Chapter 11 2. Put on the most suitable shoes: take the road of specialization

Any success is a process of refusing temptation. The standard of a good entrepreneur is how to make the enterprise a permanent enterprise.It is impossible for the industry to go bankrupt, and only enterprises will go bankrupt. Since the end of the 20th century, the competition among Chinese enterprises has experienced three major trends: price wars, diversification, and internationalization. Enterprises are like flat boats in these waves, drifting with the wind and unable to sustain themselves.Among the many domestic enterprises, Gree definitely belongs to an enterprise with personality. Because of this personality, although Gree cannot be said to be independent and superior to the forest, it can be said that because of this persistence and dedication to the industry, Gree has possessed More calm.

What makes many colleagues sigh is that Gree can always keep enough calm in the face of many so-called industry opportunities.As a colleague in the air-conditioning industry said: "They are so rich and have such an excellent team, but they are the only company in China that specializes in air-conditioning." , the year's sales ranked first in the industry.But Gree is also facing two completely different prospects: either to diversify and have other sources of profit when the price war empties its pockets; or to implement specialization and resist the competition of the whole industry by itself.Diversification or specialization used to be a topic of endless discussion among Chinese companies.On the issue of diversification or specialization, Gree Electric also had a difficult choice.Faced with the question of whether the air-conditioning industry is "saturated", Gree finally made a decision through investigation and research: it cannot easily carry out strategic transfer.While many enterprises in China have chosen the road of diversification, Gree once again embodies its unique management thinking: specialized management.Gree has constantly encountered the temptation of diversification. Many companies that produce refrigerators, color TVs, and washing machines have come to them on their own initiative, hoping to put the Gree brand on them, or asking Gree to merge them, but Gree refused.Dong Mingzhu insists not to be attracted by superficial phenomena and interests, and not to make windfall money that seems to be out of thin air.If the quality of the products of the foundry manufacturers is not good, and the technology is not innovative, it will not simply sell well because of the Gree brand, and it will also affect Gree's brand reputation.For merging companies, if they do not have the ability to make their corporate culture acceptable to the other party, they cannot easily expand.For Gree, doing air-conditioning must be done well. As far as the air-conditioning industry is concerned, Gree is also the only company that only produces air-conditioning. The brand, vitality and strength of this company are reflected in its professional operation.Professional management not only enables Gree to make continuous breakthroughs and progress in air-conditioning technology, but also gives Gree a great advantage in brand promotion.Some experts once analyzed that Gree's ability to stand out in the highly homogenized air-conditioning market is related to its vigorous promotion of specialization and professional operation, because many consumers believe that Gree air-conditioning with professional operation is more trustworthy.Dong Mingzhu does not fully agree with this analysis.She believes that "air-conditioning homogenization" is a false concept, because the products produced by enterprises with different business philosophy will be different.In this regard, Dong Mingzhu also gave an example that Gree's new science and technology building in the fourth phase has more than 120 laboratories, and it is necessary to conduct many different tests on products and conduct destructive experiments.Products designed by Gree must have a lifespan of more than 8 years.

And in the past eight years, no problem can occur in any part.For the professionalization of enterprises, Zhu Jianghong once had a metaphor: professional development is like a bulldozer, although it moves slowly, it is very stable. "It is better to cut off one finger than to hurt ten fingers", only by expanding the main business, building a solid foundation and forming economies of scale, can it stand the test of competition in the domestic and international markets.Based on this strategic thinking, Gree has become more and more stable and practical in the air-conditioning industry.Also because of this strategy, Gree has once again become a unique and beautiful landscape in the home appliance industry. It is the only enterprise in the home appliance industry that takes the road of specialization.Regrettably, many domestic enterprises are eager for quick success and quick benefits in the process of carrying out diversified expansion strategies, and in the end the gains outweigh the losses. Not only the core business has plummeted, but the newly added business has not achieved much.

