Chapter 18 Leap: Global Sewing Equipment Champion Manufacturer

Who is Leap? In October 1986, in Taizhou, Zhejiang, Qiu Jibao returned to his hometown after three years of mending shoes in the three northeastern provinces, and founded a family workshop-Jiaojiang No. 2 Industrial Sewing Machine Factory to produce "Feiyue" brand sewing machines. In 2006, Feiyue Group, where Qiu Jibao served as the chairman, is a world-class sewing equipment manufacturer with the largest output and third sales in the world. It has 50 series and more than 500 varieties, forming an annual output of more than 500 sewing equipment 10,000 units, of which high-speed overlock sewing machines and interlock sewing machines account for 50% of the world's total production and 70% of the domestic production.

What is a sewing machine?There are industrial and household divisions. From the 1960s to the early 1980s, household sewing machines were one of the "three major pieces" of Chinese people.In the history of global multinational corporations, it is generally considered that the first industrial multinational corporation was the American Singer Company, whose main product was household sewing machines. What is a champion?It means the company with the largest market share in a certain market, with leading technology and the status of the first brand, is an industry leader, and has the ability and influence to formulate industry rules.

Being a champion is the pursuit of many Chinese companies, and how to grow into a champion has become a very important topic.The 20-year growth history of Feiyue Group reveals the "mystery" of how a family factory became a global champion.We mainly analyze the three most critical factors: gradual international operation, independent innovation of continuous cooperation and niche strategy of focusing on sewing equipment. On the road of international management, there has always been a dispute between gradual and sudden changes.Feiyue Group provides another typical case for the theory of gradualism. Feiyue Group's progressive international operation is mainly manifested in the following aspects:

At the beginning of its business, Feiyue took overseas as its target market.There are two stages in the development of overseas markets: from 1989 to 1996, the target market was in developing countries; after 1997, it entered the market of developed countries. In 1988, Qiu Jibao entered the Canton Fair with his products over the wall. He was fined and turned away, unable to take advantage of the Canton Fair, a vital product export channel.After being instructed by a Hong Kong businessman, Qiu Jibao took a borrowed translator and went abroad for the first time.Mexico, Brazil, Argentina, Chile, Ecuador, Venezuela, Colombia, traveled to 7 countries in 20 days, and brought back orders of more than 20,000 US dollars.This is the starting point of Feiyue product export.

By 1996, Feiyue had established trade relations with more than 50 developing countries in the world, and its export earnings exceeded 20 million US dollars.This is the first stage of Feiyue product export. The financial crisis in Southeast Asia prompted Qiu Jibao to reflect on the growth history of Feiyue and make two major decisions: one is to introduce foreign advanced equipment and technology to improve product quality; the other is to target developed countries such as Europe, America and Japan. Since 1997, Feiyue Group has focused on the markets of developed countries.By 2005, Feiyue exported 60% of its products to more than 120 countries and regions around the world, earning 230 million U.S. dollars in foreign exchange, of which 130 million U.S. dollars came from developed countries in Europe and the United States.

There are mainly two ways to enter the international market: product export and overseas production. Overseas production has different combinations of new construction and acquisition, sole proprietorship and joint venture.In the past 20 years, Feiyue Group has been carrying out international operations in the form of product export.It was not until April 21, 2006 that Feiyue Group successfully acquired 50% of the shares of MIFRA, which opened the precedent for overseas production. Italian MIFRA company is a world-class professional manufacturer of computerized flat knitting machines, with strong research and development capabilities and a manufacturing history of 35 years. Its brand RIMACH enjoys a high reputation in the industry.Qiu Jibao said that the successful acquisition of shares in Italy's MIFRA company will push both parties to achieve new and greater development at a higher level and win a higher market share in the world's computerized flat knitting machine field.

