Chinese Enterprises: Embarrassing Scale Game

In 2012, Li Xinghao, chairman of the board of directors of CHIGO group, continued to say that CHIGO would no longer pursue the expansion of volume, instead of trying to increase the added value of products.

More and more enterprises realize that scale effect is more and more difficult to adapt to the survival needs of Chinese enterprises. Chinese enterprises urgently need to adjust their development strategies from "quantity era" to "quality era".

In fact, the one-sided pursuit of the concept of scale and quantity has had a bad and far-reaching impact on Chinese enterprises. China has not yet produced a true scale leading enterprise, and the excessive pursuit of scale leading has restricted the development of Chinese enterprises. In other words, one-sided pursuit of scale success can neither achieve technological progress nor achieve scale leadership.

But this seemingly simple reason is not all Chinese business owners understand.

TCL boss Li Dongsheng is one example. He admired that "bigger is not always stronger than done", but TCL is neither bigger nor stronger. In 2003, the size of TCL's enterprise was about 55 billion yuan. By 2010, it was still the same scale. This means that TCL took 7 years to go back to the origin. And the younger brother of the year had already run far ahead, and even GREE, who had insisted on taking the professional road, had achieved 80 billion yuan.

Least care about business scale The example is apple. Jobs never made any "5 year plan" for apple, nor did he see the top 500 in the world. For Jobs and apple, everything is not as important as developing a revolutionary product of the world. The fact is that in 2011, apple became the largest business in the world with a market value of more than 400 billion dollars, earning more than 10 billion dollars in that year. In the first quarter of 2012 (September 25, 2011 to December 31st), Apple's operating income reached 46 billion 330 million US dollars, an increase of 73.3% over the same period last year, and net profit reached US $13 billion 64 million, an increase of 118% over the same period last year.

It is ironic that enterprises do not care about the scale of the scale, but the companies that are worried about it every day are hesitating.

Why is China always born without a genuine international brand? Why can't we see the Chinese enterprises in many innovative fields? Why did we shout many years ago that China has become the "global manufacturing center for home appliances" but has not yet been born with "China's Samsung"?

Behind the hustle and bustle, the embarrassment of Chinese enterprises can not be hidden.

All of this is closely related to the impetuous and short-sighted mentality of Chinese enterprises.

Chinese enterprises generally give people a sense of lack of soul and short sightedness, and often fail to judge the direction of industrial development. They like to swing around and follow the trend of Shanzhai. They like to pursue immediate interests and rarely plan for future 5 or 10 years of development. Therefore, most of them look like trees planted just now, and their foundation is simple.

So, what is the soul of an enterprise?

In my opinion, the soul of an enterprise is an unswerving proposition of an enterprise, that is, the distinctive personality and unique positioning of an enterprise, that is, the irreplaceable differentiation advantage of an enterprise. Taking apple as an example, let's look at what Jobs did during his lifetime. He worked with R & D designers every day, demonstrating products, planning products and developing products for more than ten years. It's hard for us to imagine a boss who stroll through the flash to talk about success. His company will be competitive. Therefore, Apple's other founder Wozniak said: Apple's advantages can not be duplicated. In my view, the advantage that can not be duplicated is the real advantage.

Chinese business owners are not. They are naturally not interested in products, though the reason for them to survive is to make products. But for most Chinese bosses, their interest lies in marketing, which is to sell products in a variety of tricks, no matter how competitive the product itself is. This is related to the concept of Chinese bosses. Their logic is that China is a low-end market, and low-end consumers do not care about quality and price.

They do not realize that this is an old judgement. Nowadays, the demand of Chinese consumers for high-end products is growing. An interesting fact is that in 2011, the average growth rate of China's automobile market was less than 5%, for the first time, it was lower than the average value of 20% for many years, while the growth rate of high-end cars such as BMW, Mercedes Benz and Audi was generally over 30%. Local cars are becoming less attractive. In fact, China has become the world's second largest consumer of luxury goods.

