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What is the knowledge of business decision?
The so-called commercialization: for the success or failure of enterprises, we should not only support and question, but also marvel and accuse, and more importantly, explore the real motivation and logic after all kinds of rhetoric. To sum up, you will find that success or failure depends on the business model.

There are some necessary factors for an enterprise to survive: capital, manpower, products, market, business model, technology, trade and so on. But among the factors that determine the success or failure of an enterprise, the business model should be the first. Business model is the core logic for enterprises to create value. That is, the internal activities and capabilities required by an enterprise to achieve its established financial goals in a specific environment. It is a systematic design to measure and establish the health and profit of an enterprise.

The success of business model has created many great enterprises. The most classic business models in the last century should be Wal-Mart and Microsoft. The business models created by these two enterprises have made two great enterprises, giving full play to the wisdom of human beings in creating business models.

China entrepreneurs are becoming more and more aware of the business model. Jiang Nanchun was deeply touched. At that time, when he faced Chen Tianqiao's success, he had such an inner monologue: "Life is like a journey. On the way, I saw a big bus with many people on it. It must be a good industry, so I rushed up. Being young and strong, I pushed many people aside and finally grabbed a window seat. Since then, I have a name in the Jianghu and a position in the industry. But Chen Tianqiao didn't get on the bus. He walked on and soon found a purple Ferrari parked on the side of the road. He opened the car door and left as soon as he stepped on the gas pedal. "

This is the time when Jiang Nanchun was deeply touched by Chen Tianqiao's great success. He began to realize that "only by exploring business models that others have not discovered can we make big money!" Not long after, Jiang Nanchun found his own "Ferrari"-to build a focus empire to build video advertisements.

China Business Review, which aims at studying China's local economy and promoting enterprise management practice, first advocated the concept of business model in China. The first selection was launched in March 2005, and after a year of careful preparation, the "Best Business Model Selection for 2005-2006" will be launched, with a rational attitude and in-depth analysis to explore the logic behind the success of China enterprises.

Starting from this selection, authoritative business schools or consulting companies at home and abroad will take turns as the rotating chairman unit to provide intellectual support. Cheung kong graduate school of business will be the rotating chairman of the best business model selection in 2005-2006.

In this activity, 30 authoritative experts and scholars and 25 top consulting companies will participate in the evaluation and case study.

Eight years is a moment for some people, but a long time for others. A private enterprise that has only survived for 16 years in China, but it will take eight years to break away from the industrialization model on which it became famous. This may be a difficult course that every China manufacturing enterprise must go through in industrial upgrading.

In constant innovation and questioning, Shanshan understands what is change and persistence, and what is accumulation and precipitation. "In my mind, clothing is the core industry, and technology and investment are the two wings. It should be said that I have the deepest feelings for clothing, and I am an investment decision-maker in other industries. Other industries besides clothing make money, but they just laugh. " Zheng Yonggang, who has been struggling for the cause of Shanshan for 16 years, explained his understanding with simple words. It is not easy for an enterprise to grow up in the transforming China business community. In the past eight years, Zheng Yonggang and his "Shanshan" have been controversial.

Even Zheng Yonggang called himself "a person who likes to make things out of nothing". In the early1990s, he initiated the mode of "one-stop production, supply and marketing" and built the largest direct sales network in the domestic clothing market in China at that time. He listed Shanshan 1996 and became the first A-share listed company in China garment industry. In the same year, he hired two of the most famous designers in China? Ah, amine insurance? Oh? Park prion? α? Kind? A bunch of cherry blossoms? 1999 carried out "production stripping" and "channel reengineering" drastically, and changed all the original self-operated sales channels into franchise mode; Since its headquarters moved from Ningbo to Shanghai, Zheng Yonggang has set foot in diversification and invested in lithium-ion battery materials unrelated to clothing; 200 1, Shanshan started the "Nike-like" mode of "multi-brand internationalization" operation in addition to the core brand suits. ...

Such a leap-forward development has puzzled outsiders. With the disappearance of the LOGO of Shanshan suit from the high-end shopping malls in big cities, a number of new brands have quietly emerged in Shanshan Department, and the "Shanshan phenomenon" has even become a topic of management.

