How Does Lining Resolve The Crisis And Find A Way Out When The Olympic Season Comes?

It has not yet slowed down from the miserable performance of a net profit of 6.

The company is caught up in the so-called supply chain pollution incident.

In fact, we do not seem to care about the pollution incident itself. Instead, facing the upcoming Olympic season, facing the 2012 year of the "demonizing" film and TV show, which is still in the throes of Li Ning Co, is it going to stage a bottoming out drama, or continue to be low fan, continue to explore.

Not long ago, five environmental organizations such as the Public Environmental Research Center released the report on pollution research in China's textile industry, Li Ning Co.

,

Many well-known enterprises have different levels of pollution prevention and control violations in the supply chain, and there are many problems such as large volume of sewage and low efficiency of water use.

In this pollution incident, the "injury" is the most profound number of Li Ning Co, the outside world will soon be released Li Ning Co 2011 Annual Report turned out to control, directly referring to its "rich marketing inability to control pollution."

According to the annual report, the overall distribution cost of Li Ning Co in 2011 was 2 billion 900 million yuan, up 13% from 2 billion 500 million in 2010, accounting for 32.6% of total revenue.

Among them, Li Ning Co brand advertising and related promotional expenses increased by 10.8% over the same period last year, reaching 1 billion 400 million yuan, representing an increase of 2.7% in revenue.

Zhong Ying, a contemporary Chinese Research Institute, is outspoken, implying that Li Ning Co as a listed company does not pay attention to the corporate image, which will damage the brand image by passing on the cost pressure behavior.

In the "China top 100 list of green companies" published in 2012, Li Ning Co and the 20 "big name" enterprises such as COFCO, Nike and Panasonic were unreasonably disappointed.

"Enterprises in the past were concerned about the interaction between enterprises and consumers, and now they have joined the society, which is called the concept of social marketing.

So for a Li Ning Co like light assets operation company, he is a manager of value chain. Supply chain is of course another value carrier of its value chain, so it really needs some responsibility.

Having been in the Li Ning Co for seven years, Zhang Qing, CEO of the key sports consulting company limited, told the new financial reporter that Li Ning Co is certainly unable to shirk its responsibilities. As a well-known enterprise, it should really affect the value of the enterprise to the entire value chain, and ensure the relevant consumer rights and interests in every link.

However, we have to admit that Li Ning Co has a "hidden meaning".

In fact, as a large enterprise, Li Ning Co has certain bargaining power, but compared with international brands, the gross margin level of Chinese enterprises is limited, which means that manufacturing costs and manufacturing costs to manufacturing enterprises are not as high as those of international enterprises.

For a Li Ning Co like this, it is necessary to carry out social responsibility while maintaining the cost control.

"Frankly speaking, Li Ning Co has been a leader among domestic companies in terms of environmental protection, material usage and supplier management.

In fact, sometimes internal standards are higher than national standards. "

Zhang Qing believes that in this context, Li Ning Co does not occupy a strong position in getting along with suppliers. Small suppliers can also do some screening. Factories with relatively large volume can not completely control each other. "The competition in the domestic sporting goods market is fierce. We only have about 16 listed companies, which means that large suppliers have ample choice.

What's more, your standard may be higher than the national standard. "

It is worth mentioning that for an individual, it is difficult to use the full moral standard to require the business behavior of enterprises. After all, enterprises are more concerned with pursuing maximum benefits without breaking the law.

It is more necessary to grasp the overall cognitive level from the national quality standard and the quality system of the industry than to change the situation solely by individual individuals.

In any case, this does not mean that there is no need for Li Ning Co to review.

Among the many exposure enterprises, why is Li Ning Co the most arable arrow? One of the reasons is that popularity is high, and even more importantly, it is not only the Li Ning Co supply chain pollution incident itself, but the Li Ning Co enterprise.

{page_break}

"As for the matter of supply chain pollution, as long as they are named, they are all famous enterprises, and those who do not call names do not mean no problems.

