Chapter 3 Wu Bingxin's self-reported "15 big mistakes"

Review background: In China's health care products industry, Sanzhu Industrial Co., Ltd., founded by Wu Bingxin and his son Wu Siwei in 1994, has performed a legend that no other company can follow.It quickly grew into an empire, but collapsed in an instant. In the health care product industry, it has created myths one after another. At the beginning of the establishment of Sanzhu, Wu and his son promoted the products and corporate image of Sanzhu through ingenious advertising combination, as if overnight, Sanzhu became the most concerned enterprise of China's mainstream media.At the same time, through the sponsorship of various academic and technological seminars, Sanzhu has brought good public opinion exposure, making the decision-makers of Sanzhu quickly contact with the best celebrities in China, and by the way, Sanzhu has won numerous titles, medals and Certificate.And the marketing model of expert free clinic pioneered by Sanzhu has spread from central cities to towns and rural areas. Sanzhu holds at least tens of thousands of such free clinic consultation activities all over the country every year.It is one of the companies that have achieved the most brilliant performance in China's rural market so far. The success in the rural market has made Sanzhu a real "health care product king".

Wu Bingxin promoted the four-level marketing system through the rural market of Sanzhu, took advantage of China's low labor cost advantage, and carried out human sea tactics, employing hundreds of thousands of college students to enrich county-level, township-level offices and publicity stations.At the same time, he also created a "no-cost advertising model", painting "Sanzhu Oral Liquid" on every earth wall, telephone pole, etc. in the countryside where words can be painted.Statistics from the three plants show that by the end of 1996, sales in the rural market had accounted for 60% of the total sales of the three plants.

In 1994, the sales of the three companies were 125 million yuan; in 1995 it reached 2 billion yuan; in 1996 it reached the peak of 8 billion yuan.In terms of asset appreciation, Sanzhu’s registered capital at the end of 1993 was 300,000 yuan. By the end of 1997, the company’s net assets were 4.8 billion yuan, and the asset-liability ratio was said to be zero.At its peak, Sanzhu registered 600 subsidiaries in all major cities, provincial capitals and most prefecture-level cities across the country, 2,000 offices in counties, townships, and towns, and a total of more than 150,000 marketing personnel at all levels.Wu Bingxin once said boldly, "Except for the postal network, I don't know anyone in China who has a bigger network than me." In 1996, relying on such a huge marketing force, Wu Bingxin launched the so-called three major campaigns of summer, autumn and winter.The leaflets, banners, posters and slogans of Sanzhu were posted all over China, achieving sales of 8 billion yuan in one fell swoop.

By 1997, Sanzhu had more than 300 subsidiaries at the regional level, 2,210 county-level offices, and 13,500 township-level workstations, directly employing more than 150,000 people. It seems that the marketing of the three companies is mighty and mighty, but in fact it is overlapping agencies, overstaffed, arguing with each other, and there is even a strange phenomenon that three people manage one phone in the subordinate agencies. In 1997, the national sales of the three plants fell sharply, a sharp drop of 1 billion compared with the previous year.At this year's year-end meeting, Wu Bingxin gave a report he called "Bone Scraping to Cure Poison", in which he painfully reported the "15 major mistakes" of the three strains, and exposed the crisis of the three strains to the world for the first time.

In 1996, the death of Chen Boshun, a retired veteran boatman in Hanshou County, Changde, Hunan Province, caused the "eight bottles of three plants to kill an old man after drinking to death" incident, which ignited various hidden dangers in the development process of the three plants, and finally led to the huge empire of the three plants. instant collapse.Although in April 1999, the three companies won the second instance of Chen Boshun's lawsuit, and the media also made extensive reports, but at this time more than 200 subsidiaries of the three companies had ceased operations, and almost all workstations and offices were closed. After 2000, Sanzhu Group and Wu Bingxin fell into a long period of silence. In the spring of 2005, Wu Bingxin announced that he would completely withdraw from the health care product industry and instead set up Sanzhu Pharmaceutical Group, specializing in the pharmaceutical industry.But after that, there was no eye-catching action from Sanzhu Group in the market.In the history of the development of Chinese enterprises, the three plants only left a deep sigh.