Feiyue Group's overseas M&A practices are worth learning: one and a half years before the share acquisition, Feiyue Group had already carried out technical exchanges and cooperation with Italy's MIFRA company, and the two parties "married" on the basis of "love".This is another gradual process, and its success rate is definitely higher than "marry first, fall in love later". It is worth noting that in March 2005, Feiyue Group signed a technical cooperation agreement with German ZSK Company, and Singapore Double Star Group participated in the cooperation as a third party.The German ZSK brand has a history of more than 100 years in the field of textile machinery and equipment. Its computerized embroidery machine production began in 1984. It is one of the computerized embroidery machine manufacturers with the loudest brand, the highest technical level and the best quality in the world.More than 95% of the products are exported to more than 100 countries and regions. There are branches in Europe, America and Asia, and more than 100 distributors around the world. The annual sales increase by more than 20%.The president of ZSK Germany said that this cooperation will give full play to their respective advantages, produce more excellent cost-effective products, and win greater development space for all parties in the global computerized embroidery machine market.Does this mean that in the near future, Feiyue Group will also acquire German ZSK company?

Enterprises are resource converters, transforming input resources into products and services that can create value for customers.The international operation of an enterprise is to find resources in the international scope, invest resources and effectively transform them.From the perspective of input resources, the gradual route of enterprise internationalization starts from production equipment and raw materials, then to technical exchanges and cooperation, and then to the internationalization of talents.The international operation of Feiyue Group is just like this. Before 1997, most of the production equipment owned by Feiyue Group was second-rate or even third-rate, which restricted the improvement of product quality.Taking advantage of the financial crisis in Southeast Asia and the country's preferential policies for upgrading traditional industries by importing equipment, Feiyue Group has introduced more than 100 world-leading automated processing centers from the United States, South Korea, and Taiwan to realize the modernization of production equipment. In 2003, Feiyue Group invested more than 20 million US dollars to introduce world-class processing and testing equipment.

Feiyue Group's technology internationalization is mainly reflected in the establishment of overseas information and technology development centers. In 1999, Feiyue Group hired technical experts in Japan to establish Feiyue Technology Development Center; in 2000, Feiyue Group hired German and Italian experts to establish a world-class technology development center in Beijing, and hired information technology experts to set up a technology development company in Ningbo. The group headquarters has set up a high-tech research and development center for sewing machines. The introduction of the above equipment is a transaction relationship, and the hiring of experts to set up a technology center is an employment relationship, both of which belong to the internationalization method within Feiyue Group.On the basis of internal internationalization, Feiyue Group began international cooperation between external agencies in 2004. In January 2004, signed a joint venture agreement with Singapore Double Star Group to purchase technology from the United States to produce garment suspension systems. In March 2005, signed a technical cooperation agreement in the field of computerized embroidery machines with German ZSK company.In September of the same year, signed a technical cooperation agreement with Italian MIFRA company in the field of computerized flat knitting machines.

It can be seen from the official website that many European and American companies have visited Feiyue Group this year.It is estimated that in the future, the international cooperation of Feiyue Group will have greater development.Feiyue Group has thousands of people going abroad every year. This kind of talent flow is the core of internationalization and will definitely play a role in future development. International operation is the main strategic action for Feiyue Group to become a global champion, and effective international operation requires corresponding corporate capabilities as a guarantee.The international operation capability of Feiyue Group comes from the independent innovation of the enterprise.