The independent critic of shoe and garment industry, Ma Gang, told the new financial reporter that the real concern is that there has been more than a year since the 2010 adjustment period. Under the overall bad condition of the industry, how to stabilize the confidence of Li Ning Co franchisees, "the overall strategy of brand and supply chain will be emphatically considered."

Ma Gang's worries are not surprising.

In 2011,

The Li Ning Co is no exception. The inventory provision of 188 million yuan is 63.48% higher than that of the same period last year. At the same time, the gross profit margin continued to decline due to the impact of the new wholesale discount policy and the increase in production costs.

Among the five major local sporting goods brands, Li Ning Co ranked the top in terms of revenue, but the net profit was at least: Anta ranked first in 1 billion 730 million place, Li Ning Co ranked 386 million in the bottom, and even less than half of PEAK, a net profit of 780 million yuan.

Although the Li Ning Co is still in the leading position of the first camp, it will undoubtedly provide opportunities for the latecomers to catch up.

On the other hand, the ambition of international brands to Chinese market is clear.

Adidas, which was once surpassed by Li Ning Co, surged 28% in China last year, ranking first in the world, accounting for second of its market share.

Nike has long been exploring its tentacles to China's four line to six line market.

Obviously, Li Ning Co has been sandwiched between wolves and wolves.

Remodeling sequela

In the eyes of most people, the declining trend of Li Ning Co today is actually due to the fact that it has not yet recovered from the sequelae of brand remolding failure.

In June 2010, Li Ning Co launched the largest brand remodeling campaign in the history of the company. The company will continue to use the brand name LOGO of 20 years to upgrade to the new brand LOGO of "Li Ning Co cross action", interpret the new sports values in the form of "human", and change the slogan from the original EverythingisPossible to MaketheChange; at the same time, in order to catch the young consumers, it will boldly play the slogan of "post-90s Li Ning Co" and try to attack the consumers after 90.

All these publicity points were placed in the first tier cities, and opened 70 sixth generation flagship stores in Beijing, Shanghai, Guangzhou, Shenzhen and other places, competing with Adidas, Nike and other international brands.

Objectively speaking, Li Ning Co's brand remolding campaign is not a temporary initiative.

In 2007, Li Ning Co hired Ziba to take the pulse of the company. At that time, it was concluded that the core consumer group is 35-45 years old, which means that the aging of Li Ning Co brand is becoming more and more serious.

So Li Ning Co CEO Zhang Zhiyong now rethinks: in another 5 years, when the original core consumer groups greatly reduce the consumption of sports products, how can Li Ning Co follow up growth?

The 2008 Beijing Olympic Games delayed the pace of Li Ning Co reform.

Although not the official sponsor of the Beijing Olympic Games, the Li Ning Co won this year beautifully. Li Ning Co has performed well in terms of brand awareness, reputation and sales.

In the next two years, Li Ning Co's sales performance rose sharply, surpassing Adidas and becoming China's sports apparel brand behind Nike.

By 2010, according to the world brand value Laboratory (WorldBrandValueLab), the brand value of Li Ning Co has reached 14 billion 252 million 200 thousand yuan.

In the view of Li Ning Co executives, this is the best time for the company to achieve brand remoulding and become an international top brand.

"The upward trend of the middle end consumers is becoming more and more obvious. We must keep pace with the consumers.

Of course, it's easier to walk down, but if we want to become world-class brands, we can only go up. "

Zhang Zhiyong has vowed to express.

{page_break}

However, the reality is cruel.

The drastic change made the market, dealers and investors feel unprepared, orders fell, stock prices dropped, investment banks faltered and reduced, personnel turbulence, and unstable people.

The original consumption main force 70, 80 after the crowd was "abandoned", the Li Ning Co's favor and desire to buy a decline, and its efforts to train the 90 did not buy it.

"It can be said that this brand remolding is a failure."

Zhang Qing believes that the pace of Li Ning Co is too much to be understood, and this is not the first time.

