Chapter 36 Vertical deep cultivation: easy to merge and not difficult to integrate?

After completing a series of mergers and acquisitions, the economies of scale of Focus Group have become more and more obvious. The term "diseconomies of scale" in economics also reminds that the expansion of enterprise scale does not necessarily mean the increase of corporate profits.There is no problem with mergers and acquisitions, the key lies in "merging" and not blindly.Therefore, the brand-new Focus after the merger is a new opportunity, a new starting point, but also a new challenge for Jiang Nanchun. The smooth integration of resources is not the last step for smooth mergers and acquisitions. On the contrary, after integrating a large number of resources, how to make full and effective use of various resources to form a joint force of the group and realize the new development of "1+1>2" requires internal Vertical deep cultivation and integration.Focus has used real data to convince everyone of the integration power of "1+1>2", becoming a positive and typical example of economies of scale.

After the successful merger and acquisition, for Focus, the integration of the original company's philosophy and culture may be a difficult problem. "As long as the industry does not enter into vicious competition, everyone can maintain a state of excitement."—— Jiang Nanchun thinks. "If you only interact with competitors, you will make a bad mentality."—— Yu Feng said. At that time, it was precisely because of Jiang Nanchun and Yu Feng's "heroes have the same views" that the separated teams were inclusive of each other's cultural accumulation, forming a common goal of struggle, a harmonious working atmosphere, strong cohesion and centripetal force, and became The life-and-death crisis in the building video advertising market has become a business legend that everyone pays attention to.

However, with the increase of mergers and acquisitions, Focus has to face more integration of corporate culture, and the main environment is China where "face" and "humanity" are full of "face" and "humanity" on any occasion. "To be a business requires not only smart tactics, but also greater wisdom. In the past 20 years, our companies have been 'more than smart, but not wise'." Wu Honggang, a senior consultant of Shenyuan Consulting Company, believes, "Companies are not competing with competitors, but rather It is fighting against the law of market competition", so the competition becomes fierce and leads to the minimization of the interests of the entire industry under the goal of pursuing the maximum interests.

According to business surveys, 65% of global mergers and acquisitions in the past two decades ended in failure, and 85% of CEOs admitted that differences in management style and corporate culture were the main reasons for the failure of mergers and acquisitions. Corporate culture refers to the business philosophy, value system, historical tradition and work style of the company, which is manifested in the overall mental outlook of the company's members, the common value measurement standard, and the cultural quality of pursuing development with ethical norms that conform to the characteristics of the times.Therefore, the corporate culture of the new Focus after the merger is by no means a simple superposition of the original corporate cultures of all parties before the merger.

All excellent companies all attach importance to corporate culture and the role of people who are the main body of corporate culture in corporate innovation.The personal level of business managers in various aspects such as morality, knowledge and ability can often determine the success or failure of the company.Differences in decision-making thinking and modes manifest as cultural conflicts in business management.With the development of management science, the status and role of people in enterprises have experienced three leaps: from economic people who pursue material and economic interests, to social people in social relations, to cultural people dominated by values.

"Mengniu Inside Story" reveals, "Mengniu has drawn hundreds of wise sayings from ancient and modern Chinese and foreign cultural heritage, and incorporated them into the innovative actions of its own group, making these clear sayings into signs and hanging them in every corner of the company. Subtly standardize the thoughts and behaviors of each employee", thus forming what Niu Gensheng called a unique "slogan culture", mobilizing the confidence and fighting spirit of Mengniu's internal employees, making them feel recharged at any time.Therefore, although corporate culture does not determine the success or failure of a company, it is also crucial to its growth and development.

This is a test for every entrepreneur.How to avoid the "prisoner's dilemma", how to "share adversity" and "share prosperity", so as to pursue a "positive sum game" instead of a "zero sum game" among enterprises?Judging from the experience of mergers and acquisitions without fail, Focus Media has its own principles in terms of cultural integration.Jiang Nanchun once talked about his feelings in this regard with a reporter from the "China Times": "The companies acquired by Focus are basically new media companies with a short history of establishment, and there is no deep-rooted corporate culture. It is easy to integrate, and Focus basically retains the original management teams of these companies, and maintains their independence moderately on the premise of ensuring the overall execution and work efficiency of the group." Facts have proved that he is right.

