential capabilities development in Lenovo, China’s most successful PC manufacturer, which originated as a spin-off from a governmentsupported research institute. The case study reveals this firm’s evolutionary, path-dependent and stage-wise progress from initial sales, distribution and service activities to manufacturing, product and process design and, finally developmental R&D. The study shows the interaction among the firm’s changing environment, its competitive strategy, and its set of resources and capabilities. The case has implications for research on such organizations, as well as implications for management.
Introduction
T
he objective of this paper is to shed light on spin-off development and evolution in the Chinese context through an in-depth study of Lenovo Group Limited,1 the leading computer manufacturer in China that originated as a spinoff from a government-funded research institute. The case provides a basis for conceptualising the process by which an institute spin-off evolved from distribution and service-based business activities to become a highly successful, verticallyintegrated firm manufacturing products based on its proprietary technology. We are specifically interested in understanding the evolving nature of learning by which the firm’s managers were able to realize such a transition, and the implications for both research and practice. China, like other countries, has been searching for ways to generate and demonstrate economic impact from government-funded R&D organizations and university laboratories. As evidence of
the efficacy of its policies, the government will point to several successful spin-offs, including Lenovo, Tsinghua
References: 420 R&D Management 34, 4, 2004 r Blackwell Publishing Ltd. 2004 Sequential learning in a Chinese spin-off r Blackwell Publishing Ltd. 2004 R&D Management 34, 4, 2004 422 R&D Management 34, 4, 2004 r Blackwell Publishing Ltd. 2004