"The sportswear national team will be internationalized for a while. It will be fashionable for a while, but it will be 90 after that. It is difficult to understand what Li Ning Co wants to do." this is the voice that has been flooding the market for years.

Li Ning Co's swing on the product line is one of the most criticized places outside the world.

Li Ning Co is the first national team of sportswear, sponsoring many national teams such as gymnastics, diving, shooting, table tennis and so on. Its local brand sentiment and the image of the national team are deeply rooted in the hearts of the people.

In that era, Li Ning Co seemed to be a synonym for sports.

However, with the expansion of international dream, Li Ning Co, which is eager to upgrade its brand and expand its market, is beginning to "lose".

Around 2004, the Kappa of sports and fashion was rapidly rising. Then one of the most controversial figures in Li Ning Co, Le Shuyu, a Taiwanese Taiwanese with rich experience in fashion brand operation, was in the air.

However, Li Ning Co not only did not bloom in full, but rather "neither fish nor fowl".

Even after the departure of Li Ning Co, Lok Shu Yu also issued a feeling that "professional products have no professional function appeal, fashion products have no sense of fashion".

Moreover, in the following years, Li Ning Co has successively swayed and changed all kinds of creative and product design styles, and even tried many brands to operate different markets.

"The decline of Li Ning Co's performance comes from the instability of strategy."

Ceng Yanling, a researcher at the third financial Hong Kong stock exchange, said: "Li Ning Co's implementation of the form of manager management has been changing constantly in the market positioning, advertising expenditure is high, and the failure to control costs effectively is the main reason for the decline of its performance."

And Zhang Zhiyong himself attributed this swing to brand identification and DNA confirmation without real meaning.

{page_break}

War of professionalism

In 1999, Zhang Qing served as the director of Li Ning Co publicity, and occasionally took part in the internal meeting of managers and above. When we had problems in coordination among production, design, sales and advertising, Zhang spoke boldly and pointed out that there were problems in the company's process.

Chen Yihong, then general manager, decided to set up a process improvement team by several other colleagues of Zhang Qinghe to explore the problems raised by Zhang Qinghe.

Two months later, Zhang Qing was promoted to be the manager of the advertising department.

"A grass-roots employee can have the opportunity to speak at such a meeting, and get the high level of attention, personally involved in the implementation, such a situation is almost impossible to see in the professionalized and standardized Li Ning Co period."

Zhang Qing looked at the past Li Ning Co as a "family business" that was explored by enthusiasm and momentum. Today's Li Ning Co has long been a listed company under the brand of professional managers.

But in the process of professionalization from small to small, and increasingly standardized, Li Ning Co has gained a lot and lost a lot.

The 1990-1993 year was the initial stage of Li Ning Co's development. At that time, the most typical characteristic of Li Ning Co was to change the practice of traditional industries at that time, starting with the creation of brands, advertising, sponsorship and image shops, and immediately erected the brand of Li Ning Co in the market.

The potential problem at that time was that the project was too complicated, and everything was done with gifts and bicycles. At that time, Li Ning Co had seven companies, which belonged to a diversified operation.

At the end of 1994, Li Ning Co entered a stage of resource integration, reducing the number of seven companies to three, namely sporting goods companies, clothing companies, footwear companies, and finally merged three companies into one company. It established a unified production center, R & D center and sales center. The mode of franchising was adopted to promote large-scale sponsorship in the market. At the same time, the scale of 600 million million -7 was achieved in one fell swoop, and it was far ahead of Nike and Adidas in China.

Until 1999, the Li Ning Co put forward the initial internationalization. On the one hand, the Korean design team began to try the fashion route on the one hand; on the other hand, sponsored the French gymnastics team for international sponsorship, and opened the first overseas store in Spain; at this time, Li Ning Co TV advertising became a little girl, standing on the streets of Paris, dancing beautiful red ribbons; and Li Ning Co began to introduce the ERP management system on the hardware system construction, which laid the foundation for future career and standardization.

In fact, since the beginning of internationalization, Li Ning Co has begun to reinventing its first brand.

