The Problem Of Lining'S Brand Clothing At This Stage

In 2011, at an order meeting, which was specially launched by Li Ning Co,

The order quantity of clothing products and shoes products decreased by more than 7% and 8% respectively, and the total amount of orders decreased by about 6% compared with the same period last year.

Moreover, the situation continues to deteriorate.

In the year when the market performance was almost no improvement compared with the previous years, only a profit Li Ning Co was defeated by rival Anta over 600 million yuan.

What is surprising is that public information shows that Li Ning Co's operating income in 2011 was only 8 billion 929 million yuan, down 5.8% compared to the same period last year, while net profit dropped by 65.2% compared to the same period last year, with 386 million yuan ranking behind the five sports brands of XTEP international, 31st, Anta and PEAK.

As income and profits both slipped, Lining not only lost the second domestic seats that were second only to Nike, but the first throne of its domestic sports brand was replaced by Anta.

Changing the outcome of the premature failure has led Lining to question and criticize from all sides, and ushered in the Li Ning Co's breakthrough in 2012.

Disputes over "pformation strategy"

From the ground slowly rising from the sky, the hand burning flaming torch, accompanied by the bright moon, strides more forcefully than the "kuaer" to chase the sun, and rushes to the giant "Xiangyun" main torch tower.

Lining's scenario of lighting the Olympic flame of the 2008 Beijing Olympic Games in the way of "flying trapeze" is believed to never be erased in the hearts of the Chinese people.

It is also with the help of the strong marketing offensive of the Olympic Games that Li Ning Co's products have been on the rise in the following year, and have pulled off the international rival Adidas, and have taken the lead in the domestic marketing volume.

More dramatic changes took place in Li Ning Co after the Olympic Games.

In June 2010, at the celebration of the 20 th birthday of Li Ning Co, Lining released a pformation strategy focusing on "brand remolding" and "channel pformation".

People saw that not only the slogan of Li Ning Co was changed from "Anything is possible" to "Make the change", but also "don't always compare me with others", "the way you arranged for me always let me get lost" and so on.

The intention of Li Ning Co brand remolding is very obvious, that is, to greatly enhance brand value, and use the "90 after" new knowledge and new sense of consumption characteristics to directly get the brand mental status, and complete the magnificent turn from cost driven business mode to value driven business mode.

In response to brand remolding, Lining's strategic thinking of channel change is also very clear, that is, by integrating some small and inefficient dealers, the scale of operation can be improved to enhance the professional degree of operation and optimize the allocation of resources, so as to achieve the pformation from vertical growth to horizontal growth.

Statistics show that Li Ning Co has 129 distributors and over 2000 distributors. About 1700 of them operate on average only 1 stores. Most of the spatial images can not reach the display level of standard stores, and sales service level is low. It is very difficult to timely merge and degrade products, and the turnover speed of goods is also very poor.

According to Lining's assumption, the integration of dealers will be carried out at a rate of about 500-600 per year.

In the view of market participants, Lining repositioned the customer groups while changing the signs and slogans, and targeted the "post-90s" as a wrong decision at the wrong time.

Analysts believe that the visual impression of Lining products to consumers is that Chinese products and styles are conservative. For Chinese consumers, especially the younger generation, if they can afford foreign brands, most people will not be willing to spend almost the same price to buy domestic brands.

The key is that a market survey shows that Lining's mainstream consumer groups are concentrated in two or three line cities, and the average age of consumers is between 35 and 40.

Obviously, while trying to cater for the "90's" consumer market preference, Lining abandoned and lost loyal customers.

In addition to damaging the loyalty of the original customers by brand remolding strategy, professionals pointed out that because of eager to change from the price market to the value market, Lining also made a risky decision: by raising the price to narrow the distance between the brand and the international sports brand.

However, because the main customer groups of Lining brand are still concentrated in the two or three line cities, and because of the product style, experience and marketing means, there is no synchronous follow up. The continuous price raising behavior makes Lining's original cost performance advantage no, and those consumers who are already very sensitive to the price have to turn to Anta, PEAK and other high cost domestic sports brands.

Channel change strategy has also been criticized by market participants.

In the industry view, the terminal sales ability is still the key to the success of local brand enterprises. Therefore, Lining is undoubtedly right by promoting the strength of the merger and reorganization of distributors, and ultimately improving the management level of the retail network.

However, because some distributors who have fewer stores and smaller business areas are merged by higher dealers, this will inevitably cause some distributors to have a psychological conflict. At the same time, some old channel operators often have an inertia. They are very aware of the original consumers. In order to prevent the loss of old customers, they will generally have difficulty in choosing advanced styles or holding a wait-and-see attitude.

Not only that, after Lining made such a huge channel change action, it may also lead to some channel traders' "anti water", which may not only affect sales volume, but also allow competitors to take advantage of the dealer's pfer to others.

In my view, Lining's dilemma can not be simply attributed to the mistake of its strategic pformation.

It should be said that the competition ecosystem confronting Lining today is much more severe than it was at the beginning.

Now Lining has to contend with the foreign brands such as ADI and the pursuit of local brands such as Anta. In this dangerous environment of "wolves choosing food", Lining must find room for survival and expansion.

Based on this analysis, Lining's brand remolding and channel pformation strategy shows the advanced consciousness of a business operator in peace of mind. It represents the future trend of Chinese enterprises turning from cost winning to brand winning, and from low-end competition to high-end industry.

Just as the benchmarking and forerunner of the domestic sports brand, Lining products take the lead in undertaking the high cost of change and the high cost of trial and error, and may even fail or become a martyr, but still deserve people's respect and respect.

