Chapter 11 Chapter 6 Introduction Strategy

Problems still exist. The problems of enterprises are always intertwined.After hard work and harvest, however, in terms of brand building, Li Ning Company found that its own problems still exist. After the grand turning-of-the-century ceremony in 2000, China ushered in its accession to the WTO in 2001.At this time, Li Ning's sales were close to 1 billion, and it still maintained the number one position in the country.By the end of 2002, when Li Ning Company decided to introduce the strategy, the overall situation could be said to be good or bad. Some aggressive domestic competitors have emerged. After completing capital accumulation for foreign companies, some companies, represented by Fujian Jinjiang sporting goods manufacturers, have begun to awaken their brand awareness. In the immature domestic low-end consumer market It constitutes an increasing impact on "Li Ning". The article "Reshaping Li Ning" introduced that at this time, Wang Li, the company's marketing director, realized: "Anta has made rapid progress, and the phenomenon of Anta has given us a warning. Li Ning cannot give up low-end market products, at least it must firmly grasp a considerable market share." So, quickly, "Li Ning" launched a tactical counterattack against Anta, first launching products aimed at the low-end market, such as the "comfortable equipment" series with a price of around 100 yuan.Moreover, for channels, Li Ning Company has opened a shoe store with a size of less than 20 square meters - the "starting line" shoe store.

Not only does it need to stop the local rising star, but "Li Ning" also faces a greater difficulty - the rapid offensive of multinational companies. In 2001, "Li Ning" accounted for about 12% of the market share of Chinese brand sports shoes, while Nike and Adidas only accounted for about 7% and 6%.Li Ning Company is determined to be the first in the market all the time.Brand building finally paid off.What is impressive is that in August 2002, at the Women's Basketball World Championships, when the Spanish women's basketball team competed with the Chinese women's basketball team for the fifth place, the Spanish women's basketball team wore "Li Ning", while the Chinese women's basketball team wore Nike. The Spanish women's basketball team won.Afterwards, a media outlet gave the news an exciting headline: ""Li Ning" defeated "Nike"".But in fact, people in the market understand that the gap between "Li Ning" and Nike is still very large. Nike's global sales at that time were 10 billion US dollars, while "Li Ning" was 1 billion yuan.In terms of growth, the average annual sales growth rate of "Li Ning" from 1997 to 2001 was less than 10%, while Nike's growth rate in the same period in China exceeded 30%. In 2002, Nike's sales in China reached 800 million yuan.

Another outstanding situation in 2002 was that those well-known multinational sports brand companies that used to only cooperate with agents began to turn to set up offices or wholly-owned or joint venture companies in China to increase research and development in the Chinese market and realize localized production in China. , reduce production costs, and start to control sales terminals by themselves.These approaches clearly strengthen the penetration of multinational brands in the domestic consumer market. On the one hand, the strong growth of domestic and foreign competitors, such as Nike and Adidas, has been driving straight ahead. On the other hand, the growth rate of "Li Ning" has slowed down in recent years, and its products have not changed much.It can be said that "Li Ning" is facing various challenges.

When Zhang Zhiyong visits the market, he often compares Li-Ning stores with Nike and Adidas. He often feels that for some reason, Li-Ning stores lack an atmosphere, which often makes you feel that you don’t know what you are showing.The air of Nike and Adidas stores is filled with a sporty and fashionable atmosphere.Zhang Zhiyong also feels that although Li Ning has done many sports sponsorship activities for so many years, the efficiency of these sports sponsorship activities is not very high, and no effective superposition has been fully formed. "Don't be China's Nike, but be the world's Li-Ning", it seems that such a slogan is still too empty to become the company's development strategy. The company must clearly formulate its own development strategy in order to form an effective breakthrough.

The emergence of strategy In 2001, the most popular management book in Chinese business circles was that in this year, "management" became a buzzword in the business world.Chinese companies know that companies like McKinsey are conducting management research and consulting to help companies grow.For a while, the consulting industry became popular in China. This also provides Li Ning Company with a solution to the problem: find a professional consulting company. At the end of 2002, the world's largest management consulting organization, IBM Consulting Services Team, was invited to enter Li Ning Company.With the help of IBM, Li Ning Company carefully analyzed the entire sporting goods industry in the company's external environment, consumer demand, market competition, the company's internal business operation status, and the company's competitive advantages and resources.

Only then did Li Ning Company realize how big its problems were.According to the article "Professionalization, Give Li Ning Flying Power", dealers believe that "Li Ning" has too many SKUs (minimum stock keeping units) every season, but the sales of single products are small, and mainstream products have no continuity, making it difficult to make sales Estimate; the series of products is not good. For example, the table tennis series only has clothing but no shoes, and the product has no style.In the internal management of the company, less than 30% of the products designed by designers are finally put into production, resulting in a lot of ineffective labor; the average life cycle of products is only half a year, and some even only two months, and there is no mainstream selling point throughout the product.

At the product order meeting, "Li Ning" did not have a clear marketing plan to guide dealers to order, and the products did not have professional sports attributes.The location of retail outlets is average, the display location in the mall is not good, the coordination of different single stores is poor, the discounts are often inconsistent and cannot be carried out at the same time, and the IT network is backward.This highlights that Li Ning Company has not focused on cultivating its own retail management capabilities: site selection and negotiation capabilities are restricted by the management mechanism, slow response, poor single store management capabilities, poor store replication capabilities, poor franchise management capabilities, and poor terminal information collection and analysis capabilities. etc.

The ambiguity of Li Ning's corporate strategy has led to the ambiguity of business strategies, and the focus is on coping.The Li-Ning brand is between fashion and professionalism, R&D lacks leading purpose and core technology, the launch and elimination of new product categories is random, channel self-construction is not focused on integrated control, market order is disordered, retail multi-brand is compared to Li-Ning monopoly There is no clear strategy, and the supply chain is between market-pull and production-oriented, and there is no clear strategy.At the same time, "Li Ning" lacks a clear and definite guiding strategy in terms of sports sponsorship. Compared with the strategy of its competitor Nike, which only focuses on football and basketball, "Li Ning" distributes the limited sports promotion expenses to the sponsorship of multiple projects In fact, it directly leads to insufficient support for individual projects.In a survey of all 9 sports sponsorship activities of "Li Ning" conducted on consumers, only one has a recognition rate of more than 50% among consumers, and most of the sponsorship projects have a very low recognition rate among consumers. Low, the dispersion of projects shows that "Li Ning" lacks a clear and definite strategy in sports sponsorship (including project selection and team selection).

The lack of strategic direction caused problems in the company's internal structure, and the company's internal structure problems led to problems in market operations.In short, all the problems of the company can be attributed to the core problem of not having a clear strategy. Now, the problem is found.