Chapter 40 4. It is hard to describe Danone's "fate"

He Boquan gradually fell into a disadvantage amidst anxiety and helplessness.He is a person who has the courage to learn. When a problem starts to emerge, he will quickly find a solution. However, until he left Robust, he did not actually come up with a strategic plan to counter Wahaha.In a sense, this sense of powerlessness is also one of the internal factors that prompted him to make up his mind to leave sadly.For a while, he was so fascinated by Zong Qinghou's marketing model that he was not afraid to follow suit.For example, Robust tried many times to establish a joint sales organization but failed; after 1998, Wahaha launched new products, engaged in new promotions, and invited celebrity endorsements, and Robust would definitely follow up after a few months; In terms of setting, Wahaha does not have a vice president and neither does Robust.On the one hand, this shows He Boquan's open-minded and calm side, but on the other hand, it also caused a lag in the implementation of certain strategies.In many peak season promotions, Robust was often passive due to losing the opportunity, and was always in the position of defense and follow-up.

The failure of market competition made Boquan He start to reflect on the strategic design and operation structure of the enterprise from the perspective of the system. In 1998, he announced that he would spend 12 million yuan to hire McKinsey Consulting Company.This was the most expensive strategic consulting project in China at that time, and He Boquan's generous investment caught the attention of the media for a while. McKinsey is famous for its strategic design, He Boquan obviously hopes to use the power of this foreign consultant to fundamentally rebuild Robust.McKinsey sent 6 experts to station at the door of He Boquan's office. Six months later, they submitted a nearly 300-page report entitled "Creating a Leader in China's Non-carbonated Beverage Market".It is said that this eloquent report mainly involves the assessment of the current situation of the group today and its goals, what roads can be taken in the next step, suggestions for deciding which roads to choose, how to operate, and so on.

He Boquan used the word "super value" to evaluate this consultation. He said: "12 million yuan is a very worthwhile investment. It makes our future development ideas much clearer. After one year, today's group from the direction of , are basically operating according to the direction suggested by the report, such as capital preparation, organizational structure and market strategy.” However, from the perspective of future enterprise operations, this super long “practical encyclopedia” report did not give Robust has brought substantial effects, at least from the perspective of the actual effect in the future, He's words are not sincere.

At the end of this year, He Boquan signed an agreement with SAP, OR Partner and other companies on the implementation of the EPRR/3 system project, and the investment is said to have exceeded 10 million yuan.According to He Boquan's vision, through these measures to re-create the modern management structure of the enterprise, the vertical axis is the strategic direction of "creating a leader in China's non-carbonated beverage market" proposed by McKinsey, and the horizontal axis platform is the EPR provided by SAP. R/3 routine system, and the core is "today" continuous improvement of management marketing methods, He Boquan's determination can be seen.As far as this generation of Chinese entrepreneurs is concerned, there is no obstacle in terms of mentality to accept new ideas and new models. The difference between their strengths and weaknesses lies only in the level of execution. What is more critical than execution?

While trying to innovate the internal system, He Boquan also began to seek the support of the capital market.He believes that Wahaha's huge operating capital obtained through a joint venture with Danone is one of the important factors for Wahaha to defeat Robust.He Boquan conducted a year-long secret negotiation with Nestle, Switzerland, the largest beverage and food giant in Europe. During this period, he also contacted many multinational companies such as Pepsi and Coca-Cola, as well as the world's largest investment institutions such as Morgan Stanley, Merrill Lynch, and Goldman Sachs.However, in March 2000, when he announced Robust's joint venture partner, the national media was still in an uproar: the French company Danone that appeared on the list of Robust's joint venture turned out to be the French company that married Wahaha back then.

According to reports, the joint venture between Danone and Robust includes the following: jointly establish "Robust (Guangdong) Food and Beverage Co., Ltd.", involving Robust milk yoghurt and bottled water two key products.The joint venture company is controlled by Danone Group, and Robust Group is responsible for operation and management.The Robust trademark is still owned by the Robust Group, and the newly established joint venture company is licensed to use it for a fee.Danone's one-time injection of more than 1 billion yuan into Robust. He Boquan explained his choice in this way: "We were the first to negotiate with Nestlé, but the negotiation failed.

Nestlé is a great old company, but sometimes old means inflexible.We and Nestlé have different ideas on management rights, trademarks, and future development of the company.For example, the trademark, Nestle has to buy 100% first, and then the joint venture is the plant and equipment of the company. This is unacceptable to us, so we did not choose Nestle.The purpose of the cooperation between Goldman Sachs and other investment banks and Robust is to sell the company one day, which also adds a lot of variables to the future of the company.Danone is much more flexible, and it is in the strategic interest of both parties to cooperate with it. "