In our view, "Shanshan Phenomenon" is indeed enough to become a management topic, but it is not because of the decline of the market share of this once dominant player-we find that the changes in Zheng Yonggang and Shanshan, which began eight years ago, are exactly the same topic faced by many industrial enterprises in China today: how to upgrade the traditional manufacturing industry and move along the so-called "smile curve" value chain to the higher-end "producer service industry" that Wu Jinglian said? For an enterprise whose main business has a glorious history but is too mature, where can we find a more growing "second main business" to avoid the profit risk brought to the enterprise by the life cycle of the original single main business? Besides relying on the labor cost and the sales staff's strategy, how should China enterprises establish their own brands and go beyond the lock-in of OEM system? What painful changes need to be completed in organizational structure, internal management, strategic decision-making, implementation mechanism, corporate culture, performance appraisal, talent replacement, etc. When a traditional enterprise is transformed into a modern international company?

For several years, Zheng Yonggang has been thinking about the problems faced by most China entrepreneurs today; Shanshan's groping road provides a precious case for her peers. Therefore, this print tries to restore Shanshan's changing practice in the past eight years through detailed interviews, get a glimpse of the fate and exploration of this China enterprise in the past eight years under the economic climate change, and also show some possibilities for the wider China business community to move towards the future.

In the past 2005, Shanshan ushered in a bumper harvest: revenue exceeded 8 billion yuan, clothing sales increased by 25.8%, and profits increased by 59%, far exceeding the scale of Shanshan's single clothing brand at its peak. Zheng Yonggang said that he was relieved, but it is too early to say whether it will succeed. For the market-oriented enterprises with a history of only 20 years at most in China, the only way to survive in the increasingly changeable and complicated competitive situation is to keep innovating, just like Shanshan's corporate slogan: "Let's change resources".

Eight years ago, Shanshan was a miracle with boiling blood for Ningbo people. Today's Shanshan is more like history. At least, in the streets of Ningbo with modern urban style, this is the case.

In the spring of March in Ningbo, there are five street shops such as Lecoq, Azzali and Renoma in the lively OCT, and three famous French and Italian brand shops are dazzling and luxurious. In contrast, the Shanshan suit shop next door is a bit ordinary.

"After 10 years, Shanshan seems to be very busy, but her reputation is really not as good as before." A local on the street told reporters.

"It's no wonder. Outsiders can only see the surface. For Shanshan now, layout is more important than fame. " After listening to the reporter's report, Zheng Yonggang smiled and was in no hurry.

"The five brands with different positioning that you saw in OCT are all controlled by Shanshan Group." Zheng Yonggang, Chairman of the Board of Directors of Shanshan Investment Holdings Co., Ltd. said, "This is the layout, the mature international experience, and the result of our continuous learning from others and changing ourselves from 65438 to 0997."

Such a scene can indeed be found on the Champs Elysé es in Paris. This famous fashion brand street is lined with different brands of high-end clothing and luxury stores, and quite a few of them belong to a group-LVMH. The world's top fashion group was founded in 1987, with more than 50 top luxury brands, including Louis Vuitton, ChristianDior, Givenchy, Ji Xue, Fendi and other brands with a history of 150 years.

"10 years ago, we were able to monopolize 37.4% of the clothing market in China with a trick of' one-stop production, supply and marketing'." Zheng Yonggang told Businessweek, "But today we must learn the complex thinking in the international fashion industry."

"We are going to be silent for another 3-5 years and do things in a down-to-earth manner. By then, Shanshan and all domestic clothing enterprises will be' harmonious but different'. " Zheng said to him. 16 years ago, as the vice chairman of Shanshan Holding Company and the president of Shanshan Group in charge of clothing, Zheng and Shanshan family jointly built Shanshan brand.

In Zheng Yonggang's view, Shanshan is no longer on the same level of all domestic clothing enterprises. Compared with eight years ago, Shanshan has quietly changed beyond recognition.

The glory of the shortage era and the silence of the surplus era.

The arrogant Chinese fir has become calm, but the perspective and standard of external observation of Chinese fir have rarely changed over the years.

"People are still used to looking for old Shanshan suits before 16." Zhou Fenfen, vice president of Shanshan Investment Holding Company, said, "In fact, Shanshan Holding Company's sales revenue this year is more than 8 billion yuan, of which clothing only accounts for 1/3, and Shanshan suit only accounts for 8- 1 100 million yuan."