At that time, the goal was to break through the bottleneck of 1 billion sales and solve the trend of brand aging.

By 2001, Li Ning Co formally introduced professional managers and introduced more international talents.

The arrival of "paratroopers" has enabled the enterprises to complete the preliminary standardization construction, and the Li Ning Co has also changed from product oriented to market-oriented.

The fourth development stage of Li Ning Co is embodied in 2004-2008 years.

After listing, Li Ning Co has multiplying every year and ushering in a brilliant summit in 2008.

It was not until the second half of 2009 that it gradually entered the stage of adjustment and re brand remolding.

Looking back at the development of Li Ning Co, the most impressive impression of Zhang Qing is the introduction of professional managers.

It has to be said that the introduction of professional managers has brought more professional methods and experience to Li Ning Co, and the daily management has become more standardized and internationalized. The scale of enterprises has increased from the past 1 billion to nearly 10 billion nowadays, and has entered the capital market in one fell swoop.

However, hidden dangers also arise.

Slowly, the formulation of Li Ning Co's long-standing "sportswear national team" began to be criticized inside Li Ning Co.

Opponents believe that the Li Ning Co sponsored shooting team, diving team, table tennis team and gymnastics team, it is difficult to play a real substantive effect, because at that time, athletes in the competition, will not be wearing Li Ning Co clothing.

In the eyes of "airborne troops", compared with mainstream sports such as Nike and Adidas, which are sponsored by mainstream sports brands such as football and basketball, these national teams regarded by local employees as Li Ning Co and their important brand assets are not able to sell shoes and clothes.

Zhang Qingze represents another school's point of view.

In their view, the biggest difference between Li Ning Co and other local sporting goods brands is that the latter are mostly manufacturing enterprises. For profit purposes, sports are only means, while Li Ning Co is holding the sports card, having larger market, wider space and more games.

{page_break}

"Prior to the chat with Chairman Lining made me realize that Li Ning Co had been able to impress consumers, because Lining had strong social aspirations, but profits were important, but sports were closely related to the survival of the enterprise."

In Zhang Qing's view, the brand of Li Ning Co is the blood of sports. Once the core is affected or weakened, it will definitely affect the clarity of Li Ning Co's brand strategy.

In 2003, Zhang Qing, who was promoted to Li Ning Co's first marketing manager, chose to leave, because of the conflict between the two sides.

"Both sides will inevitably encounter collisions in the communication and discussion at the business level.

But at that time, the atmosphere of the whole company was that foreign monks would chant scriptures.

Our opinions are hard to respect.

Until now, Zhang still believes that the talents of multinational companies naturally have good methodology. But for the industry's insight and enthusiasm for sports, they are always the strengths of their generation of Li Ning Co's local employees.

To a certain extent, Zhang Qing's departure may be the epitome of Li Ning Co.

Since then, all disputes over traditional national team projects, such as mainstream sports, fashion, leisure or professional sports, all come from internal entanglements and confusion.

Over a long period of time, due to overemphasizing the background of professional managers and overemphasizing professional division of labor, Li Ning Co's system is becoming more and more complicated, with more and more posts. The operation efficiency of the whole enterprise is low, and the cost of manpower and communication is high.

Inside the Li Ning Co, there was a famous BI department.

The so-called BI department is aimed at the communication between brand departments, market departments and product departments, which is designed to coordinate and integrate inter departmental relations.

"For a long time, the various departments inside the Li Ning Co were professional, while the lateral communication was much worse, so the company would set up a department to integrate it, and no longer set up a department like a house, but in the end, those who really worked or did not change at the bottom, there were many more people in the middle."

Zhang Qing pointed out.

What is even more regrettable is that although more and more people are pouring into the Li Ning Co to make suggestions for the development of the company, they do not have a clear sense of direction.

In 2006 Basketball World Championships, Li Ning Co signed Spain national basketball team, Spain finally defeated the American dream team, won the championship of the men's Basketball World Championships.

In the face of such an interpretation, "everything is possible" (Li Ning Co slogan at that time), a good time for brand advocating, Li Ning Co did not respond.

