The Success Story Of A Tie

Tens of thousands of Zhejiang enterprises have joined together to form a unique competitive power with meager funds and ordinary technology, and the international tiger giants have also been daunted.

At the beginning of this century, a large number of small and medium-sized enterprises in Zhejiang gradually felt the trouble of growing up. The prices between enterprises were mutually pressing, brand positioning repeated, labor costs rising and technology still weak. So, some people gave up and sold the factory to live a rich family life. Others still persisted in exploring the way out for enterprises in the predicament.

Shengzhou tie is such a group of learned to use collective strength and wisdom, and gradually survive and grow in the jungle.

With the help of 300 million neckties, which account for 40% of the world's annual output, they constitute the global "tie" OPEC.

How much can a tie earn? An expert from the Shengzhou necktie Industry Association said that the export price of similar quality and craft to Zhejiang after the production in the United States was generally 20-30 dollars, gross profit 20% or 30-50 yuan, net profit 10% or 15-25 yuan. The import price of Italy's postnatal sale to China was generally about 150 dollars, gross profit margin and net interest rate were slightly higher, at least more than 10 times.

Why

Neckties earn much more than Zhejiang ties? "Because Italy is a world-famous clothing producing area, the most profitable part is brand value."

The expert said that due to the lack of well-known global brands, and unable to create dazzling industrial giants, Zhejiang tie can only work hard with Mexico, Malaysia, Vietnam and so on.

Nowadays, the Zhejiang tie has been the embryonic form of the global brand, but the brand is not just an enterprise, but thousands of Shengzhou tie production enterprises.

Save 1 million publicity costs per year

Shengzhou was very cold in December.

December 24th, Zhejiang Baili

Liu Dejun, general manager of clothing Limited, just finished celebrating his Christmas with his employees, and hurried back to Shengzhou hotel.

There, the last big order was waiting for him last year.

As a tie enterprise founded less than two years ago, it has reached 80 million of the annual output value. In Shengzhou, it can not be regarded as a miracle.

Liu Dejun did not think so.

In his eyes, the current success is mainly due to the maturity of the whole cluster brand in Shengzhou, and he only finds the right opportunity in the right time.

So-called

It is a regional name plus an industry name, such as Datang socks, Yongkang hardware, Liushi electrical appliances, etc.

As the boss of one of the second generation of tie enterprises in Shengzhou, Liu Dejun carefully calculated the cost at the beginning of the enterprise.

He said, compared with the first generation of tie enterprises, the second generation enterprises lack brand advantage, and they need to invest huge financial resources in making brands. This is unrealistic for any small scale enterprise.

Under the leadership of the local industry association, since 2000, a new logistics called collectives trademark has been distributed to all the big tie enterprises in Shengzhou.

"At that time, all our market activities were arranged by the government and industry associations, and unified by the image of Shengzhou tie."

Liu Dejun said that when communicating with some foreign entrepreneurs, it is found that enterprises like themselves invest at least 1 million of their annual publicity and join in the whole industrial cluster, so the publicity fee is almost zero.

"After the implementation of the cluster brand, some high-end neckties now sell at least $40, which has made 1/3 profits more than in the past."

Liu Dejun said that the town of Italy is a good example of cluster brand, where every tie produced by the company is labeled with the trademark of ink and then its value is increased.

"We expect to sell about 4000000 this year and output value exceeded 80 million yuan, and we haven't added any advertising cost to this."

Liu Dejun described the benefits of the Shengzhou tie brand.

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Get the international pricing power of tie

In addition to saving huge publicity expenses, the overall image of Shengzhou ties can also be used to achieve higher market quotations.

Last summer, Shengzhou's tie enterprises had to make an astonishing decision at the same time as the price of fabrics increased, and the collective price increase was 10%.

At that time, the industry self-regulation document issued by the Shengzhou necktie Industry Association required that the price of the newly purchased fabrics and ties of 33 large export enterprises should be up to 10% on the original basis, and that the export quotations for silk dyed silk neckties would be at the lowest level of 2.2 US dollars, and that the maximum number of 200 thousand or more items could be reduced by up to 0.1 US dollars.

"Once a company's external quotation is lower than the lowest price promised, all the margin will be dealt with fines and exposed within the industry."

Hu Shaonan, President of the Shengzhou necktie Industry Association, said that a self-discipline supervision committee composed of 13 people was established at the same time, which is responsible for the supervision and execution of industry self-discipline undertaking.

In order to ensure that 33 enterprises fulfill their self-discipline commitments, the association proposes 33 enterprises to pay the margin according to the number of computer looms: the enterprises that have 10 computer looms below, pay 30 thousand yuan, 11-50 enterprises, pay 80 thousand yuan, and 51 or more enterprises pay 200 thousand yuan.

