Can Shan Shan Become China'S "Itochu"?

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Introducing Itochu is Zheng Yonggang's strategic move to achieve the "100 billion strategy".

According to the "100 billion strategy", the market value of Shanshan Group in 2018 should exceed 100 billion yuan, which needs to break the normal rapid growth.

It is difficult for the company or Zheng Yonggang to accomplish such a breakthrough.

Itochu arrived at this stage.

Clayton, M. Christensen and Michael? E. Reiner co wrote the dilemma and way out, putting forward the three factor framework (RPV): resources, procedures and values.

Itou Tada seems to be able to connect with Shanshan in terms of three elements: to help and pform Shanshan in terms of resources and procedures, and to become a "tutor" of Shanshan in terms of values.

Can the Chinese fir really take advantage of itoin's breakthrough?

Three heavy ceilings of Chinese fir

Over the years, Zheng Yonggang and his Shanshan Group have maintained a high profile and aggressive attitude.

In 1990s, Shan Shan suit became the leader of the first Chinese suit brand in New China.

In 1999, under the leadership of Zheng Yonggang, Shan Shan carried out a channel revolution, stripped about 70% of the production capacity, instead of using outsourcing production, the 35 branches and 3600 salesmen of Shan Shan were totally disbanded and replaced by hundreds of franchisees. Since then, they have embarked on the road of "brand management". Since 2003, Shanshan has made a project report on the industrialization of lithium battery anode materials into a huge industry.

Later, fir was more and more difficult to relate to the suit brand. It invested in many fields such as financial equity, industrial parks, online games and so on, so that Zheng Yonggang had been very conceited in reviewing the past 20 years: "I have not made any wrong decisions, and my decisions are all right."

The marriage of Itou Tada and Zheng Yonggang showed humility which was inconsistent with his style.

First of all, the initiative to Itou Tada to Hydrangea, put forward the proposal of marriage; in the process of negotiations, in order to show the sincerity and common "big cake" determination of Shanshan, the price of the pfer price of Shanshan Group is evaluated according to the book net value, rather than the capital market customary market valuation, the amount of money spent by Ito is significantly reduced.

And after the success of the joint venture, Zheng Yonggang has repeatedly said publicly that "we are climbing high relatives".

Such a firm decision, such a favorable price, is so polite that it is because Zheng Yonggang has realized that introducing Itou Tada is an essential step to achieve self break.

There are figures.

In 2008, the turnover of Shanshan enterprise was 11 billion 800 million yuan, compared with the turnover of 11 billion 200 million yuan in 2007, only 5.3% increased.

And in 2007, Zheng Yonggang put forward the "100 billion strategy" in the company's internal meeting - the market value of enterprises in 2018 should exceed 100 billion scale.

The gap between reality and ideal is increasingly prominent.

Zheng Yonggang, who claimed to have never lost a battle, had to admit that "met the ceiling" and "needed to break through".

In Zheng Yonggang's view, there are at least three ceilings of fir.

First, the profit of the main garment industry is getting smaller and smaller. If we want to get greater development, we can only take the road of brand and continue to shift to the high end of the industrial chain.

However, it is hard to get to the top of the industrial chain? Shan Shan started to take the road of brand 10 years ago.

At present, more than 20 brands are operating, which are said to be profitable, but few brands are familiar to people.

Shanshan has experience in brand management, but it also faces difficulties in further breakthroughs.

Second, the production of lithium battery materials of Shan Shan has been the largest in the country, but production and technology are not outstanding internationally.

Zheng Yonggang predicted that the future will be the era of new energy. "Electric vehicles" are popular. Lithium batteries and related technologies will inevitably show the trend of nuclear fission.

Shan Shan has to seize the opportunity under such circumstances, no matter in terms of output or technology, it must go to a higher level.

Thirdly, the governance mode needs to be pformed.

Zheng Yonggang himself sighed, "we are working hard from an insolvent small factory and developing into today's multi brand cross domain large complex group.

Many of our businesses and entrepreneurs have a lot of personal influence.

I am not the chairman of the two listed companies in Shanshan, but when we make major decisions in the group, we will still whisper, what is the opinion of Zheng?

"Last year, the sales of Chinese fir enterprises reached 11 billion 800 million yuan, and the results were good.

For me, 11 billion 800 million yuan is a pparent ceiling! Relying on me alone to solve the internationalization of enterprises, to break through this invisible ceiling is no longer possible.

No one is perfect, and a good boss has an old day, a period of emotional repetition, and an aging structure of knowledge.

These are all Zheng Yonggang's worries.

The difficulties encountered by Shanshan are almost all Chinese entrepreneurs are facing.

This time, Zheng Yonggang, who always wanted to take a step forward, took advantage of external force to break through the three heavy ceilings and achieve breakthrough growth.

It is logical to marry Itou Chuya.

What does Itou Chuno bring?

In terms of resource support and management process, Itou Tada has a strong attraction for Shan Shan.

To acquire the resources of Itochu, in Itou Tadajun's two industries - Textile and lithium battery materials, he is good at dancing.