For the focus group with a large lineup, "cultural integration" seems to be an important and necessary consideration.How to form a management system with standardized systems, novel concepts, scientific methods, and flexible mechanisms through the complementary concepts, joint construction of systems, mutual learning of methods, and mutual learning of mechanisms to make up for the "blind spots" in cultural integration ".Combining the advanced and positive culture of the original enterprise with the unique cultural heritage of the other party, taking the essence and discarding the dross, realizing "cultural integration" and creating a new cultural soil suitable for the survival and development of the enterprise, perhaps because the focus is on a large number of The most important thing to do after the merger.

In every merger and acquisition, Focus has shown its brilliant side.Whether it is the acquisition of framework media, Juzhong Media or Allyes Network, Jiang Nanchun has declared in public that the personnel will be integrated but not laid off, and that the personnel structure will not change.Focus and Jiang Nanchun especially showed great "benevolence" to the top leaders. All the leaders remained in their posts, and they also held other important positions after joining Focus. "Personnel reorganization will be the biggest challenge of mergers." As early as the time of mergers and acquisitions, Jiang Nanchun clearly understood that without a good corporate governance model and a scientific organization and personnel structure, the dream of New Focus to challenge the "oligarchs" of international media would not be possible. difficult to realize.

Focusing on mergers and acquisitions, Jiang Nanchun and Yu Feng avoided the term "layoffs".And in the process, Jiang Nanchun expressed his thoughts on personnel integration and team optimization: "Focus Media and Juzhong Media both have many excellent employees. This integration will optimize personnel and launch new projects. staffing." In terms of not laying off employees, Jiang Nanchun said that it is because the development of Focus still needs more talents. After the merger, Focus will enter new media fields after segmenting the market, so more talents are needed. "Through integration, the value created by these people can be shared together."

