In 1996, Lenovo Group - then known as Legend Group - changed the landscape of the burgeoning personal computer market on the mainland by beating foreign rivals to become the country's best-selling brand for the first time. Founder and then chief executive Liu Chuanzhi and his then vice-president, Yang Yuanqing, drew up a strategy to make the group a mover and a shaker in the industry. 'Instead of passively following the lead of foreign companies, we started to launch products at the same pace as they did,' Mr Yang said in 1997. 'While others were selling [computers based on the old Intel processor] 486s, we were already selling [new Intel] Pentium-based personal computers at even cheaper prices.' Roughly 13 years later, Mr Liu and Mr Yang are back in charge in a larger Lenovo organisation and hoping to recast the group's position in today's struggling global computer industry. But analysts forecast more pain ahead for Lenovo if its new leadership fails to execute as quickly, decisively and wisely as current market conditions warrant. Mr Yang took over as Lenovo's chief executive on Thursday after William Amelio resigned in the aftermath of the firm's first deficit in almost three years - a net loss of US$97 million for the quarter to December last year, a reversal from a net profit of US$172 million a year earlier. Mr Liu has replaced Mr Yang as chairman, a post the founder relinquished to serve as a non-executive director when Lenovo bought International Business Machines Corp's personal computer business in 2005. Their first order of business was to sharpen Lenovo's focus in its core domestic market while continuing to pursue opportunities in emerging markets overseas. 'The key for Lenovo to execute its new strategy is Mr Liu's return. He is a visionary [in the mainland information technology sector] and has a strong ability to manage people,' said JP Morgan analyst Charles Guo. 'During the acquisition of IBM's personal computer business, there was in-fighting for [executive] positions. Only Mr Liu was able to control those guys.' He said Mr Yang, as Lenovo's previous chairman, held back from showing his proven worth as a salesman and leader in executing corporate strategy. But Mr Guo said the unknown in the new management scenario was how long Mr Liu would continue to serve as the chairman. 'What we do know is that Mr Liu wants to shepherd the company at this critical time,' he said. 'We're seeing concerned Chinese corporate founders, including Hon Hai Group chairman Terry Guo Tai-ming, returning or becoming more active in the face of economic uncertainty.' Rob Enderle, the president of US technology consultancy Enderle Group, wrote in a blog post on Thursday the changes at Lenovo 'fixed the lack of clear leadership'. Mr Enderle wrote: 'Overall, the problem with Amelio's term was that he didn't really appear to be running all of the company any more than his predecessor [Steve Ward from IBM] was. That slowed execution and resulted in some counter-strategic decisions.' Richard Shim, an analyst at market research firm International Data Corp, said Lenovo's refocus on its home market might be a sign it wanted to sit on the sidelines to ride out the economic turmoil. 'If that is the case, we don't expect that wait to be for very long. Lenovo needs to make some tough, aggressive moves in the near term and expand its presence in the lower-price end of the market and extend its reach into other geographies,' Mr Shim said. 'The company has been attempting to cash in on its innovation by going after the premium end of the market, but the market is emphasising volume.' In response to market conditions, a major part of the new management's strategy was to expand Lenovo's distribution network while introducing new, low-cost versions of its main ThinkPad and consumer-targeted IdeaPad laptops, Mr Yang said. These comprise mini-notebook computers - commonly known as netbooks - which are designed as ultra-compact laptops with internet access and are now the best-selling machines in the depressed global computer market. Lenovo belatedly launched last year two netbook models: the S9 with an 8.9-inch display and S10 with a 10-inch screen. Daiwa Institute of Research analyst Joseph Ho said: 'Lenovo needs to grow volume sales in its most profitable market with low-cost products that are in demand in this slow economy, but it has a lot of catching up to do with netbook market leaders Acer and Asustek Computer.' Mr Enderle said Lenovo had the opportunity to make one of the first netbooks for the corporate market. Lenovo estimated that total industry sales of low-priced, entry-level products - including netbooks - would make up 66 per cent of the global personal computer market by 2012, up from 31 per cent last year.