How Does A Chinese Generation Factory Attack In The US And Europe?

Gao Zhendong was holding a printed company brochure in his hand, telling him about his experience carefully.

The newly printed brochure was not dry, and the gap between the pages was very large. This little flaw made him very uncomfortable. Gao Zhendong picked up his cell phone and used WeChat's voice command to quickly collect the heavy objects and press the brochure to prepare for the next day's use.

At midnight, the office is still brightly lit, and in a few hours, a forum on "creating the future" will be held, and the brochure will be distributed to hundreds of participants. The organizer of the forum is Bao Shi De technology (China) Limited (hereinafter referred to as "Bao Shi De"), and Gao Zhendong is the founder of this company.

In 1994, Gao Zhendong went out of the system and founded Bao Shi. In the next 22 years, he started in Suzhou and led Bao Shi to complete a trade from trade to OEM. brand The theory of Chinese enterprise evolution.

It is worth noting that in the subdivision area of power tools, Bao Shi was once the foundry of BOSCH and Black & Decker, the world's manufacturing giant. After creating its own brand, the company killed a return gun and fought against BOSCH's "lair" Germany. Today, Bao's products sell well in Europe's home decoration chain supermarkets, which are higher than those of European brands, and now have 4200 patents worldwide.

"Gao Zhendong himself is very low-key, rarely seen him come out for media interviews, his thoughts are all put on. product In terms of R & D, Bao Shi also has the largest number of patents in the park. An entrepreneur from the Suzhou Industrial Park also spoke of the company's admiration.

　 "Go to sea early"

Dating back to more than 20 years ago, Gao Zhendong's entrepreneurial experience began in universities.

During his study at Nanjing University, Gao Zhendong was not at ease. He had developed a shoe polish formula. The shoe polish produced with this formula can only be applied to shoes without cleaning.

Later, this formula was taken seriously by Gao Zhendong middle school teacher. The latter produced 20 thousand yuan of funds and let Gao Zhendong set up a school run liquid shoe oil factory to help middle school.

Because the shoe polish produced by this factory is easy to use, the products are popular in the market. "I was robbed before I went to the counter. But a month later, all the shoes were polished. leather shoes Almost all cracks. " Gao Zhendong said with a smile. Looking back on the past, he still has fresh memories.

In Gao Zhendong's view, this experience is not a startup, but a social practice, but the experience of this failure made him feel guilty inside. Later, after grabbing the first barrel of gold, the first thing Gao Zhendong did was to return 20 thousand yuan to his alma mater.

In 1985, he graduated from Nanjing University. His first job was to go to the town of Qian Deng (formerly known as "Qian Dun town") in Kunshan, and served as Deputy Secretary of the Youth League Committee. A year later, he was transferred to the Organization Department of the county Party committee and became the first cadre to be transferred to the county Party committee.

The work of the Organization Department of the county Party committee did not last long. "At that time, I found that I was not fit for politics because I had too many thoughts in my mind."

In 1987, Gao Zhendong came to Nanjing to work in a state machinery import and export company. "The best industry in the 90s of last century was the foreign trade industry, with high wages and the most rewarding."

But it turns out that Gao Zhendong's character is still out of tune with the system. After working for 6 years in this machinery import and export company, Gao Zhendong decided to "go to sea" and began to do business in foreign trade. He left the system with customers who had already supplied the system.

"At that time, I remember a client did not follow it out, the rest were with me." Gao Zhendong said.

Looking back, the timing of Gao Zhendong's "going to sea" coincided with the period when China's export trade began to develop greatly. Since 1994, China has implemented a series of new reform measures of foreign trade system centered on the reform of foreign exchange system to promote the development of China's foreign trade.

Data from Chinese Customs show that from this year, China's foreign trade began to achieve a favorable balance. In those days, the total value of China's foreign trade imports and exports amounted to US $236 billion 700 million, an increase of 20.9% over the previous year and a surplus of US $5 billion 300 million.

In 1995, China's foreign trade import and export amounted to US $280 billion 850 million, an increase of 18.6% over the same period last year, with a trade surplus of 16 billion 690 million US dollars.

But Gao Zhendong's road to foreign trade is not smooth sailing. By the end of 1993, a mistake between banks and buyers almost cost Gao Zhendong a lot.

According to the prevailing practice of foreign trade at that time, buyers would put money in the bank before they received the goods, and the bank would pay the money to the traders after receiving the goods. This time, after picking up the goods, Gao Zhendong did not receive $2 million.

In those days, this fund was undoubtedly a huge sum of money for Gao Zhendong who had just gone to sea. Since then, Gao Zhendong has been negotiating with the other side. Finally, on the night of that year, he returned 1 million 500 thousand dollars in cash and went home for the Spring Festival.

Gao Zhendong suffered a direct loss of $500 thousand and almost bankrupt his company. Since then, Gao Zhendong has become more cautious and the business of foreign trade has grown bigger and bigger. By the end of 1994, his company had achieved a turnover of US $30 million.

