Business / Technology

Motorola drags down Lenovo brand

By MIKE BASTIN (China Daily) Updated: 2015-09-28 07:53

As part of the 2005 deal, Lenovo also acquired the rights to continue to use the IBM brand name for five years, but such was the consequential gain in confidence from the takeover that Lenovo soon began promoting its own corporate brand name and identity.

As a result, the company's corporate brand is now recognized globally and not at all tarnished with any negative Chinese associations.

This corporate brand strategy, where product brands such as ThinkPad continue to receive investment and promotion but only under the dominant lead of the corporate brand name, represents the key success factor behind Lenovo's incredible rise as a global PC producer.

Such a strategy also reveals why Lenovo is experiencing difficulties. Diversification into the smartphone business appears right now to have been a reckless maneuver, but many have pursued the same path and have prospered spectacularly, such as Apple.

It is, therefore, not the diversification into smartphones that lies behind the current corporate woes at the Beijing-based behemoth. Rather, it is the brand strategy that Lenovo has chosen to pursue in this eminently logical venture.

Lenovo spearheaded this venture last year with the acquisition of the Motorola Mobility corporate brand from Google for $12.5 billion. Once again, a huge outlay, but also once again a smart move into a highly competitive but growth industry.

But this is where the similarities with the 2005 IBM PC acquisition end. Motorola's brand image, in sharp contrast with IBM's, has not enjoyed positive association in recent years. IBM will perhaps always conjure up positive associations such is the history and once global hegemony. But Motorola's brand, despite rising to global prominence during the 1990s, bears no comparison.

Despite these clear corporate brand differences, Lenovo appear to have chosen to integrate the Motorola business and maintain a prominent Motorola brand identity alongside, if perhaps only slightly overshadowed by the Lenovo corporate brand. Such a strategy, where Lenovo and Motorola in effect combine to present a form of two-tier branding, regularly referred to in the academic world as "source branding", works well in the case of Lenovo-ThinkPad.

In that case, both brand names bring complementary associations to the market. ThinkPad's brand meaning can be described with "creativity" and "imagination", a perfect emotional association to match the Lenovo corporate brand's "trust" and "respect".

But such is the negativity associated with the Motorola corporate brand image that any tie-up with the Lenovo name faces a huge uphill challenge, perhaps an insurmountable one.

The absence of any powerful Motorola product brands prohibits an obvious alternative two-tier branding arrangement, too.

What appears to have evaporated at Lenovo is the ambitious, even audacious, corporate culture that led not only to the IBM takeover, but also the relatively rapid usurping of the IBM brand name and the emergence of the global rise of the Lenovo brand name.

Had such a corporate culture remained, and perhaps even flourished, then surely a similar removal of the Motorola brand name from any Lenovo corporate brand identity would have taken place by now.

Acquiring the Motorola Mobility brand business remains a smart move, but even smarter would have been the immediate public declaration that the acquired company's brand identity would form absolutely no part of the continued management and development of the overall Lenovo brand architecture.

A key part of Lenovo's turnaround strategy right now, therefore, is the elimination of the Motorola brand name from public view and a strong corporate brand strategy. Investment in the Lenovo brand name is the only way forward across all product lines unless takeovers involve suitably strong product, ThinkPad-like, brands, too.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.

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