In the mid-1990s, Chunlan, once dominant in China's air-conditioning industry, was keen on the road of diversification and rapid expansion.Since 1996, Chunlan has implemented a diversified expansion strategy, involving electronics, automobiles, overseas investment and other fields, and these industries and air-conditioning business have a large span. As a result, Chunlan Group is no longer able to invest in the main business of air-conditioning, which not only ruins its position as the leader of air-conditioning, but also loses the opportunity for the entire group to grow bigger.According to the analysis of professionals, Chunlan has expanded from an air-conditioning company to multiple fields in a short period of time, which lacks sufficient preparation and solid foundation.This kind of expansion involves refrigerators and washing machines with a relatively high degree of correlation, as well as computers, motorcycles, automobiles and new energy sources with a large span.In the process of diversification and expansion of associations, Chunlan did not make good use of its original network, brand, technology and other advantages to achieve growth.In non-association, due to the large span and the lack of mature personnel and technical equipment, it is impossible to obtain economic effects in the short term.In Dong Mingzhu's view, whether it is diversification or specialization, the key lies in whether the company has talents, management and technology, and the purpose of the company's diversification.If Gree carries out diversified development with the speculative psychology of making money, then Gree will also fail.

The reason why Gree took the road of specialization is because they feel that there are still many things that can be researched in it. Although it is a civilian product, it also has technological content.Gree chose to specialize because there is still demand in the market, not just to make money.Zhu Jianghong has always firmly believed that there is a specialization in the technical industry. Therefore, when other air-conditioning manufacturers have launched color TVs, washing machines, microwave ovens and even mobile phones to implement product diversification strategies, Gree Electric has been sticking to the air-conditioning position and focusing on professionalism. As a result, it has become the only professional air conditioner manufacturer in China with strong competitiveness in the world.Dong Mingzhu said that Gree Electric’s air conditioners have been working until the air conditioners themselves are replaced by higher products, and they will not engage in "the east is not bright and the west is bright".Dong Mingzhu emphasized that the energy of an enterprise is limited, and to carry out diversified expansion, not only capital and strength must be considered, but also whether it has a management system for diversified expansion.Every product requires professional talents and technical support.Without the accumulation of certain professional talents and technologies, blind expansion will inevitably cost a lot.Overseas, the battle between the two Coca-Cola beverage giants is a prominent example.PepsiCo started to diversify and invested billions of dollars to expand its business into capital-intensive industries such as KFC, Cheetos, and Pizza Hut. As a result, the number of PepsiCo employees rose to 480,000, making it the third largest in the world. enterprises, but did not bring economic benefits to enterprises.At this time, Coca-Cola still insisted on specialization, and invested deeply in its beverage infrastructure, so that all its profits came from beverages. Coca-Cola had only 33,000 employees, and its profit was twice that of Pepsi.The well-known domestic brand Haier has also been impacted by the diversification strategy. Many years ago, "Haier" was synonymous with the refrigerator industry and became the "No. 1" brand in China's refrigerator industry. The sentence "Haier, sincere forever" touched thousands of households .

