Chapter 25 "Cotton jacket" for winter

When encountering "winter", Ren Zhengfei thought of the hard truth that "cash is king", and the solution was to sell the business.Huawei has repeatedly sacrificed some non-core businesses to protect the company's overall business and tide over the difficulties under financial difficulties. In 2001, Huawei obtained US$750 million by selling its electrical business unit to ease financial pressure. In 2005, it sold a 49% stake in Huawei 3Com for US$882 million. From 2002 to 2007, behind the rapid development of Huawei, many financial indicators declined rapidly.Huawei's operating profit margin dropped from 19% in 2003 to 7% in 2007, and its net profit margin dropped from 14% to 5%. Control below 50%, while in 2007 it reached 67%.

Coincidentally, in the first half of 2008, ZTE achieved an operating income of RMB 19.729 billion, a net profit of RMB 557 million, and a net profit margin of only 2.8%. The fact that the two major domestic telecom manufacturers "both survived the winter" shows that the price war was provoked by these two companies.In the equipment bidding of 30 billion yuan for telecom CDMA network, Huawei's quotation of 700 million yuan also caused an uproar in the industry. The highest quotation for the first time was Alcatel Shanghai Bell, about 14 billion yuan; ZTE’s quotation was in the middle, about 8 billion yuan; Huawei’s quotation was the lowest, about 700 million yuan.From 700 million yuan to 14 billion yuan, there is a gap of 19 times, and the price war is very fierce.

Ren Zhengfei is also thinking about the threat posed by the price war. In a speech in 2005, he said: "Huawei's rapid growth means taking share from its competitors, which directly threatens the survival and development of its competitors. , may make enemies everywhere in the international market, and even be attacked by groups. But Huawei is still very weak, not enough to directly compete with international friends and businessmen, so we have to hide our capabilities and bide our time." From the current point of view, the way to keep a low profile is to cooperate with "friends".For many years, Huawei has cooperated with Motorola in the form of foundry; established a joint venture with 3Com to successfully enter the US data communication market; now Huawei has successfully established partnerships with NEC, Panasonic, Siemens, etc. to establish regional industries for the next step The alliance has laid a good foundation.

In 2008, eight years after the crisis consciousness baptized Huawei, Ren Zhengfei mentioned "winter" again.He said, "We must be fully psychologically prepared for economic globalization and the difficulty and cruelty of market competition."He also reminded employees, "The economic situation may decline, and I hope senior cadres are fully prepared. Maybe 2009 and 2010 will be even more difficult." Ren Zhengfei's remarks come at a time when China's telecom market is in good shape and telecom restructuring is underway. 3G licenses will be issued soon, and operators are raising hundreds of billions of dollars for large-scale investments. People's general view is that telecom The spring of equipment manufacturers is coming.

But Ren Zhengfei, CEO of Huawei, China's largest telecommunications equipment maker, brought up "winter" again.This is the third time that Ren Zhengfei has warned. After evaluating various internal and external situations and contradictions, the international market situation is facing a recession, which makes Huawei vigilant again. Ren Zhengfei's trip to Japan gave him new thoughts and inspirations.The picture of tranquility, peace, cleanliness, affluence and comfort in Japan is the same as it was 10 years ago. The difference is that Japan is experiencing the coldest and longest winter after the war.Why are Japanese people still so peaceful, optimistic and dedicated during the period of low growth? This made Mr. Ren think of his own business.Huawei has experienced 10 years of rapid growth. Employees and enterprises are growing in a good development environment. If Huawei also encounters winter, will it be able to cope with it?After all, winter is coming!

Huawei's advanced awareness has allowed it to notice this problem early and is looking for countermeasures.Mr. Ren is preparing cotton coats for Huawei's winter. Struggle is the driving force for the rise of a nation and the way to enhance the competitiveness of enterprises.Japanese companies are faced with three types of surpluses: excess employment, excess equipment and excess debt. However, in the face of difficulties, they are still patient, optimistic, diligent, and struggling. They also clearly understand that the key to a company's success is whether it has core competitiveness. .Huawei has not encountered the difficulties faced by Japanese companies today, but it can actively seek to enhance the company's coping capabilities, and may be able to preserve its strength when difficulties really come.

Ren Zhengfei believes that Huawei's achievements today are more due to opportunities than the quality and capabilities of the company itself. It is the real success of a company that can survive difficulties like Japanese companies.Mr. Ren is soberly aware that Huawei still has many deficiencies. If these areas are not improved, it will be difficult for Huawei to move forward, let alone enhance its defense capabilities.However, Huawei is aware of this and is working hard to improve itself. Huawei people are low-key, but they are by no means pessimistic. Just as they firmly believe that winter will come, they also firmly believe that winter will always pass.

It is difficult to start a business, but it is difficult to maintain success. It is not difficult to know the difficulties.Success only belongs to those who are prepared. Huawei is the one who prepared the padded jacket very early, and will surely survive for a long time in the ever-changing market.Huawei actively strengthens its own defense capabilities, which is essentially enhancing the competitiveness of enterprises.As Ren Zhengfei said, only the panic-stricken can survive, and only companies with a sense of crisis can survive in the market for a long time.