In the field of lithium battery materials, in 2008, the business income of Shanshan was close to 1 billion yuan, becoming the largest supplier of lithium battery materials in China.

What does Itou Chuno bring to the fir? ITO can help Shanshan in the production technology of lithium battery materials.

Zheng Yonggang said that Itou Tada's resources have been "used for my own".

In February 2009, almost at the same time as Shanshan and Itou Tada announced their strategic cooperation, Shanshan, Itou Tada and the world's largest producer of lithium battery materials, Tian Industrial Co., Ltd., "reached a basic cooperation agreement on the manufacture of cathode materials for lithium-ion batteries".

"Toda has the world's most advanced technology of lithium battery materials. We should not only be bigger, but also be strong and high-end."

Zheng Yonggang stressed that "if there is no itoin, this joint venture will not be possible."

The related announcement of Shanshan stock emphasizes Toda has "high-end technology". Shanshan has "excellent production facilities and customer base in China" while Itou Tada has "global market network".

In the textile industry, Itou Tada is currently the world's largest textile seller. In 2008 alone, sales of textile fiber business reached $11 billion 700 million, 7 times the sales volume of the whole Shanshan Group.

Just as Bai Yimin, who is well versed in the way of operation of the Japanese general trading company, said that a comprehensive business like Itou Tada seems to be low-key. Actually, he has a large number of international brand franchises or exclusive agents.

Chinese consumers familiar with CONVERSE (Converse), Lanvin (Bally) and so on are all Itou Tada's brands.

Before the joint venture, Shanshan and Itou Tada had been in the textile business for some years.

After 2000, Shanshan began to work closely with Itou Tada, and introduced 11 international brands including Marco, AI, Kark and Dunhill through Itou Tada.

The specific ways of cooperation are: Shanshan and Itou Tada and the three parties of the brand owners jointly invest in the establishment of a joint venture in China. The operation of the brand in China is made by a joint venture company, and the proceeds are divided according to equity ratio.

In general, the company has an absolute control position in the joint venture company; the second largest shareholder is the brand owner; Itou Tada is equivalent to an intermediary and has a smaller share in the joint venture company.

In the future, Shanshan will rely on Itochu to increase the intensity and scale of international brand introduction. "The past is a point to point cooperation, and the future will be face-to-face."

Zheng Yonggang explained.

Reference to Itou Tada's management of Itou Tada's advanced management mode is also urgently needed by Shan Shan.

Itochu's businesses connect all businesses through the global information system.

Its strategic principle is large group scale operations and small company management thinking. This approach helps to establish an enterprise system that can respond quickly and flexibly to the changing times.

In terms of product design, production, sales and brand management, Itou Tada spread them to different cooperative companies, such as a brand of clothing, bags, belts, cosmetics and so on, which will be produced separately in different professional companies.

Brand management is cut into many blocks like cakes, and sales companies are set up in the sales link to integrate brand sales.

The head office and the supply company communicate through annual meetings or marketing meetings to provide information on design and marketing, confirm product development routes, shop design styles and location selection, and maintain brand style.

In Itochu, every small company, every department and even every individual has strong independence, and every brand agent and supply company will get help from Itochu.

This is a large and small division of labor and cooperation management mode. It is like a large tree with many branches. Each branch has limited scope of contact, but every branch can directly connect with the market, thus forming a powerful force to promote the growth and expansion of big trees.

"We must graft some of their useful parts."

Zheng Yonggang emphasized that this is "grafting" rather than "pplantation".

Itochu has sent 4 people to Shanshan, who are the president, assistant president, chief operating officer and deputy CFO of Shanshan.

"Over the past year, the management level has been promoted quite obviously."

Zheng Yonggang said.

According to Zheng Yonggang, Itou Tada's management first changed the internal control system of Shan Shan.

The internal control work was officially launched in April 2009, and by the end of 2009, it has preliminarily completed several basic work such as the establishment of institutions, the formulation of the system, the organization training, the initial implementation and the evaluation.

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Can we build a comprehensive business with Chinese characteristics?

If "resources" and "program" are the "art" that Chinese fir tries to make a breakthrough, "values" can be regarded as "Tao".

At the level of "Tao", Zheng Yonggang also wanted to do well: to take Itou Tada as a teacher, to be a comprehensive business in China.

This is a new formulation.

China's business community is not familiar with the "integrated business" mode, and more is the European and American management model.

The integrated business community is a unique mode of Japanese and Korean enterprises, which is different from the organizational form of European and American company system.

It has been concluded that businesses from Ramen to rockets, from satellites to eggs, whether they are crops, mineral resources or consumer goods; whether they are raw materials, middleware or terminal goods, the comprehensive business community is widely involved.

However, a comprehensive trading company is by no means a "pluralistic group" usually understood.

Japan's comprehensive trading company was reorganized after World War II, and is a faithful executor of Japan's import and export strategy. It is responsible for importing materials needed by Japan, and exporting technology, equipment and capital at the same time.