"Foundry"

The latest headquarters building of Bao Shi is located on the east Wang Road of Suzhou Industrial Park. It is noticeable outside the park, and is different from the surrounding buildings. The first floor of the building is decorated with bright orange.

The building was designed by famous designers in Italy and built in accordance with China's Samsung standard and LEED Platinum Award.

This garden style building has five floors, a large green field around it. The solar panels on the south side are glare in the early summer sunshine. These PV panels are installed on more than 3500m2 external walls, generating 35% of the total electricity output per year.

Next to the headquarters building is a factory in Suzhou. Today, Bao Shi is still doing a small number of high-end products.

But in 1995, just as the power tools foreign trade business went smoothly, Gao Zhendong decided to make a transition to manufacturing industry. He has been engaged in the trade for many years, and understands that trade itself does not create value, nor does it necessarily support the long-term development of a company.

After the transformation, Bao Shi invested a 800 square meter electric tool factory. At that time, there were about forty or fifty employees in the company, but Gao Zhendong was not ambitious. He worked out a hundred person plan for the company. Today, Bao Shi has 4000 employees worldwide.

At that time, China's manufacturing industry mostly used low price as a means of competition. Gao Zhendong's transformation path was not smooth at this initial stage. In the first three years, Bao Shi continued to lose money until OEM business began to improve.

Bao Shi was engaged in OEM business in 1997. Because of its high quality and low price, Bao had sold about 700000 units in that year, 5 times more than the original expected sales volume.

Gao Zhendong said that from the very beginning, Bao Shi had to take a road of differentiation with his competitors. Under the trade-off between cost and quality, he pays more attention to product quality. Relying on the reputation of product quality, Bao soon became famous in the field of electric tools and foundry industry, and many international famous brands began to find it.

Gao Zhendong still remembers the first time he worked with Black & Decker, a world-renowned electric tool company (BLACK&DECKER). Founded in 1910, Black & Decker has become one of the largest market players and manufacturers in power tools, metal fittings, household appliances, plumbing and building products.

In 1997, Black & Decker looked for a factory in the country for a product. When the domestic rival offered a price of 12 US dollars, the price was $21. In the hands of these competitors, there is no lack of strength, and a joint venture with Hitachi from Zhejiang has quoted a price of $19, becoming the biggest competitor of Bao Shi.

In the end, Black & Decker chose Bao time, but only if it had to drop $1 on the $21 offer, the cooperation between the two sides began. In 1998, Bao Shi officially became Black & Decker's first OEM/ODM supplier in China.

Besides Black & Decker, Bao Shi is also the first factory in China to make OEM for BOSCH. At that time, in the field of electrical tool industry, Bao Shi was the most popular.

A person engaged in the power tool industry said that Black & Decker and BOSCH had high requirements for product quality. At that time, many foundries in China were hard to achieve such high quality.

"We have won a number of the first in the field of OEM in the field of electric tool industry, the first one to make OEM for Black & Decker, the first one to make OEM for BOSCH. Many of the world's leading brands of electric tools in China are first to cooperate with us. Gao Zhendong said.

The Black & Decker foundry has to open the door for more global top players. But its honeymoon period with Black & Decker has lasted for less than two years.

Like many multinational companies, Black & Decker also looks at China's cheap labor force, plus China's entry into the WTO, which has decided to invest and build factories in China to reduce production costs. Black & Decker's Suzhou company officially opened in February 1998, and its factory was built in second years.

Although the proportion of foundry in Black & Decker's business layout is very small, but in the treasure time to build a factory on the side of the bed but let Gao Zhendong deeply touched. For the first time, he felt that OEM was not so reliable.

Black & Decker's construction in Suzhou did not cause too much impact on the business of OEM. In addition to the influence of Black & Decker's OEM business, other orders came in a rush, and the scale of the OEM was increasing.

In fact, two or three years later, the cost of products produced by Black & Decker at Suzhou plant is still not comparable to that of the foundries. "In manufacturing, it has never been cheaper, only cheaper, which is the problem of OEM." Gao Zhendong said.

At that time, Bao Shi's OEM price could be $12-13, and now the price is even lower to $8. Lower and lower costs eventually made Black & Decker have to go back to treasure when it had to be OEM.

"Secret layout"

Black & Decker's construction in China stimulated Gao Zhendong's nerve to build his own brand. Gao Zhendong acted decisively, but he acted cautiously. Like last time he made a transformation decision, Gao Zhendong firmly believed in the way to make his own brand product.

In 1999, Bao Shi had put forward the brand strategy development plan. At that time, the company's foundry business was in full swing. Sacrificing the OEM business to make its own brand strategy was hard for many executives to accept.

"If you make your own brand, it means putting yourself on the opposite side of all the customers. After all, these giants are competitors, which is indeed a great risk." Gao Zhendong said.