Plagiarism and Shanzhai are going to the end of the road.

The pursuit of scale is closely related to the vanity of Chinese bosses who want to save face and ostentation. They are ostentatious and beautiful. Li Dongsheng's famous saying that "bigger is not necessarily stronger, and that it is not always done" is reflected in the logic of "first and then stronger." In fact, there is no causal relationship between DA and Qiang. Unfortunately, this concept still has a lot of market, and it can be seen from many enterprises' admiration for the top 500.

One question forces us to think: what is the most lacking in Chinese enterprises compared with international enterprises?

In my opinion, what Chinese enterprises lack most is the peace of mind and the foresight of sustainable development based on the enterprise. Chinese entrepreneurs are generally filled with impetuous emotions, and they are unwilling to settle down and do things steadfastly. Because impetuosity, they are always eager to do anything to get instant results. The seeds planted today will grow into towering trees tomorrow. The immediate interests and visible interests will always dominate the behavior of Chinese entrepreneurs. Why do Chinese enterprises always remain passive in the face of new technologies and new products? And take the color TV industry as an example. Over the years, Chinese color TV enterprises still play the role of "followers" of foreign brands. So far, no brand has been produced in the international market, and its profitability is low, and what products to do depends on the faces of others. Look at 3D TV, smart TV, and the upcoming OLED TV, which is invented by Chinese enterprises.

However, Chinese entrepreneurs are unwilling to admit the fact that they are backward. They will say, "our products are already at the same starting line with foreign brands." However, comparing the "made in China" with foreign brands, it is easy to see that a prominent feature of Chinese products is that Technical content Lack of industrial design is too old to mention fine technology, and some products even endanger consumers' health and safety. I think this is why the German government called on consumers to carefully buy Chinese products.

Now, we all take delight in the miracle created by apple, and wonder how many people like apple products. But how many people have wondered how long Apple has been developing iPhone and iPad? The answer is "7 years". In the first few years of Jobs's return to apple, Apple has basically seen little progress. Building the foundation for Apple Empire and building research and development system became Jobs's first priority. In the past few years, Chinese enterprises have seen Samsung develop rapidly, and have proposed to make "China's Samsung". But how many companies really understand the essence of Samsung? I don't think so. Now, seeing that apple is in the ascendant, and a city proposes to train "100 Jobs", I think this is simply a ridiculous thing. We must know that Jobs is not cultivated, there is no loose and free market economy environment, and the political environment of democracy and rule of law. Jobs can not be born out of the world.

What is lacking in what is needed? China wants to have a batch of products in the next 10 years. Creative ability The enterprise must start from now on the research and development system structure and brand building. To start with it, China must start from now on, starting with education reform, and strive to cultivate a number of high-quality citizens with innovative consciousness and innovative ability. Leaving these prerequisites and talking about transcendence is of no significance.

In my opinion, big and not strong and shameful, small and brilliant. When the national strategy has changed from "fast and good" to "good and fast", Chinese entrepreneurs have no reason not to re-examine the untimely development concept.

The future world is bound to be the world of product competitiveness rather than the world of price competition, whose products are different and whose products can satisfy consumers' needs for the first time. It is impossible to create a market miracle with cheap and low quality. If there are still enterprises that see the changing market with untimely eyes, such enterprises will be abandoned by the times.

In fact, excessive pursuit of cheap and low-quality products, from the product life cycle and consumer experience, is a waste of social resources, pollution to the environment, and the proliferation of low-quality and high consumption products has restricted China's sustainable development.

In the second half of 2011, the United States, as a major household appliance industry in China, has already made strategic adjustments, and the "scale first" business strategy will be gone forever. We believe that more and more Chinese entrepreneurs with a forward-looking outlook will abandon the pursuit of scale over the years and strive to build the core competitiveness of enterprises. This is the beginning of a new era for Chinese enterprises.