The origin of Chinese fir began at 1989. At that time, Zheng Yonggang took over a small local factory on the verge of bankruptcy-this enterprise named Ningbo Yonggang Garment Factory was the predecessor of Shanshan Group.

Shortly after taking over, Zheng Yonggang saw a young man wearing a fashionable and free suit when he was on a business trip by train. He asked curiously and learned that it was "clothing waste" imported from abroad. This kind of "junk suit" not only keeps the traditional suit stiff, but also is very light and soft.

Inspired by this "junk clothing", Zheng Yonggang immediately organized technical forces to develop new suits after returning to Ningbo. Different from the heavy and stiff style of traditional suits, Shanshan suits were widely praised as soon as they came out. The slogan "Shanshan suit, don't be too chic" also appropriately pointed out the unique consumption selling point of Shanshan suit at that time. Zheng Yonggang also pioneered the mode of "one-stop production, supply and marketing". By 1992, Shanshan had built the largest direct selling network in China's domestic clothing market at that time. During the period of 1997, the annual sales revenue of Shanshan suits was 2 billion yuan, ranking first in China clothing market for seven consecutive years, with a market share of 37.4% at the peak. From 65438 to 0996, Shanshan Co., Ltd. (600884) became the first A-share listed company in China garment industry.

Today, eight years later, how do brilliant founders evaluate this Shanshan suit? "At that time, the fame and money it brought to Shanshan could buy a luxury car every day, one a day for four or five years"; "It is an industrialized brand in the era of shortage economy, positioned at 18-60 years old, regardless of consumption level"; "Without design elements, the understanding of brand concept is not perfect"; "One-stop mode, poor professional division of labor, has not adapted to the changes in market segmentation"; "In order to maintain the income of 2 billion, the inventory must be 800-900 million, which is a time bomb".

These views from different angles, especially the following words "Wang" and "Wei", began to appear in 1996, which attracted Zheng Yonggang's attention.

"Zheng Yonggang is a person who likes to challenge, change or surpass himself. It can also be said that he has a strong sense of crisis. " Zhou Fenfen said. Zhou He has known each other for many years, and he is well aware of the personality characteristics and hard road of the godfather of China clothing industry.

Although the sales revenue at that time was still loaded with cars, Zheng Yonggang felt the coming rain from a series of details: the inventory was too large; The advance payment didn't come; Terminal sellers who used to listen to manufacturers' pricing or even queue up to pull goods demand price negotiation; Homogeneous competitors began to appear, and they also began to advertise to introduce technical talents; The most important thing is that the gross profit has dropped from about 30% to 12%. ...

"The era of shortage has passed and the buyer's market has arrived." Zheng Yonggang's strategic judgment is extremely accurate.

He began to consider getting rid of the previous industrial production mode from the aspects of sales network and design. "In the era of industrialization, the production and sales of clothing are mainly reflected in the expansion of quantity and the reduction of cost, while ignoring the brand-new connotation that real clothing design brings to products." Zheng Yonggang concluded in an internal speech at that time, "Why change the old model? The one-stop mode of production and marketing must have a premise: the market demand is large and how many goods are sold. Once the market demand slows down, channels are no longer channels, but' warehouses'. Just like a city's transportation system once there is a problem, streets and roads become temporary parking lots. "

At that time, Shanshan had 26 branches, more than 30 offices and more than 6,000 salespeople in direct stores all over the country. "Direct stores use Shanshan's money to buy Shanshan's products and then sell them to Shanshan." Zheng said, "actually, this is not a sale, it can only be regarded as a warehouse transfer." Everyone is willing to purchase more goods, and it doesn't matter if they can't sell them, resulting in high operating costs and serious inventory backlog. "

As the creator of this model, Zheng Yonggang recalled to Business Weekly: "In order to make the garment enterprises bigger, considering the unique shortage economic situation in China at that time, I took the lead in introducing the integration model of production, supply and marketing in the garment industry. In fact, there is no such practice abroad. "

From 65438 to 0999, Shanshan's network transformation aimed at crushing "private enterprise public ownership" began to be carried out drastically, and all direct stores were cancelled and changed to join. Zheng Yonggang emphasized that franchising is the only way out for China and even the global clothing industry. He mobilized: "Shanshan has created a group of millionaires in the past, and after implementing the franchise plan, another group of multimillionaires will be created in the next five to 10 years."

