China’s Legend

From Knowledge@Wharton comes a story on the globalisation efforts of China’s largest PC maker, Legend. It has a 27% market share locally, nearly thrice that of its nearest competitor, Founder. [About 10 million PCs were sold in 2002 in China.] How did it win?

Legend got to where it is today thanks to a uniquely Chinese combination of business excellence and aggressive protectionism. Speaking about the origins of the company in an interview with the McKinsey Quarterly in 2001, Liu Chuanzhi, Legends chairman, said that when China introduced its market reforms in 1984, he grew excited about setting up a computer company. Initially Legend was a distributor of foreign PCs; it started making and selling its own in 1990. As a distributor for Western brands, Legend discovered that the average Chinese couldnt use a Western computer because the software required sophisticated knowledge of English, Meyer says. People wanted turnkey systems, so Legend started making turnkey systems for different markets in China. And while emphasizing cost, their margins were pretty good.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.