On November 4, 2006, the 4th Zhejiang?At the opening ceremony of the China Private Enterprises Summit, "2006 Top 50 Independent Innovation Capabilities of China's Manufacturing Private Enterprises" was announced, and Feiyue Group was on the list (ranked first in 2005), which shows Feiyue Group's strong independent innovation capabilities.There are also the following data as evidence: more than 500 patents, including more than 70 invention patents; more than 800 R&D personnel; R&D investment accounts for 5% of annual sales revenue; Development Center; develop dozens of new products every year, and the output value rate of new products reaches 70%... Today, when Chinese enterprises generally attach importance to and pursue independent innovation, Feiyue Group's independent innovation practice is worth summarizing and learning from.It has two characteristics: one is continuity, and the other is cooperation. Innovation is by no means a "sport", do it today, but not tomorrow, but a continuous daily central work.Only when an enterprise establishes such a concept and implements it in various activities can innovation be effective.Feiyue Group's independent innovation is just like this, and we can see this very clearly from its memorabilia. In 1988, the self-developed high-speed overlock sewing machine was put into production. In 1989, the domestic leading high-speed lockstitch sewing machine was put into production. In 1996, the multi-functional household sewing machine was born in China, which was hailed as a revolution of Chinese household sewing machines. In 1998, a variety of products passed CE, GS, UL, TUV and other international certifications; Feiyue multifunctional household sewing machines were exported to Japan in batches for the first time, ending the history of one-way imports of Chinese sewing machines from Japan. In 2001, five types of multifunctional household sewing machines passed the UL certification of the American UL company, and Feiyue agreed to put the "UL" mark on a prominent position. In 2001, grandly launched the multi-functional household sewing machine controlled by computer program. In 2002, Feiyue industrial machine CNC servo system with independent core technology was put into production and began to be put on the market. In 2002, it successfully developed and put into production bag opening machines, tacking machines, electronic buttonholes, eyelet buttonholes, pattern machines and other leading computer electronic special machines. In 2004, Feiyue took the lead in developing a computerized garment suspension system and put it into mass production. In 2004, the domestic original home computer embroidery machine was put into mass production in Feiyue, which added a bright spot to the DIY fashion trend of clothing. In 2005, the "Innovative Development Platform Based on Supporting Intelligent Sewing Machine" undertaken by Shanghai University passed the expert acceptance. Since 2001, Feiyue Group's product and technological innovations have accelerated.It is these products with independent intellectual property rights that have the "passport" to enter the markets of developed countries in Europe and America. The sewing machine was invented by the British Thomas Sander in 1790. After 83 years, the Frenchman Timonia produced 80 machines for use by the army uniform factory. In 1851, American Isaac Singer began to build a sewing machine factory. In 1867, the American Singer Sewing Machine Company established a factory in the UK and set up a sales organization in Europe, and the sewing machine began to go to the world. In 1860, the Japanese brought back sewing machines from the United States. In 1900, American sewing machines entered Japan in large quantities. In the 1950s, the Japanese independently developed high-speed sewing machines on the basis of imitation, forcing manufacturers in Europe and the United States to withdraw from most sewing machine markets. China's sewing machine industry produced only 4,000 units in 1949, with more than 500 employees. At the end of the 1950s, the Ministry of Light Industry implemented generalization and standardization of manufacturing technology for household sewing machines.The sewing machine industry developed rapidly and basically met the needs of the common people. The sewing machine became one of the famous "three major pieces" at that time.But in the middle and late 1980s, Japanese products occupied the Chinese industrial market, and the Chinese household sewing machine market gradually disappeared. Telling the above history only shows that in the field of sewing machines, Chinese companies are latecomers, and Feiyue Group is a latecomer among latecomers. It entered the sewing machine industry in 1986. From a common strategic point of view, this is an unattractive industry. . Latecomers have two major characteristics: first, they have strong competitors when they first enter the market, and they themselves are weak; second, they are technology-dependent. The main core technologies are in the hands of the forerunners, and they must start by introducing technologies. The status of the latecomer determines its strategic choice.Feiyue Group's independent innovation and cooperation strategy is the key factor for it to achieve today's champion status.Feiyue Group's independent innovation cooperation is mainly reflected in the following two aspects: 1.Cooperate with domestic scientific research institutions and colleges and universities. As early as 1986 when it started its business, Feiyue Group established a cooperative relationship with Shanghai Sewing Machine Research Institute.After that, it cooperated with Zhejiang University, Beijing Institute of Mechanical and Electrical Engineering, Shanghai University and other institutions. On May 20, 2006, Feiyue Group and the Institute of Computing Technology of the Chinese Academy of Sciences signed the "Framework Agreement between the Institute of Computing Technology of the Chinese Academy of Sciences and Feiyue Group on the Industrialization of Electromechanical Numerical Control Technology". According