Chen Fan, Chairman Of Yu Yu Private Equity Fund: Interpreting What A Good Business Model Is

< p style= "text-align: left >" 2013 China "a target=" _blank "href=" http://www.91se91.com/ "clothing" /a "forum" first brand laboratory and brand experimental Sharon, will gather the avant garde thought, explore the brand business mode, innovation mode, promotion mode, consumption mode, communication mode and product mode with the Explorer's thinking and knowledge, highlighting the forward-looking, experimental and pioneering.

Through the application and experiment of new technology, new mode and new trend in brand practice, we can create creativity and competitiveness, form new values and forces, and promote the incubation and growth of new leaders.

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< p style= "text-align: center" > chairman and CEO of volume private equity fund Chen Fan /p.

Mr. Chen Fan, chairman and CEO of volume Yu private equity fund, shared the view from "management" at the meeting. P

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< p > Chen Fan: it is not easy for all of us. This insistence to this day is the vicissitude of the right path of the world. Let's solve the struggle in 15 minutes.

Today, I am very happy, because four years ago, I talked with many of our old friends in the clothing industry about private equity investment. Today, I came to see many friends. Just now, we have talked about how to make a good business model. What is a good business model, a good business model, what is the role of the continuous growth of enterprises? This is my title.

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"P" is so, in fact, we all speak for half a day, do business model, and today we are the subject of business, but also business model, but everyone thought that there is no one thing, do business model is why? To do business model in our clothing industry, it can be seen as a service, then what is the pig belly? Is a large number of homogeneous large and medium commodity enterprises.

What is the Phoenix Tail? That is, many of our very characteristic brand a target= "_blank" href= "http://www.91se91.com/" > designer "/a". But this kind of enterprise is an artistic quality. It can not be scaled up. What is it in the lead? What is the sustainable growth enterprise? What is a sustainable growth enterprise? Then we should focus on this concept and give you a case.

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＜p＞　　其實做企業最終的目標是什么?最終的目標只有一個，就是企業的價值，換句話來說就是股東的價值最大化，前邊我們講了什么員工什么社會，這些東西我都不反對，但是咱們實實在在的講股東價值最大化是所有企業的最高主力，他這里包括兩個點，同的角度來看，什么叫一個好的企業，好的企業具有兩個提高特點，第一個特點就是具有消費壟斷性，什么叫消費壟斷性，就是你的服裝有定價權，你的服裝有人買，而且沒完沒了的只買你的不買別人的，這種壟斷性，但是消費壟斷性也好，品類站位也好，包括商業模式也好，都為了服從一個目標，這個目標是什么，這個目標就是可持續增長，是企業內在價值的可持續增長，而這個增長是有三個前提條件的，可以預測長期穩定的三個增長。

Is there such an enterprise in China? Frankly speaking, there is no one now.

But it doesn't matter. In recent years, we have found that both catering enterprises and beverage enterprises, including clothing enterprises, have already begun to sprout. This kind of enterprises' funds have already started to go in this direction.

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< p > so what we care about as an entrepreneur is not to judge whether an enterprise wants sustainable growth. Is it consumer monopoly? What are we concerned about? What we care about is how to make an enterprise like this and make it a sustainable growth enterprise.

Let me give you an example: like Coca-Cola, it will last forever, and his profit margin will increase by 20%. His net profit will not stay down, and it will remain unchanged for 50 years. What is the concept of 50 years? Every three and a half years will be doubled to become a technological growth. This is a concept of auxiliary rate of time, and such an enterprise Buffett has done four in his lifetime.

So how can we do this? What is its secret? We have found it in seven years. What is it? It is necessary to combine the three things of category strategy, business mode and strategic investment to help enterprises achieve sustainable growth one by one. Finally, once we are done, we will have four indicators.

The first discretionary profit margin, the growth rate of second enterprise values, the rate of return of third intrinsic values, and the rate of return of fourth shareholders.

So in order to achieve sustainable growth, we have to have a good business model, what a good business model, from investors, the following six characteristics of the business model is good business model.

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< p > first, you must have integrated monopoly resources or monopoly resources.

What is consumption monopoly resources? It is the resources between others' control, not the resources of management.

The second point is to try to change the nature of the cost. This morning, Professor Zhu mentioned that this is to turn management into a paction.

The third business model is different business models. We are all doing business models, but we must find ways to set up business models with high potential and single booth. His profit margin is high and his value return rate is high.

Fourth, we should try our best to design the business mode to achieve the characteristics of supply while minimizing paction costs and maximizing the value of pactions.