Shanshan's franchise stores are divided into two levels, one is the regional head office, and the other is the subordinate specialty store. Whether it is the relationship between Shanshan enterprise and regional head office, or the relationship between regional head office and specialty store, it has become a contractual relationship in sales. The franchisee system successfully solved the problems of adverse selection and moral hazard in the principal-agent relationship of the original direct stores. The inventory discount originally belonging to Shanshan was transferred to the franchise store owner, and those direct stores that had underreported sales and accumulated inventory in order to give discounts to the headquarters the following year have already revealed their true colors. For newly opened franchisees, Shanshan will distribute goods and open stores in the form of installment or loan. From owing goods to owing money, it also means that the profits and risks of Shanshan's commodity business and sales have been shared by manufacturers and franchisees from Shanshan alone.

Soon, the inventory bubbles accumulated in Shanshan 10 years were all squeezed out at one time. The time bomb that threatened Shanshan disappeared and hundreds of millions of dollars were recovered.

However, while the franchise system has achieved initial results, the negative effects have also appeared. Shanshan lost her position as the leader of the suit market. In the interview, Zheng Yonggang also reflected on this: "This network transformation has solved the problem of ownership, but because it is the first time for a large clothing enterprise to franchise in China, there are indeed many ideas and policies that are still being explored. Criticism or criticism? I will not take the initiative to comment. I insist that what suits me is the best. "

"Gone forever is the era of shortage economy, which always reminds China's clothing merchants. 1999 after the transformation of Shanshan channel, local enterprises in Fujian and Zhejiang, including Ningbo, followed suit. " Zheng Yonggang firmly believes that what Shanshan has done is what the whole industry will do in three to five years. He said, "Shanshan has provided forward-looking practice for the industry, reflecting the role of leading enterprises and helping the industry to move closer to the international level in industrial upgrading. I am very pleased with this. "

As for the current market share of Shanshan suit, Zheng Yonggang thinks it is not too low, but too high. "During the period from 1988 to 1999, the share of Shanshan suits was as high as 37%, because Shanshan just started to make brands and was almost in a state of no competition." Zheng Yonggang believes that with the increase of brands, the decline of share is an inevitable law. "Being a brand should not pursue quantity. For example, top brands such as LV and Armani only supply a small number of people, and it is enough to open three or five stores nationwide. For example, the Italian high-end brand Macro Azzali we operate is enough to open 100 stores nationwide. " Therefore, he thinks that it is enough for Shanshan suit to open 500 stores with sales of 654.38 billion yuan. "More is not a brand, it is time to enter the wholesale market."

Repeatedly understand what a brand is.

Almost at the same time of channel reengineering, Zheng Yonggang directed Shanshan to carry out another far-reaching change: brand operation.

The purpose of brand operation reform is also very clear, which is to increase the diversity of products and design elements for market segments to enhance the brand's gold content and fashion sense.

At first, Shanshan seemed to understand brand operation as a leap from large-scale industrial products to design products.

"Design is the soul, and the designer is the carrier of the soul. Let the soul return to its original position. I have no doubt that the era of designers in China has arrived. " This was the slogan that Zheng Yonggang shouted at that time, and it was also the first time that China clothing industry put forward the idea of independent innovation.

Some people say that the history of clothing is 3500 years for human beings to show off themselves. Different from the west, China's clothing culture was cut off by history, and there was no fashion designer until the end of1980s. "Compared with Europe and America, there is a cultural gap in China's clothing. Compared with international brands, China's national clothing industry lacks design art and culture. " Zheng Yonggang said. He has long known that the suits produced by Shanshan factory are made of the same fabrics, the same workers and the same machines. Some top international brands can sell for 10 thousand yuan, while the trademark of Shanshan can only sell for more than 2 thousand yuan.