1.The market management system has become seriously unsuitable, and the relationship between centralization and decentralization has not been properly handled. In 1994, 1995, and 1996, we adopted a "group army" management model for the market, with a high degree of centralization; we adopted a "cramming duck" management model for subsidiaries.In 1997, this management model became seriously unsuitable. At the beginning of 1997, we implemented decentralization, but many subsidiaries would not use or abuse power, and serious problems appeared. 2.The operating mechanism has not been completely straightened out.Before the transition, we implemented centralized accounting management, which guaranteed the company's best interests.However, with the rapid development of the company, the phenomenon of not paying attention to work efficiency and operating benefits in subsidiaries has become more and more serious, blindly expanding and investing blindly.Moreover, under such an operating mechanism, it is impossible to effectively restrain and effectively control it.

3.The "dinosaur syndrome" of large enterprises is serious.The organization is bloated, there are many departments, the hierarchy is strict, there are many levels, the procedures are complicated, the bureaucracy is serious, the information flow is not smooth, and the response is slow.In the company's headquarters, several major systems are a large center and a small center. Each system and each center is a prison, forming barriers to each other. Each expands personnel, increases functions, and competes for power and profit, forming small princes with separate regimes. 4.The macro-analysis, planning, and control functions of market management failed to perform effectively, and the estimation of the market situation was overly optimistic.

5.There is a serious incompatibility between marketing strategy, marketing tactics and market consumption demand. Compared with 1996, the market environment changed a lot in 1997, but our marketing strategy and marketing tactics still adopted the old way: vigorously promote the rural market, lack of development in the urban market, and did not cultivate a new economy growth point.The ratio of input to output is not emphasized enough, and large-scale investment is still insisted on, resulting in a serious waste of invalid input and advertising costs.In terms of marketing tactics, it is still the same old style - leaflets, special topics, activities, and there is little innovation in general.The taste, grade, and quality of advertisement production are not high, and the credibility is reduced.Some subsidiaries are still arbitrarily expanding the range of curative effects, and publicizing that the three strains of oral liquid can cure all diseases, which has aroused great resentment among consumers.Propaganda for the sake of publicity without investigating, researching, or analyzing the changed needs of consumers was the biggest mistake of our marketing strategy in 1997.

6.The distribution system is unreasonable and the incentive mechanism is not perfect.Before the transition, it was "it is better to sit than to be dry, to lie down than to lie down, and to sleep better than to lie down." After the transition, although the situation has changed, the problem of unfair distribution has not been fundamentally resolved.The salary of some company managers and finance ministers is 3,000 yuan, which fluctuates within the range of 5%-10%; Money income and life cannot be guaranteed, so who will go to work? Throughout 1997, our ideological and political work was greatly downplayed, the ideological education for employees was less, the corporate philosophy was gone, and the incentive mechanism developed abnormally.This is a lesson we should sum up profoundly.

7.The democratization and scientificization of decision-making needs to be further strengthened.In the past, we adopted a centralized system; the decision-making power was over-centralized, and there was a lack of "think tanks", so some mistakes in decision-making had a great impact on the company as a whole. 8.The pride and self-satisfaction of a considerable number of cadres and the corruption of a small number of cadres caused us to fail to implement many tasks in 1997.Some cadres go to dance halls and nightclubs at night and sleep in during the day.Especially after decentralization, the headquarters' control over the subordinates has weakened, and this phenomenon is even more common.A few subsidiary managers actually shouted the strange tune that "subsidiary manager is lazy than the director of the office, the director of the office is lazy than the business manager, and the business manager is lazy than the propagandist", which is really corrupt.There is a subsidiary manager, the company has a car, and he rents a Santana at a monthly rent of 3,000 yuan.There is also a manager who has not been to the market several times a year and does not know where the office is.He has an office director under him, and he doesn't even know him after four months of recruitment.

