Three Ask Haier To Build A World Brand

Haier is able to seize opportunities and keep pace with the times.

In 1980s, the initial stage of reform and opening up was the seller's market. Enterprises imported advanced equipment from abroad, and the supply of products was in short supply.

But the Price Bureau stipulates that the refrigerator can't rise in price. By invoice, a ticket can be sold to more than 1000 yuan, which leads to many.

This is a very good time for mergers. In 90s, Haier merged many factories.

At that time, we were opposed by our colleagues, saying that we should not take the road of diversification and specialization.

In fact, it is not about diversification or specialization, but the key is how to do it and how to innovate? Because there are also some other mergers and acquisitions factories that finally failed to do so, but at the same time, it was against mergers and then began to diversify.

Joining WTO is the opportunity to go out, but this road is very difficult, because foreign R & D expenses and marketing expenses are very heavy.

Haier has an advertisement in Ginza, Japan, which is the only advertisement for Chinese enterprises.

At the beginning, our sales in Japan did not pay enough for its annual cost.

But we must stick to the end.

According to the data of ten years of world-renowned research companies, Haier is now the first brand of white goods in the world.

Over the past two years, business revenue growth has been relatively slow, so we have made reengineering and profit margins.

But what is more important than profit is cash flow. It is the air of enterprises, which is reflected in receivables and inventory.

If we do not get back to bad debts and stock products, we will have the working capital turnover days.

I think the best thing to do is DELL. The best time is more than 30 days and Haier is ten days.

However, many enterprises in China are positive, with difficulty in capital turnover and loans from banks.

Why is Haier?

Why should we seize the opportunities of the times and innovate continuously? Outside, because the environment is constantly changing, and inside, because the enterprises in the existing system are bigger, they will suffer from big business diseases.

The environment of the times has changed so much that enterprises can not keep up with them.

Kodak used to be the leader of the film industry, but in the digital age, it can only give way.

NOKIA in mobile phone industry is much larger than apple, but Apple's profit and reputation are the first.

Because NOKIA is just a communication tool, and apple has become the terminal of the Internet.

Keep up with the development of this era, will become the darling of this era.

Obviously, in the Internet era, user centered is the first priority, which leads to the individuation of demand. Enterprises will turn from mass manufacturing in the past to mass customization, and the challenges of management will follow.

Chinese enterprises have no enterprise management before the reform and opening up. After the reform and opening up, there are business management, but without their own management theory, they basically learn from the West.

But in the Internet age, we don't know what to learn, because the management theory in the Internet era is not yet.

This is both a challenge and an opportunity, because both Chinese and foreign enterprises are on the same starting line.

Haier has annexed SANYO refrigerator. I feel that Japanese companies have a very good team spirit.

A R & D team of SANYO refrigerator has developed a product that has achieved excellent results both in the international market and in the Chinese market.

I said I would reward the team alone, but they didn't want to. They said: in the R & D center, whoever comes out to organize will get the results out, so the reward should be shared by the R & D center.

If it is China's team, it must be too small.

When Chinese enterprises become bigger, this game will be very obvious. They will try every means to exploit loopholes. Everyone wants to maximize their own interests, and the maximization of their own interests does not necessarily coincided with the maximization of the interests of enterprises.

As a result, a lot of enterprises will be a little bit bigger, and they will be full of loopholes, mutual wrangling and mutual shuffling.

In the Internet era, the demand of users is faster and faster, which is a great challenge for Chinese enterprises.

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In October 2010, Mike Porter and I discussed this problem. He said, "I think Haier's strategy is right. I am not worried about the development of Haier, but I am very worried about whether innovation can succeed in the great environment of China."

There is also a question of integrity in China's entire market. If it is not done well, honesty may become a fatal problem that stifle the development of China's market economy.

What does Haier do?

From the inside, we must make innovations in business mode. From the outside, we should be a global market.

What are we going to do with so many contradictions and problems? What Haier is doing now is what we have been pursuing all these years, that is, to form our own business mode -- how to meet the needs of users at the fastest speed in the first time and how to achieve the integration of virtual and real networks?

Virtual network is the Internet, Internet users have needs, we use the real network to meet.

The real network is Haier's stores all over the country. It has been infiltrated from cities to counties, townships and villages, and has been realized through marketing network, after sale service network and logistics distribution network.

Many foreign brands have been hard to succeed in China for several years, and now they simply sell products to Haier for sale.

GE's white electricity is entrusted to us completely, and we are responsible for product sales and service.

The Acer computer's rural market is also made by Haier.

This gives Haier the opportunity to exchange resources: we sell their products in China, and they sell Haier products on their networks abroad.

Win-win.

This change has brought about changes in the organizational structure of enterprises, which we call the inverted triangle.

The so-called inverted triangle is that employees become the top level, employees understand and meet the needs of users at the first time, every front line employee is the first information center, and leaders at all levels become employees' supporters.

Just like the American enterprise scholar Chandler said that the two variables of an enterprise, one is the enterprise strategy and the other is the enterprise organizational structure, but between the two, the enterprise strategy decides the organizational structure, the organizational structure must obey the strategy, and change the past positive triangle into the present three corners, which is consistent with the strategic structural adjustment.

From the top users to the various echelons, it becomes a self-management team and can innovate according to the market it faces.

To do this, there must be a mechanism to protect and solve the problem of motivation.

Each autonomous entity has a profit and loss account, minus the cost of income, and the rest is profit.

What an enterprise gives employees is cost. You must use it to create new value. If you can not create new value, you will lose money.

Enterprises can not calculate the general ledger in advance, and should be divided into everyone in advance.

Management is borrowing power. The assets in the enterprise's liability sheet can not increase in value, and the enthusiasm of the enterprise can be mobilized and the whole enterprise will increase in value.

If we classify the global enterprises: one is the world class brand, the other is the world class brand.

China is a big manufacturing country and not yet a big innovation country.

China's white goods account for 40.5% of the world's output, but only 2.9% of its brand products are overseas.

We can't just do the foundry for foreign brands, we must make real brands.

Haier is using the Internet age at the fastest speed abroad.

In April 2010, I found many famous world-class brands in Europe not paying much attention to the Internet, but sales on the Internet grew very fast.

Many people do not shop on the Internet for physical stores. If they win trust on the Internet, they can do better.

As a result, we speeded up our work on overseas websites, advertising through Facebook websites and so on.

There is a book called Facebook effect, which says Facebook will soon outpace Google because Google meets demand and Facebook creates demand.

If you can provide a better way to share information, you will change people's lives.