"For Nike, it will not give such a good chance to take no action.

This shows that the current Li Ning Co simply does not understand the spirit of sports, and does not capture the ability to impress consumers.

In Zhang Qing's view, in the minds of many Li Ning Co people, this is just a business.

In other words, too many Li Ning Co people only see the commercial body of Li Ning Co, ignoring the DNA of their sports spirit.

Perhaps, the failure of the Li Ning Co's second brand remolding is also largely due to the fact that we only have a superficial understanding of the problem of "going brand ageing". We rush to the post 90's project on a wishful thinking basis instead of really thinking about how to go deep into the marrow to rebuild the brand.

{page_break}

Another battle year

Perhaps, Li Ning Co really woke up this time.

Regain professional sports, boldly abolish redundant personnel, and force children's clothing market.

Li Ning Co seems to have a sense of direction.

However, what is worrying is that for many years, Li Ning Co has never been short of ambitious aspirations and vision.

"From the current situation, although the effect of brand remodeling is not obvious, but from a large perspective, remodeling is the right choice."

In any case, Ma Gang is full of expectation for Li Ning Co to launch the final Jedi counter attack. "At present, the sporting goods industry is going on the road of heavy load. Lining is the earliest loader and the adjustment time is longer. In the industry, we should hope to take the lead in the adjustment period and usher in a new round of growth opportunities for the sporting goods industry."

"A number of surveys show that the first reference rate for Chinese sporting goods brands is still Li Ning Co, which means the first opportunity to buy, which means that during this period, as long as the figure remains unchanged, Li Ning Co can seize the opportunity to come back again."

Zhang Qing also expressed optimism about the future of Li Ning Co. In his view, as long as Li Ning Co's campaign DNA is still in use, as long as the value of its brand assets in the minds of consumers is still in the process of dealing with the internal problems of the enterprises, Lining is still the most potential enterprise. "Because it is closest to the essence of sports recently, do not see many companies have good financial results today, but really ask about sports understanding and sports risk creation, it is very difficult for an enterprise to meet Lining."

In the short term, the Olympic Games have given Li Ning Co a chance to turn over. If we can help London's Olympic Games to re stimulate Lining's low market performance, it will be just around the corner.

In any case, by the end of 2011, the total output value of China's sports industry reached about 222000000000 yuan, of which sports products accounted for more than 80%, and the apparel industry was one of the fastest growing areas in the sporting goods industry.

"Now is the adjustment period of the industry, the top three to five giants will carry out an adjustment, if we can do a good job of differentiation, in product quality, distribution control and other aspects of performance is robust, in the next ten years, there may be 2-3 brands that can break the wrist with international brands."

Zhang Qing said.

Of course, the challenge is still small.

At present, the sporting goods industry is in the most painful period of the industry. From the high income and high growth, the competition in the industry becomes more intense, and the brand will be left behind by the competition.

According to CIC's online industry research report, sporting goods will still be challenging in 2012, and local brands still need to face problems such as cleaning up inventory, ordering difficulties, and turning consumer demand to brand operation.

"The industry will change from multiple brands to the national market, and a few brands will coexist with the national market. Some brands will become regional brands or subdivision brands, and the comprehensive national sporting goods enterprises will be reduced to 2~3."

Ma Gang said that the sporting goods industry has entered a period of adjustment. In recent years, it has decreased from 20% annually to 13% in 2011. It is estimated that the growth rate will further slow down to about 5%~8% in 2012.

The current situation is that Lining and Anta, who earn tens of billions of yuan per year's income, are keeping the first camp. XTEP, PEAK and 360 degrees belong to the second tier of 5 billion yuan or so, and the small brands in the third tier have become more and more difficult.

For a long time, due to the overemphasis on the background of professional managers and the excessive emphasis on division of labor, the system of Li Ning Co is becoming more and more complicated, with more and more posts. The operation efficiency of the whole enterprise is low, and the cost of manpower and communication is high.