As early as 1996, Shanshan began to unite famous brands and famous teachers. This is the first time that domestic clothing enterprises and designers have joined forces. At that time, Zheng Yonggang hired two of China's most famous designers, Zhang Zhaoda and Wang Xinyuan, to Shanshan with an annual salary of 6,543,800 yuan each, trying to design the best fashion women's dress "Fa Han Shi" in China. At 1997 Shanshan Autumn and Winter Exhibition, two designers showed more than 200 sets of clothes of 17 series. In April, 1998, Wang and Zhang launched a national touring exhibition with the theme of "not me, but the wind", which caused a sensation.

Since then, French and Korean poetry women's wear and Van Gogh men's wear have become the original brands created by Shanshan according to the international high-end ready-to-wear concept and quality. At that time, Shanshan was very confident in these two designer brands-because they not only had excellent designers, but also managers with deep business management skills. At the same time, Shanshan also sent technical backbones to Japan and Italy to study in batches, bringing the quality culture of foreign companies back to Shanshan. Even Shanshan has set up her own design studio in Paris, fashion capital of the world.

The transformation of Shanshan promoted China clothing to enter the era of "design brand" from the industrial age. However, this landmark experiment, which promoted the development of China's clothing industry, gave Shanshan a second thought.

Zheng, then general manager of Shanshan Fashion Design Department, recalled with a smile: "Designers in China are more like' politicians' in the design field. They only work in the enterprise for more than one week a year, and they are busy with lectures, performances and competitions at other times, but they are not as creative as foreign professional designers. "

Shanshan's brand cultivation period is generally 3 years, that is, it requires a loss of one year, a flat two years and a profit of three years. However, after the expiration of three years, the two high-end brands, Fahanshi and Fanshang, failed to achieve the expected goals, and the two original brands had to be transferred.

"Where do famous designers come from? Only the process from designing products to becoming brands. Designers who don't have their own products are sad. " Zheng said to him.

There is no way to establish a designer brand, so Shanshan has to look around the world. Starting from 200 1, this company has embarked on a more effective brand road from the market practice-"multi-brand internationalization", that is, through cooperation with international brand companies, to promote its original brand. At present, in addition to the core brand "Shanshan", Shanshan Group directly controls 22 brands, including 3 self-created brands, 9 internationally registered designer brands and 8 international cooperative brands. The incubation period of each brand is 3 years.

In the practice of "multi-brand internationalization", Shanshan's understanding of brands has been sublimated again. "We are brand operators now. Shanshan, like Nike, Louis Vuitton and Itochu Trading Co., Ltd., invests and holds many fashion brands with capital as a link, but we hand over the operation of each brand to a specific brand company and the production link has also been stripped. " Zheng Yonggang said, "What we are doing now is how multinational companies make money."

But Shanshan has not given up her dream of building an international fashion brand. "We cooperate with international brand companies not only to make money, but also to learn from others and cultivate our own designers and management talents." Zheng said, "Being unknown means that he didn't participate in the awards. His professionalism is stronger and his market vision is more plastic. "

Zheng Yonggang doesn't want to predict how long it will take to achieve this ultimate goal, because the history of product manufacturing can be completed by compression, but the cultural connotation can't be compressed. "It must be admitted that for a long time, it is impossible for China's cars and clothing to become top international brands. Because the real fashion design in China is only 20 years, from extensive products to fashion, this qualitative change process has been used in France for nearly 100 years and in Japan for 50 years. Clothing brands contain culture and history. " Zheng Yonggang believes that China culture will become the mainstream culture in the world, but he firmly believes that "with the improvement of economic strength, China will have a worldwide popular brand, just like American polo and CK".

Companies without products and assets without depreciation

By 2004, Shanshan's main clothing industry and other emerging industries were in a period of adjustment, with little income growth, but the profit rate was improving. Taking Shanshan as an example, its net interest rate in 2000 was 16%, which was lower than the industry average 18%. By the third quarter of 2004, the net interest rate of Shanshan was 12%, which was much higher than the industry average net interest rate of 4%.

In 2005, Shanshan finally ushered in a bumper harvest: clothing sales increased by 25.8% and profits increased by 59%. In terms of numbers, it far exceeds the scale of Shanshan's single brand at its peak. Science and technology, investment and other fields have also begun to blossom in an all-round way this year. "We won an all-round victory." Zheng Yonggang said.