to the development trend of the sewing equipment industry, the two parties Hefeiyue's medium and long-term development plan decided to establish a strategic cooperation framework for the industrialization of electromechanical numerical control technology.Based on its advanced manufacturing capability and existing product technology, Feiyue Group will absorb and graft the advanced technology of the Computing Institute of the Chinese Academy of Sciences, complement each other's advantages, and improve Feiyue and even my country's sewing equipment manufacturing industry level and core competition to the greatest extent in the shortest time It will transform my country from a big sewing equipment producer to a R&D and manufacturing power as soon as possible; at the same time, it will also enable the continuous industrialization of the advanced technology of the Institute of Computing Technology of the Chinese Academy of Sciences, and fundamentally improve the ability of the Institute of Computing Technology of the Chinese Academy of Sciences to promote the development of productivity and serve the national economy.This is a major strategic move for Feiyue Group to achieve the goal of being "the best complete equipment supplier in the global sewing machine industry". 2.Cooperate with famous foreign professional R&D and manufacturers. In March 2005, signed a technical cooperation agreement in the field of computerized embroidery machines with German ZSK company.In September of the same year, signed a technical cooperation agreement with Italian MIFRA company in the field of computerized flat knitting machines. Cooperation with pioneers is the pursuit of all latecomers.How can this be done?This requires firm belief and ability. The cooperation with Shanghai Sewing Machine Research Institute in 1986 must be due to Qiu Jibao's belief and personal charm.On the basis of this cooperation, Feiyue Group has continuously improved its corporate capabilities.Then use its own capabilities as "capital" to find better partners and carry out higher-level cooperation.Such a virtuous circle of "ability-cooperation-new ability-new cooperation" is the fundamental guarantee for realizing the dream of being a global champion. International operation and independent innovation capability are the "leverage" for Feiyue Group to become the global sewing equipment champion.For these two levers to work, there must be a "fulcrum", which is the niche strategy of focusing on sewing equipment. For 20 years, Qiu Jibao and his Feiyue Group have been focusing on the sewing equipment manufacturing industry (in February 2002, they invested and controlled Graeme Air-conditioning Equipment Co., Ltd., and began to enter the central air-conditioning industry.), for this reason, Qiu Jibao was considered a "fool "Because many local manufacturing factory owners made a lot of money investing in real estate in the 1990s, while Qiu Jibao only made sewing equipment and did not earn "floating wealth" in real estate and other industries. Feiyue Group focuses on the sewing equipment manufacturing industry and has won the global output champion position, which is another vivid practitioner of the niche strategy we advocate.The meaning of niche strategy is a strategy with a niche as the starting point and goal. Starting from a niche means that a company chooses a narrow market, and targeting a niche means becoming a global champion in this small market (because the most suitable , the most advantageous and stable position is the position of the champion). Niche strategy is compounded by deep specialization and international operation. The first step is to choose a narrow business or market (usually in a four-digit industry with small products and small market size), and then Concentrate all resources and capabilities to focus on this niche business, and take strategic actions in accordance with the six principles (leading quality, close customer relationship, continuous improvement and innovation, international operation, building barriers in multiple ways, and building professional capabilities), from the local The first in the market, expanded to the first in the national market, and finally became the global market champion. The 20-year growth history of Feiyue Group is a history of niche strategy practice. The sewing machine that Qiu Jibao chose in 1986 was a typical niche business: the market was small (the sales revenue of sewing machinery manufacturing products in 2004 was 13.6 billion yuan, and in 1986 it was estimated to be only a few billion yuan and shrinking), located in a four-digit In the industry (the industry code is 3653), technological change is not fast, there is no monopoly, large companies do not pay attention, and it has global versatility. It is not difficult to choose a niche business, but what is difficult is to focus on the niche business, and focus on it for more than ten or decades.In the first 15 years of Qiu Jibao's business, there were too many business opportunities in the Chinese market, and many private enterprises grew up by seizing opportunities everywhere and diversifying market opportunities.Such enterprises could not find their own "base" after 2000, thus falling into the so-called "strategic confusion".Feiyue Group is just the opposite. No matter how attractive the external market is, Qiu Jibao only does one thing: produce high-quality sewing machines, from a single product to a series of products, and then to a full range of system products, never leaving one step.This kind of focus and persistence is the key to the success of the niche strategy. Unfortunately, this spirit cannot be learned and can only rely on one's own beliefs. The strategic actions of Feiyue Group basically follow the strategic action principle of niche strategy, especially in international operation and enterprise independent innovation ability (the core of enterprise professional ability).The extensive cooperation mode of Feiyue Group is very worthy of learning and reference for Chinese enterprises in a latecomer and weak position.