Fifth, a good business model must be highly replicative, not only reproducible in time, but also replicable in space.

Lastly, a good business model will make your business growth predictable and sustainable.

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< p > we will talk about a case as a result. In these cases, I did not use Zara, because all of you are experts in the clothing industry. You are all very clear, but I am going to talk about the model of Coca-Cola from the outside of this writing brush. So far, we can see how Coca-Cola has done it. Coca-Cola can achieve sustainable growth of these three points. I am not repeating here, but let us see why China is saying that sustainable growth is the most difficult point for enterprises to achieve.

Basically, once they are listed, they will not be more than five years in three years. They are not sustainable. For enterprises, this is the hardest part. After listing, they are concerned about sustainable growth.

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< p > we see that in the early days of Coca-Cola, when he had no competitors, he was a big one. All the customers he faced, he concentrated liquid plus brand promotion.

He lets the worker as a worker, through the brand control, through the control of the key resources of the concentrated liquid, let others do the bottling, let others do the channel, his two customers, the right side is the paperback company, so he passes the so-called monopoly right to control the terminal. But what is this good dream? Because the profit margin of the bottling company is only 4% to 8%, which is over 17%, but with the march of Pepsi, Pepsi Cola directly controls the company to play with him in the supermarket through strategic control.

So soon their market share is getting smaller and smaller, with only 9% difference.

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"P > Coca-Cola's new CEO comes up with a very good practice. We all know why the model has a reference for our clothing industry. What is the first step? What is the first step? What I want to talk about is the core issue. It is to maximize the shareholder mechanism of the enterprise. But he finds a problem. If he wants to make this profit and net profit grow, he must grasp the high profit margin customers.

These channels are in the hotel, in these so-called automatic, but his company's relationship with him is a contractual relationship, he has no absolute company for others, these platform companies are not willing to help him to do these activities, the platform company and his interests are inconsistent, changing the interests between them, so now our clothing enterprises are also, some very large enterprises have done very well, but his channel business is not consistent with his interests. The squeezing of intermediate inventory is a big problem for him. So what kind of method did the same problem happen to Coca-Cola? He changed the trading relationship and paction structure, he changed the right of paction and contract to a controlling stake.

These companies control the channels, which control the customers.

但是建立這一種單純的所謂的關系以之后呢，因為瓶裝公司的利潤率低及所以就把這個母公司濃縮公司的利潤率，和重資產統統拉下來，為此它們做了一個雙層的改造，這個改造是什么呢?這個改造就是他在瓶裝公司那一層，他完全是控股，所謂控股公司，反過來他對控股公司呢這個母公司只占49%，這個賣給公眾，所以這樣的話他既達到了控制，第一沒有重資產，第二沒有銷售額，這樣話呢，它的利潤率不改變，所以最后它的這個收入來源呢，從簡單的濃縮汁銷售，加上股權收益，這種推動價值回收的方法，改變了整個效交易結果的方法，設計的改變就有點像剛才叮當貓那個，從原始到后來交易的改變，它實際上從事經營前關系，改變成價值鏈股權關系。

Let's see what changes he has made.

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< p > these changes. On the first TV set, its first change is that he is a customer who has been holding all the time and has become a customer who focuses on the high profit area.

Finally, because Pepsi Cola only played young people, but he did not play by age, the value of insensitive customers, and he went to attack international customers, it accounted for 80%, 80% of profits from international customers.

The second point is that he spreads the marketing of concentrated juice and brand, plus strategic control, and third from simple contractual relationship, authorization and exclusive licensing relationship, so that bottled companies and himself as a parent company's concentration company have the same interests.

The fourth point is that he restructured the capital structure. He actually made a simple, absolute holding, and became a two-tier absolute and relative holding company with a high profit margin.

Lastly, he has developed a new profit area from domestic to international, from single category to whole category, and copied brand management and equity. He has copied this model. You compare this case with the six points I mentioned before, and you will find that this is a very twist.

Case study.

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< p > finally, let's see what the result is, after structural adjustment, in early 14 billion, Pepsi Cola 8 billion to 98 years, 150 billion, while Coca-Cola is 14 billion, what does it mean? It shows that its profit margin is high.

Finally, let's talk about the business model, for a company's sustainable growth, every three and a half years you need to adjust a business mode, otherwise you will fall, but business mode is not omnipotent, brand strategy focus and brand booth innovation, value driven investment in two wheel drive growth, including organic growth is not advanced, finally risk control, these modern corporate governance mechanism of long-term companies, these four basic elements can help our Chinese clothing industry, realize the value of sustainable growth.

Thank you.

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