Zhou Fen, vice president of Shanshan Investment Holding Company, said, "It's like a seedling cultivated in a hotbed. Transplanting into the ground will definitely shrink, but only after transplanting can it grow into rice. "

If Ningbo, the birthplace of Chinese fir, is a hotbed for cultivating Chinese fir, then Shanghai, the current headquarters, can be regarded as a rice field with a bumper harvest of Chinese fir.

At the end of 1990, Shanshan's radical channel reform and brand operation model experiment put forward new propositions for Shanshan's decision-making ability and strategic thinking. On the one hand, the revenue of Shanshan suits declined and the market scale shrank; On the other hand, the original accumulated hundreds of millions of funds still have nowhere to invest. At this time, there are only two ways to develop: specialization and diversification.

"There is no right or wrong in these two directions. You can only choose one." Zheng Yonggang said, "It stands to reason that the clothing industry can develop upstream and downstream and extend the industrial chain, but judging from the situation at that time, this road went very slowly. Moreover, once you choose specialization, it means sticking to Ningbo, which is contrary to the internationalization and modernization goals put forward by Shanshan in his early years. "

1999 65438+ 10, Shanshan group moved its headquarters from Ningbo to Pudong, Shanghai. Zheng Yonggang said, "Shanghai is a sea. When we swim with sharks in the sea, we will grow faster. "

However, not every veteran entrepreneur in Ningbo Shanshan has the opportunity to swim with sharks. "There are only a few Shanshan people who came to Shanghai from Ningbo with me." Zheng Yonggang told Business Weekly, "When an enterprise is small, it can do whatever it wants, but when it reaches a considerable scale, its operation must be specialized, which puts higher demands on the talent structure."

It's hard to say whether Zheng Yonggang knew this long ago, but as early as 1996, Zheng Yonggang made equity arrangements through the capital market, which successfully solved the problem of the distribution of interests and the retention of Shanshan entrepreneurs.

Shanshan shares 1996 listed. According to the national policy at that time, there could be employee internal shares, which were allowed to be listed after three years. "We have 300-400 old employees who are worth hundreds of thousands or even millions at once." Zhou Fen, vice president of Shanshan Investment Holdings, said.

While the elders stayed in Ningbo, Xinrui began to take on heavy responsibilities. Hu, the 3 1 year-old vice president of Shanshan Group, surfaced at this time. Hu, chairman of Zhejiang University Graduate Association, worked as an executive in the Asia-Pacific marketing department of Procter & Gamble in his early years.

After the headquarters moved to Shanghai, Hu was appointed as the president of Shanshan Technology Company, whose main responsibility was to build Shanshan's high-tech sector with the help of Shanghai's policy advantages and human resources. From 65438 to 0999, Hu introduced the first high-tech project-the industrialization of carbon anode materials for lithium-ion batteries, which belongs to the national 863 plan development project and fills the domestic gap. At present, Shanshan Technology Co., Ltd. has developed into the world's largest comprehensive material base for lithium batteries.

Walking on Wan Li Road with light feet, Shanshan began to run wildly on the high-tech road. At present, Shanshan has four national 863 projects, including 18 micron copper foil material, lithium ion anode material, heat shrinkable material and high temperature pressure sensor. In addition, it also has 9 high-tech projects, such as bio-aerobic bacteria garbage fermentation, nano-surface electric heating materials, supercapacitors and Oswan materials. Shanshan Group has invested about 654.38 billion yuan in high-tech fields, and there are nearly 20 high-tech companies.

In August, 2004, Shanshan Investment Holding Co., Ltd. was established and all Shanshan enterprises were reclassified. The holding company controls more than 50 companies including Shanshan Group, Shanshan Technology Group and its subsidiaries, and is the highest representative of Shanshan enterprises. The board of directors of the holding company is the highest decision-making body, and there are two committees under the board of directors: investment decision-making and strategic development.

To put it simply, Shanshan Investment Holding Co., Ltd. is an enterprise * * * company composed of all the wholly-owned, holding, shareholding and entrusted management of intangible assets under its name. Asset relationship is the basic production relationship of Shanshan enterprises, and the three-level structure of "holding company-industrial group-industrial company" is the basic organizational structure. The current structure is that the holding company manages Shanshan Group, Shanshan Technology Group, Shanshan Biological Group, Kechuang Economic and Trade Group and Songjiang Copper Group.