At that time, when people thought of Haier, the first thing that came to mind was the Haier refrigerator.Later, Haier set foot in the air-conditioning industry, and this advertisement made "Haier Air Conditioning" popular in China. Around 2000, Haier's brand awareness, trust, and reputation reached the best level in history. Haier's air-conditioning sales rose in a straight line relying on the strength of the brand, and it almost became people's first choice. However, after only three to five years of competition, "Gree" "Air Conditioner" was born, and Haier Air Conditioner encountered the impact of its strongest competitor, Gree Air Conditioner. "Gree Air Conditioner" became China's "world famous brand", and "Gree" almost became synonymous with air conditioners.Haier, which is striding forward on the road of diversification, has gone global and become a "world famous brand", but the advantage of its brand specificity is gradually weakening.Now when people talk about Haier, they seem to be confused about which product is Haier's strength. The "Haier Refrigerator" that once occupied a place in people's memory has been replaced by "Haier Electronics".All the above examples show that in a huge and competitive market, it is impossible for any enterprise to meet the multiple needs of consumers at the same time.Only by concentrating resources and energy to satisfy a need or a part of people's needs from a certain aspect, enterprises will not only have survival and foundation, but also have the possibility of long-term development.Gree's professional management practice vividly illustrates this point: concentrating and integrating multiple resources, focusing on a certain aspect and a certain layout of "deep cultivation" or breakthrough, this is a more feasible strategy for Chinese enterprises to participate in international competition .In the process of specialized operation, Gree Air-Conditioning regards serving customers as the starting point and foothold of its strategy "from satisfying customers' needs, to satisfying customers throughout the whole process", and "customer-centered" has become a throughout A red line of the specialization strategy.It is the specialization strategy implemented by Gree that ensures that this purpose can be firmly implemented.Because of the road of specialized management, Gree's current products have covered 10 categories, more than 50 series, and more than 500 specifications in the field of residential air conditioners and commercial air conditioners. It has become the air conditioner manufacturer with the most complete specifications and the most varieties in China. factory.

Nevertheless, some people still think that Gree has been walking on a "single-plank bridge" for many years.These people undoubtedly want to maintain the correctness of the diversification theory. Of course, we cannot deny the benefits of diversification. Diversification can involve various fields, so that a company can achieve greater expansion.But in any case, we cannot deny specialization just because we want to maintain the correctness of pluralism theory.Diversification and specialization are two different development strategies. There is no difference between good and bad. The key lies in whether it suits one's own development needs. "Big business" doesn't necessarily guarantee success in the competition.In the past 50 years, several Fortune 500 companies went bankrupt every year, but most of the "hidden champion" companies survived.Huge and diversified businesses will cause the company to lose its core business market and make the company's organizational structure unprecedentedly complex. It is easy to fall into the quagmire of slow decision-making and cost inflation, which directly leads to the decline of the company's competitiveness.From this, we seem to be able to draw a preliminary conclusion: small and streamlined, professional and innovative are also the way to win a company.As an air-conditioning company, Gree has developed its own characteristics on the road of specialization, and there are many places worthy of our study and reference.In cross-provincial and cross-border sales of air-conditioning products, due to differences in geographical and natural conditions, many new requirements will be placed on the products.Gree air-conditioning regards meeting these requirements of customers as an important content of specialization, and seriously solves them, so as to truly realize the personalization of products.On any occasion, Dong Mingzhu made no secret of her eager hope to make Gree "the first world famous brand in China's air-conditioning industry".In the single market of air conditioners, it is no accident that Gree has maintained good performance growth for many years. This has a lot to do with the operating principles that Gree has pursued for many years.No matter in the overseas market or the domestic market, whether in the entire operation management or in the sales, Gree has always adhered to the principle of "good air conditioners, made by Gree".Of course, diversification has its pitfalls, and specialization also has risks of specialization.For Gree, taking the road of specialization means putting all eggs in one basket.Will Gree choose a diversified path in the future?This is the question of many people.Dong Mingzhu admitted that she has always been not in favor of corporate diversification.Dong Mingzhu said many times: Gree will not "strategic shift" easily, and we will not raise too many children like those "survivors". As a result, our energy and funds are scattered, but we do not raise truly strong children.Competition exists in every industry and enterprise, and the risk of diversification may be greater than our specialization, because if I do well in this industry, I will be able to compete with others.

I don't have that kind of lazy thinking, saying that this major is not doing well, so I change my major to compete. Do you think that changing your major can win others?So it is not the risk of putting all eggs in one basket, but the risk exists at any time. The question is whether there is the ability to resist and resist.Therefore, Gree only makes air conditioners. From household air conditioners to central air conditioners, "breaking the way" will keep Gree under constant pressure, and must keep moving forward, making progress and surpassing.