For this reason, individual executives chose to quit their job because they did not understand Gao Zhendong's decision. To this day, Gao Zhendong still takes care of his colleagues who left office, and subcontracts some OEM business to the other side.

But in the specific implementation, Gao Zhendong did not make bold progress, but did the foundry business side by side, and began to quietly layout. In 1999, Bao Shi had set up a branch office in the United Kingdom, thus starting the layout of the global overseas marketing network. Since then, the United States, Australia, Germany and other sub companies have been established.

While overseas layout, Gao Zhendong expanded production capacity through acquisitions and new production bases in China. Bao Shi first acquired the Zhangjiagang Si Ge machinery and equipment manufacturing Co., Ltd. as its desktop tool production base, and later established a production base in Shandong and Anhui, and all the products were exported overseas.

Those familiar with Gao Zhendong said that the way Gao Zhendong set up branches overseas is in fact opening up its own brand for the future. The specific method is to produce their own brands for the European home decoration chain store by OEM for BOSCH and Black & Decker.

"Because they are their own brands, these chains will, of course, push their products and put them in the best place in the store. The quality of these products is the same as those of BOSCH, Black & Decker and other brands, but the price is much lower, and consumers are certainly willing to buy them. The above-mentioned electric tools industry insiders said.

At the same time, Gao Zhendong will study the market carefully. Once found unreasonable, Gao Zhendong will do research and development immediately. For example, some electric tools must rely on the vibration of the equipment, such as sanding tools, to be polished and polished by vibrating sand paper placed on the floor, but high frequency vibration is harmful to the human body.

After that, we conquered this shortcoming and created the active vibration elimination technology, which transferred the harmful vibration on the operator's hand to the working parts, which not only increased the work efficiency, but also reduced the harm to the human body.

Counter attack

In Baoshi's product experience hall, such a "movie" circulate. The film imitated scenes in Smith and his wife. The leading actors and heroines in the film kept making various difficult shooting positions. But in fact, they were holding a product named "WORX D electric screwdriver".

This is a product Promo made by Bao Shi.

This product is very much like an enlarged version of the revolver. It concealed 12 common batches through the magazine design, and realized the fast switching in the use process, making it convenient for consumers to use. Compared with conventional electric screwdrivers, Bao Shi's sales increased by 10 times.

The product represented by "WORX D electric screwdriver" is the foundation of Bao Shi's own brand. After completing the layout of terminal marketing network, Bao Shi formally launched its own brand "WORX Wake" in 2004 after 6 years of brewing.

In the preparatory stage of the brand, Bao Shi once had a OEM order for an important overseas client, but was rejected by Gao Zhendong. "Because this will disrupt the rhythm of our own brand." Gao Zhendong said.

Many customers are threatening to withdraw their orders when they know that the former foundry has launched their own brand. "At that time, our attitude was that if you wanted to withdraw the bill, you would cancel it." Gao Zhendong recalls. This year, the OEM business of Bao time has shrunk dramatically, and annual sales have dropped by US $50 million.

In the sphere of influence of BOSCH and Black & Decker, boytime's own brand products have also been resisted by these giants. They will threaten dealers, and if they sell products, they will be disqualified. In addition, competitors will use the patent war to squeeze out the treasure.

At this time, Gao Zhendong's painstaking marketing network has played a role. At first, because of the good relationship with the local Jiezhuang chain supermarkets, Bao Shi's products were sold together on the shelves of their brand products and gradually recognized by consumers.

Because of the more profit given to dealers, some brand dealers who are not allowed to sell their products are secretly trying to popularize their products.

"The most important part of this is the product. Consumers think it is cheaper and at the same time better use, he will use your product, blind worship big brand era is over." A brand expert told reporters.

In addition to the four beacon fires in the European market, Bao Shi also burned the war to the United States. In 2006, Bao Shi bought the Rockwell brand of electric tools in the US for millions of dollars.

The brand was founded in 1945, and the name "Rockwell" is more related to the world's largest company devoted to industrial automation and information.

Although the brand is moving towards aging, Rockwell electric tools brand is still widely known in the United States. According to the survey of third party organizations in the United States, Rockwell electric tool brand still has 74% popularity in the market. With the influence and channel of Rockwell, Gao Zhendong also introduced his products into the US market.

In order to expand its influence and sales volume, Bao time has taken the way of TV shopping. Consumers do not have to go to the physical store. They only need to make a phone call to purchase Rockwell and power tools. "American consumers still believe in TV shopping. They only need to make a phone call at home."

Today, Bao Shi's products have been settled in world-famous retailers such as Lowe's, Ou Beide (OBI) and B&Q (B&Q). In April 2011, the products were stationed in OBI, the largest DIY retailer in Germany.

According to data from GFK, a famous European research firm, the average selling price of the products sold by Bao Shi is 2.5% higher than that of the famous European brands, and its direct current products are 12.4% higher. The wake brand has become the highest price brand in the European DIY market.