"We would be lot more flexible and a lot more operationally efficient"

Vivek is responsible for driving a high performance and customer-focused
culture within Lenovo's sales and channel network. He hopes to blend the
strengths inherited from IBM in Lenovo and present the company as a flexible and
operationally efficient company in the channel. He clears any doubts or concerns
that customers have regarding this Chinese entity and its attempts to retain the
position of IBM in the country.

From the channel perspective, what is Lenovo's focus?

We want to ensure that profitability is addressed by seeing that channel
partners do profitable business with us. The second important thing is to help
these partners by bringing the relationship that we have with our customers to
them. By doing these two things, I am sure partners will bring in a good chunk
of business for Lenovo.

What is your response to the 10K PCs?

We at this point of time are waiting and watching this very carefully. We
will wait to see whether this addresses the computing needs of the customer in
an effective manner.

Does Lenovo plan to bring a similar low-cost box?

We would want to wait and watch and then take the right decision at the
right time.

All your products are on the Intel platform, whereas in China you have AMD
too?

We will keep evaluating all the options and do what is best for the market
and for us.

Which customer segment is Lenovo more focused on?

We are positioned to be the market leader and therefore we have a segmented
strategy for all the growth segments. Traditionally we have been strong on large
enterprises (LE) and mid-market and going ahead we want to become a strong
player in the home PC market also.

As part of IBM, we were strongly focused on large enterprises. We are
consciously focusing on the government and small offices now. We are also
looking at the consumer space. We are waiting for our consumer boxes to come so
that we step in that segment as well. In different vertical sectors, you will
find us playing very strongly in the SMB space. This space comes in through the
Express Business that we do.

What is the Express Business?

Express business is a business specially designed for small and
mid-enterprise. Products have features which are relevant to SMB, priced very
aggressively and available off-the-shelf. This is similar to out VFB (Very
Focused Business) initiative launched a few years ago. If our earlier
initiatives were covering 'X' number of cities, by putting more amount of
headcounts in that cities, we have strengthened that relationship and the belief
of IBM that the growth lays in those territories. So if you look at the
non-metro space, it is very important from our growth perspective.

Which customer segment is more profitable?

It is how you manage your portfolio, you cannot survive without the large
enterprise, and similarly you cannot survive without the other segments as well.
Profitability from the organization perspective is the best if you are able to
address all the segments. We will be getting in to the space, which our
competitors are ahead of us.

Have you laid out any strategy to address the consumer segment?

We already have the Think Worlds and Think Zones. We will go very strongly
in to this and it will be increased in the next couple of months. We want to do
business in the right way with the right channel partners.

Has Lenovo in its new form performed better than IBM in the past?

With the new organization getting formed, you will see that our operational
efficiencies would improve as we will primarily be a PC and laptop driven
organization. We will not have that huge range of products that was with IBM. So
you would see that we would be lot more flexible and a lot more operationally
efficient.

Market believes that Lenovo will bring down the cost of PC.

We are in the market to provide the most innovative product to customers at
the right prices. I am sure the market is seeing that and we are competing in
the market. It is not about generally dropping the prices and getting in to a
price war.

Many were skeptical about Lenovo maintaining the quality of Think brand.
Please comment.

There have been no concerns in the minds of our customers and partners. This
is evident from our interactions with them. From a quality focus point of view
nothing is changing. The announcement that Lenovo would acquire the PC business
of IBM was made on 2nd December. After that, we got in to JFM, 2005, where we
were adjudged by IDC as the #1 vendor in the laptop space. As far as technology
is concerned, IBM has two research labs to do all PC development work. One is
based out of Raleigh and the other in Japan, known as the Yamato lab. This is
where the first laptop was invented. Both labs have moved in to the new
organization with the complete manpower.

Third is support. For five years, depending on different time period of
warranties, IBM would continue to support all products through IBM Global
Services.

Fourth and most important point is that for the first time, IBM has allowed a
third party to use their logo, which I think is a very bold step for any
organization to do. This gives customers the comfort that, "Hey guys, this
box comes with the same set of standards that IBM used to have."

Two different companies with two different cultures have come together.
Was there any difficulty in adjusting to the new style of operations?

The primary interest of both organizations is the same - to provide high
customer satisfaction and to be the market leader. As long as this primary
objective is served, I don't think employees, partners or customers dealing with
this organization should have any issues. Earlier as an IBM employee and now a
Lenovo employee, I continue to strongly believe in high performance culture.

What is Lenovo's strategy to bring out its own brand in India?

Lenovo as a brand would address the gaps that are currently not being
addressed by the Think brands, for example-the consumer boxes.

How different is Lenovo's channel strategy or its style of operation from
that of IBM's?

A major chunk of Lenovo's business is through retail channels. We have close
to 4,000 retail shops in China. Some amount of business is direct.

As far as the style of operation in the present situation is concerned, the
new organization was set up and headquartered out of New York. All the senior
people in the new organization are IBMers.

All these set of people who are there in the top league of operation are
setting the style of operation and the trend of operations in this new
organization. We continue to see our presence in close to 170 countries across
the world.

With whom are channel partners more comfortable with - IBM or Lenovo?

Till date I have not see one channel partner whose business has gone down
after the merger. We maintain a very close relation with our channel partners.
The intent is to ensure that they deliver and earn.

What are key methods Lenovo uses to optimize costs in China?

Operational efficiencies and excellent supply chain management.

NELSON JOHNY