After the acquisition of Allyes, the same problem arose. This time, it was a cooperation between different fields and different brands.Although all parties are trying to imply that the fusion of leadership, staff and corporate culture between the two companies will not be a problem.According to Focus Media's consistent merger and acquisition model, Allyes will continue to operate independently in addition to adding a wholly-owned parent company. Allyes' CEO Zhu Hailong will still hold his original position, and other management will not change.This has laid a solid foundation for the good integration between the two companies.Huang Shengmin, dean of the School of Advertising, Communication University of China, said that the Internet is an emerging media, and its high degree of marketization leads to more transparent assets, which do not involve existing policy, cultural and ideological conflicts, which will also greatly reduce problems in integration. So far, Focus Media, which has multiple mergers and acquisitions, still seems to have no signs of layoffs, but the internal brain drain of Focus Group may be inevitable.With the different strengths and statuses of major companies, the reorganization of Focus personnel is truly market-oriented, and personnel adjustments will inevitably occur. Some employees may lose their original positions due to the duplication of positions in all parties involved in the reorganization, thus "taking the initiative" leave".In business management, this is also normal.Behind so many businesses, how to effectively manage people with different abilities, different ideas, different values, and different worldviews is a question that Focus has been thinking about. In April 2007, Lang Xianping, a well-known economist and professor of the Chinese University of Hong Kong, published an article "Diversification has plunged Focus into a fatal crisis", saying that Focus could not correctly grasp the development essence of the industry and the psychological research of consumers, and entered the wrong industry Diversified fields.In fact, many people have begun to worry that the large-scale acquisition of Focus will bring indigestion, but so far, it seems that there have been no similar sequelae.Focus’s previous mergers and acquisitions have achieved a very positive cycle. On the one hand, through acquisitions, Focus has achieved rapid and significant increase in income and profit levels; Expected goals.For example, when the framework was acquired in 2006, the net profit of the framework was required to increase by 6 times compared with the previous year, and the result was that the framework increased by 9 times.For Focus, the PE value of 11 times when the framework was acquired that year also dropped to 7.5 times.And Focus Wireless (formerly Kaiwei Dianbao), which was acquired by Focus for US$30 million in March 2006, has already exceeded the performance forecast. "Focus platform has a strong value-added effect, and it has great support for the acquired company. It can quickly realize the mutual value-added of both parties, and ultimately share the benefits." Jiang Nanchun said.Focus's strong capital strength, brand power, sales force, and customer base all provide value-added for the acquired company.In addition, due to friends or competition, Jiang Nanchun is very familiar with the management of the acquired company and the business model of the company. This is also the factor that can increase the value of Focus after the acquisition. rise in market capitalization. Responding to the experts' warnings, Jiang Nanchun said that in-building TVs are becoming a thing of the past, and the future of Focus will be comprehensive digital media in the fields of mobile phones and the Internet.As early as when asked about the separation of two merged companies? ?When discussing the strategic direction, Jiang Nanchun said that the positioning of Focus Media is mainly advertising.Today's Focus has also begun to diversify its business forms.Just digital outdoor video, Focus has been subdivided into commercial building video media, store terminal video media, apartment elevator digital print media (frame media), outdoor large LED color screen network and other segmented media markets, while mobile wireless advertising media , Focus Direct Business DM media, cinema advertisements and internet advertisements will enrich the future of Focus. Focus and Jiangnanchun regard this behavior as an extension of the concept of media groups in the life circle. From a purely spatial point of view, Focus has been quite comprehensive. However, in this large and comprehensive management, facing so many brands, Jiangnanchun Can you really get along with his focus? Cultivating corporate brands with different styles is crucial to strengthening the personality of an enterprise, but it also puts a lot of pressure on corporate managers.Dissociated in many fields, maintaining all-round development is naturally the best way, but it is also inevitable to be suspected of having no personality. "Give me a fulcrum, and I can move the earth." Archimedes' words are also applicable to the market. With a strong brand, a company can also occupy a broad market. Brand, this term in economics, is an intricate corporate symbol and a concept of corporate product management.British advertising guru Nicholas Abercrown said: "A brand is a name, noun, sign, symbol or design, or a combination of them, the purpose of which is to identify a certain seller or a certain group of sellers. services and differentiate them from those of competitors." It is the intangible sum of brand attributes, name, packaging, price, history, reputation, and advertising methods. On the other hand, style is people, and media brands have obvious personalization characteristics. The direct managers of enterprises become the spokespersons of the brand, which is the personalization symbol of the brand.Brands are also like the culture of an enterprise. Different brands have their own unique styles, which contain different cultural backgrounds, and their styles are almost equivalent to the styles of enterprises. Some people in the industry believe that "the diversification of Focus brands will bring danger to product extension."From the high performance growth reflected in Focus’s previous financial reports, we can see the positive effect of Focus’s diversified development in the past two years. Is the outside world’s doubts about Focus’s diversification justified? On November 15, 2007, the "Global Entrepreneur" magazine published an article "Jiangnanchun Explains Doubts". In an interview, Jiangnanchun answered the question of rapid growth: "We are indeed saturated in first-tier cities. In better cities, close to 80% of the publications are posted, and in the second-tier cities, 50% to 60% of the publications are listed. But there is still a lot of space in the third- and fourth-tier cities. We will enter China with international companies Similarly, in the past, customers only worked in 4 cities, but now they can reach 20, but compared with 86 mainstream cities, there is still a lot of room.” As for diversification, in Jiang Nanchun’s view, Focus is essentially making resources integration. "Focus is a new media company. The so-called new media is digital media. So Focus has come to the Internet and wireless today, in fact, it came from the same line, not because of what happened to outdoor media. Digital media is more popular in the United States. It is manifested in the Internet market in many places. In Japan, it is strongly expressed in the Internet and wireless. In China, it is more comprehensive. In the future, it will be digital out-of-home, digital TV, Internet and wireless. We are extending from digital out-of-home to the Internet. Today, the blueprint for focus digitalization is in Every aspect began to become clear. The previous life circle media could only focus on the form of consumers, but I don’t think it has the concept of describing digitalization. Today’s Focus can be described in one sentence, which is to create an environment that revolves around consumers’ lives. The ever-present, ubiquitous digital platform—anytime, anywhere, anyscreen. This sentence most vividly describes the business of Focus Group today. If there is no Internet and wireless mobile phone business, the meaning of the digital group Insufficient."