"Under the unified arrangement of the association, the price increase was very successful.

Although there are individual customers who want to persuade some business owners not to raise their prices, they have to give up the price when they hear that the price increases are initiated by the whole industry.

Hu Shaonan said.

Finally, one plus one is greater than two.

A year ago, the Shengzhou municipal government announced to the world "tie a tie for the earth" and create a Zhang Jinshai card for the whole of Shengzhou.

Yao Xiangjun, vice mayor of Shengzhou, said that nowadays, enterprises with technological conditions in Shengzhou are making articles on high value-added products. The government also encourages enterprises to innovate independently, but this road is still in the long run.

As far as we can see, a well ordered industrial cluster is also a good way to increase the added value.

In addition, the government or industry associations take the lead in jointly applying for collective trademarks, and they can achieve the same goal.

Guangdong has issued the guiding opinions on the construction of Guangdong industrial cluster upgrading demonstration zone, which includes two items: encouraging groups, associations or other collective organizations to apply for registration of collective trademarks to the industrial and commercial departments; and encouraging local quality and technical supervision departments to apply for protection of geographical indications products and other geographical indications products.

Many experts in Zhejiang's economics circles also agree with this pattern of Shengzhou ties.

They believe that this is a form of cooperative game, that is, enterprises pursuing different interests are united in the same group, while realizing the interests of the group, and at the same time, achieving the maximization of individual interests.

At the same time, it avoids the disadvantages of repeated construction, waste of resources, and high volume and low price caused by non cooperative games.

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Wu Jiaxi, director of the provincial SME Bureau, said that Zhejiang is a relatively developed industrial cluster. If the government completes the cluster brand, it will help enterprises to develop marketing.

Customers often rush to the main industries in the region, and small and medium-sized enterprises have ties business.

Cluster brands need to be summarized and improved.

However, forming a cluster brand is not equal to the road of globalization brand, and there are many risks that may threaten brand development.

For example, any member's bad behavior, fraud and other betrayal activities may affect other enterprises.

When the oil crisis happened in the 70s of last century, a similar incident happened among OPEC members: some members violated the agreement and privately increased production to make profits, which resulted in the collapse of the entire organization's price alliance.

In addition, Yongkang's hardware, Keqiao textile, pearl and socks in Zhuji, glasses and lighters in Wenzhou, electrical appliances in Yueqing are all famous industrial clusters in Zhejiang. Many of them are overpriced because of their excessive local capacity, and have been subjected to anti-dumping investigations by the United States and European Union, thus destroying the core competitiveness of the whole cluster in a sense.

In the view of Wu Jiaxi, director of Zhejiang SME Bureau, the experience of "Shengzhou tie" is undoubtedly worth studying and learning from.

He believes that at present, Zhejiang's economy is at an important juncture of pformation and development. The use of industrial cluster advantages to build regional brands can serve as a strategic thinking for the pformation and development of regional economy.

About cluster voice

Gao Chuang, Dean of the school of business administration, Liaoning University: the advantage of the brand name of cluster brand is that most SMEs are unable to fight their own brands at the beginning of their business.

The creation of cluster brand makes a cluster quickly known by the outside world. Accordingly, the small and medium-sized enterprises in the cluster may soon get tourists.

Like Shengzhou, many small and medium enterprises are actually the beneficiaries of the four words "Shengzhou tie".

Liu Bing, Dean of School of economics, Shandong Institute of Business and Technology: the most important tendency of entrepreneurs is not to attach importance to cluster brands. In fact, it is not seen that cluster brands can give birth to personalized brands.

There is a phenomenon in the eastern coastal area, that is, many well-known trademarks and famous brands in China come from the developed areas of enterprise clusters.

Why? Look at the origin and current situation of these famous brand winners, it is easy to see that many related (similar, similar, linked) enterprises are working with them, competing with them, and the objective pressure and motivation brings continuous improvement, which brings the success of personalized brand.

Yao Xiangjun, member of the Standing Committee of the Shengzhou Municipal Committee and deputy mayor of the municipal Party committee, said: small and medium-sized enterprises can get some benefits from the cluster brand, which is easy to get the advantageous position relative to the upstream and downstream industries. If they become famous in the domestic and foreign markets, they will be able to get higher market quotations, and they will be able to accomplish a lot of things that individual enterprises can not do. They can gather all kinds of policy resources, get support from industrial policies or business policies, and quickly become a "polar" in the division of labor in the international industry, which is conducive to the upgrading and pfer of industries in the global environment.