The integrated business community from trade has strong intelligence network and division and cooperation ability.

After a certain degree of trade, the comprehensive business community began to participate in investment and establish various industrial companies, and through these networks to bring these affiliated companies and related enterprises to the front.

According to the Bai Yimin survey, taking Japan's largest comprehensive trading company, Mitsui products as an example, Baosteel's construction was the product line purchased by the new company, which is related to Mitsui, and Baosteel's product in China is also a product of cooperation with Mitsui.

Baosteel's iron ore raw materials are mostly owned by Japanese enterprises such as Mitsui, and many of these iron ore are pported to Shanghai by merchant ship Mitsui, a member of Mitsui.

On the whole, a comprehensive trading company is more like a huge trading company. The Japanese consortium is hiding behind it, such as Mitsui consortium and MITSUBISHI consortium.

Bai Yimin likened the Japanese consortium to a large family. The host bank of the Consortium (such as Sumitomo Mitsui bank and MITSUBISHI bank) played the role of the father, providing financial and capital support, and providing a stable economic backbone for the family.

The syndicate in the Consortium (such as Mitsui and MITSUBISHI) has played the role of a mother. It is responsible for giving birth to children (investing in many industries), planning for the growth of their children (getting information), and even engaging in marriage for their children.

Sons and daughters are numerous industries and companies under the business community.

Bai Yimin believes that the comprehensive business community is the core of the consortium, playing the role of "cross border industry organizer".

It has two key functions: first, to facilitate trade; the second is to gather intelligence, divide and cooperate, create new companies and enter new business areas on a global scale.

After decades of development after World War II, Japan's comprehensive business grew into a big Mac.

Mitsui products, Itou Tadamori and MITSUBISHI business ranked the top five hundred in the world.

Japan's comprehensive trading companies have been making frequent moves around the world, but remain mysterious and low-key.

According to Bai Yimin's survey, whether Brazil, Australia's mines, or Taiwan's Shinkansen manufacturing, whether LCD TV manufacturing or fashion brand management, are all covered by the Japanese comprehensive business network.

So, can Shan Shan become a comprehensive business similar to Mitsui and Itochu?

"We have to do a comprehensive business community and pure Japanese style comprehensive trading company is different from Chinese characteristics."

Zheng Yonggang said in an interview with this magazine.

He pointed out that the main differences between Shanshan's comprehensive trading company and Japanese general trading company are: first, Japan's comprehensive trading company "has no entity", "only investment, trade and various intermediary businesses", while Shanshan still operates two major "entity businesses" - clothing production and lithium battery production; secondly, behind the Japanese comprehensive business, there is bank support from the consortium, and Shan Shan does not have such direct banking support at present.

But he said: "Shanshan is not short of money, and the amount of credit is endless every year, and we are also seeking strategic cooperation with some domestic banks."

According to Zheng Yonggang's idea, the introduction of Itou Tada can bring rich resources to the fir industry in the aspects of textile and lithium battery materials, and inject fresh blood into the company's management mode. At the same time, Itou Tada can also become a "mentor" to pform Shanshan to a comprehensive business community.

According to Zheng Yonggang's vision, the future Shanshan type comprehensive commercial firm has strong industrial foundation, extensive trade network and diversified investment business.

However, "Tao" is not changed overnight.

There are only "office desks" and "people" in the pure Japanese comprehensive commercial office, the so-called "three wells of human beings" and "organized MITSUBISHI".

The core competitiveness of a comprehensive business community lies in those loyal, cooperative staff and strong intelligence gathering capabilities.

Zheng Hong, a partner in strategic planning, thinks that the whole management method of Itou Tadayuichi integrates the resources of the industrial chain around the needs of the target market so as to achieve division and cooperation.

Most of the Chinese clothing industry enterprises, the internal value chain of enterprises is difficult to cooperate, let alone industry chain synergy.

Moreover, because of the lack of relevant talents, this industry chain collaboration capability is hard to cultivate in the short term.

How to develop and cultivate similar soft power is a difficult problem for Shanshan to pform into a comprehensive business community.

Secondly, Japan's comprehensive business is like invisible mollusks, which is invisible and flexible to the world's industries.

In those days, the four way group also wanted to make use of cooperation with Mitsui products to make China's Japanese consortium model, but it was finally firmly controlled and abandoned by Mitsui.

Itoin's stake in Shanshan will give Zheng Yonggang a four way risk. In the face of this problem, he repeatedly said: "there is no risk in this joint venture."

Prior to the interview, Zheng Yonggang also said: "Itou Tada is just icing on the cake for me.

I hold absolutely one vote.

I will not let them control the company.

In Zheng Yonggang's view, what Shan Shan wants from Itou Tada is not money, but soft power.

The introduction of Shanshan is a strategic team, a series of high-tech equipment and distribution channels in 72 countries around the world, creating a Chinese type of business model, opening up the joints of the industrial chain, and becoming the organizers of the industry.

Can Zheng Yonggang really get what he wants?