Mainland technology giant Lenovo Group needs a radical rethink of its personal computer manufacturing strategy to keep up with more efficient rivals and grow amid the economic slump, analysts say.
The world's second-largest personal computer supplier has committed to refocus on the mainland and expand its portfolio of mini-notebooks, commonly known as netbooks, to meet increasing demand for these low-cost machines, while remaining steadfast to using its in-house manufacturing capabilities.
'Unfortunately, a change in that production strategy has not been addressed by Lenovo's management,' said JP Morgan analyst Charles Guo.
'The company wants to compete more aggressively in the low-cost netbook market segment, but it does not have the same low-cost operating structure as its competitors.'
Lenovo has been keen to establish an overseas manufacturing network to support its overseas expansion, according to Joseph Ho, an analyst at Daiwa Institute of Research.
It has invested more than US$30 million to build new manufacturing plants and order-fulfilment centres at Baddi in India and in Monterrey, Mexico, to support requirements in those geographic areas.