Editor’s note: Moving proven executives into key leadership positions in a major reorganization on Friday (see links with this post for WRAL TechWire’s coverage) underscores how Lenovo is gearing up to compete in 2016 – and the times aren’t easy ones in multiple Lenovo markets, says Technology Business Research analyst Jack Narcotta.

HAMPTON, N.H. – The executive reshuffling and business group reorganizations announced by Lenovo on March 18, 2016, are significant, but not unexpected; substantial, but not reckless.

The moves show Lenovo is reacting to difficult PC, enterprise and mobile market conditions and also clearly illustrate its plan to attack these markets. Installing in-house, veteran leadership in familiar roles ensures its brand strength and operating profits are not diluted as the company seeks to protect the bulk of its PC business and aggressively pursue market share and greater profits in mobile and data center markets.

  • PC & Smart Device Business Group

Renaming its PC segment into the PC & Smart Device Business Group, which now includes Android tablets and phablets previously included with the Mobile Business Group, better aligns its product portfolio to consumer markets, especially as tablets begin to take functionality and productivity cues from PCs. More importantly, expanding the role of Lenovo president and chief operating officer Gianfranco Lanci to include oversight of the PC & Smart group is a smart, calculated move.

As the former president and CEO of Acer, and more recently executive senior vice president of Lenovo’s PC business and Lenovo’s COO, Lanci’s aggressive, yet balanced, approach builds on Lenovo’s business culture touchstones of operating efficiency and rapid decision-making. Lanci’s strategy will allow it to attack growing segments such as detachable and 2-in-1 PCs without overextending itself and incurring operating losses.

  • Mobile Business Group

Appointing new leadership of the Mobile Business Group (MBG) in light of Rick Osterloh’s departure allows Lenovo to leverage the experience of veteran, knowledgeable executives to bolster growth initiatives for its organic product line as well as Motorola devices.

Lenovo China top executive Xudong Chen and Aymar de Lencquesaing, formerly the head of Lenovo’s North America operations, were named co-presidents of MBG. Lenovo will utilize Chen’s experience in building Lenovo’s successful China PC business to support efforts to become a market share leader in China as well as pursue greater operating profitability for MBG. de Lencquesaing’s experience across emerging and mature market segments will boost Lenovo’s ability to utilize Motorola’s intellectual property and relationships with operators to expand MBG’s reach into India, Europe and the United States.

  • Data Center Group

With the transition of Lenovo’s Enterprise Business Group into the Data Center Group (DCG), Lenovo is focusing Gerry Smith, formerly Chief Operating Officer of Lenovo’s PC and enterprise groups, specifically on the data center business. Smith brings long-standing experience at Lenovo optimizing supply chain and inventory management policies, as well as Lenovo’s service and support capabilities, which will support the DCG in its endeavor to shift from operating losses to operating profitability.

Meanwhile, Peter Hortensius’ shift from Lenovo’s global CTO to DCG’s CTO and head of strategy shows Lenovo’s dedication to accelerating innovation and differentiation in a quickly evolving data center market. Collectively, Smith’s and Hortensius’ years of experience at Lenovo provide an understanding of the company’s culture that will help Lenovo gauge potential effectiveness as it attacks growth segments within the market.

Lenovo’s restructuring of its data center business underscores the importance of innovation and optimization within that business on the company’s corporate direction and financials. Lenovo notes a desire to compete with greater agility, which TBR believes is important as customers migrate at an accelerating pace to next-generation data center architectures, and consequently as Lenovo navigates a quickly changing and increasingly competitive vendor landscape.

We believe Lenovo’s new structure will sharpen the DCG’s execution on evolving opportunities, particularly through direct accountability of key executives to Lenovo’s CEO.