The responsibilities of the three-tier structure are different. Holding company has the right of investment decision-making, personnel management and investment income, and is the strategic investment decision-making center of Shanshan enterprise; Industrial group has executive power, management power and coordination power, and is the management center of Shanshan enterprise operation; All industrial companies enjoy the right to operate independently and are the profit and cost accounting centers of Shanshan enterprises.

Under this framework, Shanshan Holdings, which is directly managed by Zheng Yonggang, does not involve specific products. "As an investment company, its products are an enterprise and a talent." Zhou Fenfen said.

After the framework of holding company was established, the state-owned enterprise MBO, which improved its efficiency by changing the property right system, gave Zheng Yonggang greater enlightenment. He once again introduced the principle of confirming the right into enterprise management, and matched the shares at the second level of Shanshan's enterprise structure, that is, the industrial company level, which Shanshan called "federalism" internally.

Zheng Yonggang divides the enterprises controlled by Shanshan Holdings into ABC three categories according to their shareholding ratio. The operators of these enterprises, big or small, are all bosses and own shares in the operating company. Take Shanshan Technology Company as an example. President Hu personally invested 6 million yuan to buy 25% of the shares, and the holding company rewarded him 15%. Hu actually holds 40% of the shares of the technology company.

"This is my design." Zheng Yonggang told Businessweek with a little pride. "Everyone is unyielding." He said, "If you always work for others, the incentive mechanism is definitely not enough. Operators do not contribute their own funds, and all of them are rewarded with equity, which is over-incentive. "

Except for holding companies without products, brand assets that will not depreciate and will increase in value over time are becoming more and more important in Shanshan. This is another important step for Shanshan to get rid of industrialization.

After the sales were changed to joining, the output of Shanshan began to slim down. At the beginning of 2002, Shanshan withdrew from the field of clothing production and processing. The controlling rights and specific management rights of five garment processing factories previously established by Shanshan in Ningbo were all transferred to foreign companies or individuals. At this time, with the help of processing outsourcing and franchisees, Zheng Yonggang completely separated Shanshan from production and marketing.

According to reports, at present, only half of Shanshan Group's clothing is produced by its own factory, another 30% is produced by other domestic factories, and the other 20% is processed abroad. "We have partially achieved global procurement and global ordering. Where to do well, do it there. " Zheng said to him. At present, countries that produce and process garments for Shanshan include Japan, South Korea and Italy.

After leaving industrialization, Shanshan focused on the "core value" link of the clothing industry-the brand with "federalism", that is, promoting independent brands through international cooperation. The current cooperation has brought great confidence to Zheng. "After two years of study, the period of rapid improvement of original brands will come. In 2007, we will start to increase investment. " Zheng said.

At the same time, Shanshan also authorized the transfer of its mature brands. In 2005, Shanshan Co., Ltd. benefited a lot by authorizing the operation of Shanshan denim clothing and Shanshan underwear.

"The era of defining enterprise value by the number of fixed assets such as factories and machines is out of date. What we value is intangible assets that will not follow the depreciation of fixed assets. " Zheng Yonggang said.

The operation of the enterprise is the most important.

Brand building is not an end, but a means.

Zhang Chunjiang (Managing Director of Zhejiang Zheng Qi International Business Consulting Co., Ltd.)

Almost all enterprises in China can realize the importance of brand, which includes both company brand and product brand. However, this importance has been repeatedly emphasized and exaggerated.

In the thinking of many enterprise decision makers I have contacted, the meaning of brand has been promoted to a very high level in enterprise strategy. Many decision makers in domestic enterprises have been misled by the statement that enterprises operate to build brands.

In contrast, Shanshan put forward the brand management slogan of "multi-brand, internationalization", which can be used as a reference for the traditional view, that is, operation is the purpose of enterprises, and brands are only tools-even very important or key tools.

Judging from Shanshan's brand operation means, it can be clearly felt that brand, as an effective tool, is one of the means of enterprise operation and serves for enterprise operation. In fact, although brand is very important for enterprises, and brand competition is the concentrated embodiment and final destination of market competition, from the perspective of enterprise operation, enterprises must first be profitable and survive.

We know that brand building needs rich experience and practice. For companies with a history of only over ten years, brand tools should be applied to the extreme.