Shi Yuzhu Talks About Entrepreneurship: Blind Diversification Is Inevitable.

In May 18, 1995, the giant group also used a full page in hundreds of newspapers across the country.

At the beginning of 1996, Shi Yuzhu launched the slogan of "no big battle". The slogan of "asking the people to testify" once again raised the frenzy of selling health products in the whole country again.

Such a crazy diversification trend also indicates the future defeat.

At that time, I had a fever and had done more than a dozen industries.

For example, when we did brain gold, giant calcium, medicine for heart disease, our old line -- software, computer hardware.

Pyramid schemes were not illegal at the time, and a pyramid selling department was set up to study pyramid schemes.

(pyramid scheme) teams have just been trained well, and the country has started to say that pyramid schemes are illegal, and the last batch of people disbanded.

At that time, even a clothing department was set up.

At that time, Shi Yuzhu was like Icarus, a teenager in ancient Greek Mythology (Lcarus).

Icarus's father, De De Les (Daedalus), is a skilled craftsman, making use of candles on the island to make two delicate wings, one for himself and one for Icarus, hoping to escape from the fate of captivity.

Before take-off, his father warned him that his wings were wax and would melt when he was hot, so he must not fly high and avoid the sun.

Icarus fully understood his father's exhortation, but after taking off, his heart was immediately occupied by curiosity and ecstasy, and his father's warning was forgotten, so he flew higher and higher.

At last, he felt that the wings seemed to melt like drops of tears into drops and drops of liquid, scattering away in the sunlight.

Icarus also fell into the sea like a spray rock.

Before 1997, Duan Yongping, the boss of BBK electronics, gave Shi Yuzhu advice: doing business is like a high diving, and the less you move, the safer you are.

However, at that time, Shi Yuzhu was in the process of diversifying. It was difficult to understand the meaning of Duan Yongping's words. But after a fall, Shi Yuzhu suddenly felt that he had understood it.

In China, diversified enterprises, apart from Fosun, do not succeed in many ways, making diversification one hundred percent failure.

The biggest challenge for Chinese entrepreneurs 10 years ago is to seize opportunities and seize opportunities.

With the further standardization of the economic legal system in the past 10 years, all industries have entered the white hot competition, so the biggest challenge for entrepreneurs now is whether they can resist temptation.

In the past, competition was not fierce in all industries, you didn't understand anything, but as long as you went in, others did not enter, you could easily earn money.

The competition is fierce now.

Shi Yuzhu thought it was the so-called "pluralistic experience" for violating economic laws at that time.

For example, giant Dhankar, at that time, the giant Dhankar really did a good job, did a good job, had a large sales volume, and a considerable profit, and was already a leader in the same industry.

But soon we thought we could do anything, so we went to build a house, take medicine, and get health care products.

Health product brain gold is still successful, but once the success of brain gold, we made 12 health care products at once.

Then the software made a lot of clothes and made a lot of clothes.

At the same time with Shi Yuzhu, the same is the health care industry, the same rapid rise of the sun god, also because it did not resist temptation, diversified expansion and collapse quickly.

At the end of 1987, the predecessor of the sun god, Huang Jiang health care product factory, was listed in Dongguan, Guangdong.

In early 1988, Huai Han, the holder of biotech, resigned from public office and invested in "bio health". In August, the factory name, trade name and trademark of Huang Jiang Chang were changed to "APOLLO", and sales revenue was 7 million 500 thousand yuan in that year.

In 1990, sales jumped to 2 yuan and 400 million yuan.

Guangzhou sun god company's strategy has always been "vertical development oriented, horizontal development as a supplement", that is, the development of health products and diversified development.

But since 1993, sun has changed its original strategy to "vertical development and horizontal development go hand in hand." in the past year, 20 projects, including oil, real estate, cosmetics, computers, hotels and so on, have been set up in Xinjiang, Yunnan, Guangdong and Shandong.

In just two years, the sun god pferred to these projects funds up to 3 yuan 400 million yuan.

However, none of these projects has become a new "Sun God", and 3 yuan or 400 million yuan is lost.

When completing the early accumulation and entering sustainable development, its managers thought that where the profits were high and blindly entered any field, and finally made the sun god fall into the trap of diversified expansion.

By 1997, the sun god had lost 1 yuan to 5 billion 900 million yuan a year, and eventually Hongkong's stock price dropped from 2 HK $2 to HK $9 in 1996.

The failure of the Zhuhai giants and all the companies that have diversified and failed have given Shi Yuzhu a warning that blind diversification is bound to hurt badly.

Shi Yuzhu later reflected:

The biggest challenge faced by Chinese private enterprises is not to find opportunities, but rather the knowledge of leaders, the energy of teams and the financial resources of enterprises.

Now the competition in all fields is all white hot. Only when the enterprise concentrates its energy and forms its core competitiveness can it become a foothold, otherwise it will be finished overnight.