9.The waste problem is extremely serious.Due to the failure to keep up with the supervision and constraints of finance and law, the phenomenon of waste was extremely serious in many subsidiaries: The first is the waste of advertising costs. (1) Due to the lack of pertinence of investment and lack of effect analysis, the phenomenon of advertising costs being wasted is very serious. (2) The management of advertising fees is seriously out of control.Many subsidiaries set up clever schemes to extract advertising fees from the headquarters. (3) The phenomenon of taking advertising kickbacks is very serious, and it has been repeatedly banned. Secondly, industrial mergers have caused a lot of waste.The lack of serious demonstration of the merged enterprises, especially the lack of careful investigation and analysis of the product's market potential and market prospects, has led to major mistakes in industrial mergers. Again, the waste of personnel is also quite serious, especially before the transition, the staff expanded rapidly.Some companies spend 70% of their advertising expenses on labor costs, so where is the money left for advertising?The increase in personnel has also caused a lot of internal friction, mutual comparison, the company's unity is gone, and the combat effectiveness is weakened. In addition, the waste of administrative costs is also very alarming.Some subsidiaries spend 390,000 yuan on phone calls and 500,000 yuan on hospitality expenses a year.After the transition, some subsidiaries’ hospitality expenses remained high, reaching more than 70,000 yuan in August and September 1996; some foreign affairs cadres reported four meals a day; Buy boxes by boxes, and buy more than 400 thermos cups at a time. What's the use?Mobile phone and BP machine are randomly matched.Our drivers and even the little girl in charge of the factory are equipped with BP machines. How many businesses do they need BP machines?If the problem of waste is not resolved, no matter how big our family business is, it will eat away at it. 10.Hilltopism prevails, and liberalism is serious.Not from work needs, but from personal interests.Use power to attack dissidents, form cliques, and cultivate personal power. In addition, liberalism is also manifested in meeting the requirements of the above. If it conforms to my viewpoint and my interests, I will implement it; 11.Discipline is not strict, and cadres are less punished for violating discipline.The company's "cadre life-long system" is prevalent, and people can go up but not down. They made mistakes in this place, and after a few days, they went to work in another place. 12.There were insufficient follow-up products, and new products were not launched in time. 13.Financial management is seriously out of control.Some financial personnel have a poor sense of responsibility, did not earnestly perform their duties as "heads of the family", and some even colluded with the manager to "commit crimes" together.The payment and IOUs are still in the hands of the business sponsor, and he may abscond with the money at any time.In many companies, bad debts are high and unmanageable.The distribution plans of some subsidiaries have obvious unreasonable proportions and a serious phenomenon of "losing the headquarters and enriching individuals". 14.The organization and personnel work is seriously incompatible with the development of the company. (1) The personnel evaluation mechanism is not standardized, and there is no institutionalized evaluation procedure. (2) The cadre training work has not kept up. (3) Recruitment is not strictly controlled, and a group of low-quality people and even social dregs have entered the company, which has caused a great negative impact on our work. 15. The supervision of legal and discipline constraints is not enough. (1) The biggest problem in the law and discipline work is the ineffective preventive measures in advance and busy control after the event. (2) There is also a certain gap between the professional quality of legal personnel and job requirements. (3) The punishment is not strong enough. (4) Information feedback was not timely, and many violations of laws and disciplines were not discovered in time. (5) The restraint system for cadres is not sound, especially the lack of strict legal contractual restraint. (6) Some leaders of the headquarters and the provincial headquarters intervene more in the legal and discipline work, which brings certain difficulties to the legal and discipline work. (7) The market order is chaotic, and the rush of goods is becoming more and more serious.After the audit was assigned to the leadership of the provincial headquarters, local protectionism emerged, and some leaders even bent the law for personal gain, objectively condoning the behavior of flushing goods.