You can start all over again.

From athletes to businessmen, it is a new start for Lining, and the acquisition and acquisition of every gold medal is a new start for Lining.

Therefore, today, whether it is in the board of directors and directors to chat, or on the usual day to encourage employees, Lining's favorite saying is "start over!"

Perhaps it is such a return to zero mentality that Lining can pcend himself and surmount the past step by step.

Obviously, in the face of the company that he described himself as "embarrassing", Lining firmly laid out the "breakthrough" posture.

Active redundancy is an important strategy for Lining to alleviate the pain of change.

According to the plan, through layoffs, Li Ning Co can reduce the share of human resources in group sales by about 0.5 percentage points in 2012.

According to the Deutsche Development Bank (Deutsche Development Bank), the Li Ning Co personnel cost accounted for 10% of total sales in 2011; meanwhile, the Deutsche Bank's research report said that although Li Ning Co's revenue fell by 6% in 2011, the overall cost, including distribution costs and administrative expenses, increased by 7%.

Contrary to Li Ning Co, Anta's sales performance is far ahead, but its headquarters is only 1/6 of the former.

It is true that the outside world has seen that since last year, Li Ning Co has been the chief marketing officer, brand marketing director and IT director, and other departments have resigned, and the departure of ordinary employees has become the norm.

In Lining's view, this is an inevitable choice for the company to optimize its organizational structure and staff quality.

De stocking is a bone that Lining must swallow.

Statistics show that at the end of 2011, Lining's product inventory increased by 200 million yuan compared with the same period in 2010, an increase of 40.57% over the same period. Not only that, in 2011, the average stock turnover days of Li Ning Co reached 73 days, 21 days longer than 2010, which greatly exceeded the 38 days of Anta's inventory turnover days.

Due to the increase of inventory and the extension of turnover days, the storage fees will increase and the risk of inventory impairment will also increase.

Data show that Lining's inventory provision in 2011 was 188 million yuan, an increase of 63.48% over the same period in 2010.

The discount rate of general stores is about 24% to 25%, while the discount rate of factory stores and discount stores is 50% to 53%. Therefore, as an important means of Lining's de stocking, it is to increase discount stores and factory stores to digest inventory pressure.

According to the latest plan, Lining will add 200 factory stores and discount stores this year. It is expected that the proportion of sales channels will increase by 4 percentage points to 15% this year.

Relieving and eliminating the pressure of cash flow is another problem that Lining must solve.

Due to the expansion of inventory funds and the lack of funds for new products, the fact that Li Ning Co's book capital is obviously deficit makes its cash flow debut for the first time in history.

Fortunately, not long ago, Lining won the convertible bond investment of the world leading private investment company TPG and Singapore Government Investment Corp GIC totaling 750 million yuan.

The introduction of TPG as a strategic investor in the form of equity trading can not only alleviate the embarrassment of Li Ning Co's tight capital, but also help to achieve the goal of Lining's strategic pformation.

Speed up internationalization is a key step for Lining to divert domestic market risks.

Although Lining products have entered 23 countries and regions, the proportion of overseas businesses is only 1.7%. For this reason, Lining proposed the latest goal of raising the contribution ratio of foreign market to the company to 20%.

As a new move in internationalization, Li Ning Co launched the e-commerce retail mode in the US market not long ago.

It is reported that the "digital Lining" electricity supplier website was established by Lining and Acquity, a Chicago digital consultancy company. Both sides hold 50% stake in the cooperation and the initial investment is 10 million US dollars.

Figures show that the total sales volume of online sales of Nike and Adidas is less than US $400 million a year, which undoubtedly sets aside a new space for Li Ning Co.

At the same time, Li Ning Co is ready to innovate the traditional sales mode in the European market and adopt a fully authorized mode of operation. In the Southeast Asian market, Lining intends to develop more products while consolidating the sales position of badminton products.

Species.

"Internal reengineering" is more important.

However, looking at Lining's correction path, he still stays on the "surgical operation". Lining's vision should be more focused on internal reconstruction.

On the contrary, Lining has been swaying between sports and leisure in the functional positioning of products. Such vague positioning can neither grasp its customers nor even cultivate loyal consumers.

Moreover, Lining is also a hot spot in the positioning of brand personality.

According to a survey conducted by Lining, a world-renowned public opinion and business survey consulting firm, Gallup, consumers think Lining is like a friend with a bad personality around him. He feels very friendly and familiar, but lacks a distinctive personality.

A brand, such as a person, a person with a strong personality will give people a strong visual impact and be remembered, but on the contrary, it will be hard to impress others.

It is also necessary to point out that people who have met Lining know that Lining is very charming and very polite, but his character is mild.

A story known to Li Ning Co employees is the torch bearer who was the main venue of the Beijing Olympic Games. At that time, Li Ningchuan was Li Ning Co's sneakers. However, taking into account the interests of Adidas Olympic sponsor Lining, Lining deliberately covered the Lining logo on his shoes. After the opening ceremony, Lining even sent text messages to the director of marketing department not to want the company to exaggerate the torch bearer.

Many people think that because of Lining's implicit way of doing things, the style of the whole company is becoming more and more mild and even pedantic.

This kind of corporate culture not only makes the Li Ning Co lack the offensive ability to compete with its competitors, but also makes the managers in charge of the company dare to spend money lavishly. The Department's "pinch" behavior occurs frequently, and the staff product quality accidents can not be controlled and handled in time.

It seems that upgrading the role of "ruthless" and strengthening the executive power of the organization will be a lesson for Lining's emphasis.