In addition, the most delicate and sensitive part of the cooperation with Danone is the relationship with Wahaha. He Boquan put it this way: Wahaha is the main competitor of Robust. After the joint venture with Danone, this competition pattern will not change, it will only become more benign, and the focus of competition will be on the interests of consumers.Mr. Zong Qinghou and I are friends, but we do not give in to each other in the market. As long as the two parties adopt legitimate means of competition, we can fight hard in the market. He's confession is impartial and impeccable.But from a marketing point of view, the so-called "consumer interests" can be interpreted in many ways.At least from Danone's point of view, there are many ways that it does not want to see, such as the huge advertising costs it is forced to invest in order to block its opponents and the price war where the bayonet becomes popular.In fact, more than a year after Robust’s joint venture, He Boquan quickly invested a huge amount of advertising, and launched a terminal competition with Wahaha in various key markets, and its purified water even made a large profit reduction. suddenly thickened.Zong Qinghou said frankly that Wahaha has been under unprecedented market pressure, marketing expenses have doubled and the profit margin of the entire industry has suddenly decreased.In this kind of competition, although Robust has regained the initiative in some markets and its market share has risen, the overall benefit of the company has not increased year-on-year with the growth of sales, but has shown a downward trend.Looking at it now, this may be the "last mistake" He Boquan made in Robust: after he obtained a huge amount of funds, he did not carry out sufficient planning, and prepared for product development, talent reserves and staged market goals. In the case of insufficient resources, it hastily launched costly terminal competition and price wars with powerful opponents, thus accelerating the consumption of corporate strength.

In August 2001, Robust was forced to announce a major change in its organizational structure. The four founders, including He Boquan, Yang Jieqiang, all left their original director positions. precursor. He Boquan once interpreted the organizational structure of Robust: before the reform, Robust was divided into several departments according to production, supply and sales, and then all branches across the country were responsible for marketing.In order to complete the sales task, the branches like to focus on water and milk yoghurt, which are easy to sell. Other less mature products such as tea drinks have not worked hard, which is very unfavorable for the maturity of new products.To make matters worse, since the production department is only responsible for quality and cost, the sales department is only responsible for sales and expenses, and no department is responsible for profit. As a result, only the president of the entire group is responsible for profit.

After the reform, Robust adopted the structure of the divisional system: set up 5 divisions, 8 functional departments and 1 sales headquarters under the president.The purpose is to subdivide profit centers, and each of the five business divisions, including bottled water, milk, yoghurt, bottled water, and tea beverages, becomes a profit center.At the same time, the middle layer is reduced, and the power structure of the group has changed from the previous five-person meeting to one president and 14 general managers, forming a flatter organizational structure. How much of this interpretation is based on He Boquan's original intention is unknown, but there are many places where it can be questioned.Whether an organizational structure is efficient or not requires consideration at two levels, one is its ability to execute and implement, and the other is its ability to integrate and respond to competition.Judging from its short operating time, the actual effect of this change does not seem to be very great, but there is suspicion of self-disruption.

In the autumn of 2001, the financial media suddenly spread the rumor that "Wahaha and Robust may get closer". "China Business News" revealed in a report on October 18 that: The exact news from Hangzhou said that in October, Hangzhou Wahaha Company is working overtime and busy to acquire Robust, the biggest competitor. When the time is ripe, the content of mergers and acquisitions will be released to the outside world. This unequivocal news disclosure immediately caused an uproar in the industry, and various speculations were flying in the sky. Some said it was a new move of Danone’s expansion strategy, and some said it was a tacit alliance between Wahaha and Robust. It is also said that Zong Qinghou and He Boquan each have unspeakable secrets.However, just like all rumors of "die at sight" mergers and acquisitions, this marriage rumor is destined to become a verbal battle that will end without a problem amidst the turmoil. Although the plan of the Wa-Le alliance was "aborted", there are still rumors about the drastic changes in Robust. On November 30th, all the rumors were settled in a short press release: He Boquan and Yang Jieqiang, Wang Guang, Li Baolei, Peng Yanfen, the Robust team that was once known as the best combination of "four dragons and one phoenix" The entrepreneurial team announced their collective resignation. He Boquan said in his final statement that, as an operator, we had serious differences in our understanding of the company's future development strategy with the controlling party Danone, and the company's performance growth this year has not reached the expected goal. In order to respect the major shareholder's decision , At the same time, we also weighed the pros and cons with the board of directors before making the choice of collective resignation.The straightforward He Boquan did not shy away from the media: "For the current result, the joint venture really did not expect it at the beginning." However, he still found a step that allowed Danone and himself to step down: this is the step that China has reached after joining the WTO. first lesson. He Boquan's motto has always been hung in his office: "Look at the good and the bad, and forget the sorrow."When He Boquan left the office where he spent all his youth, he took only a few personal items with him, one of which was this framed calligraphy. He Boquan is humble and peaceful, and has always been praised in the industry.Hu Zhibiao, who became famous in the first battle with Aiduo VCD, was successful at a young age, rebellious and rebellious. There are only two entrepreneurs who claim to be attractive in his life. One is the deceased Japanese Matsushita Konosuke, and the other is also born in He Boquan from Xiaolan Town, Zhongshan. Zong Qinghou commented on his rival for 10 years: He Boquan's fading out is by no means the ending I hope to see. Once there is no rival, the enterprise will lose momentum.Also, I lost a friend. In the Spring Festival of 2002, He Boquan sent a New Year card designed by himself to friends at home and abroad who cared about him, saying: "Looking forward to you, sneaking in to visit old friends in your busy schedule, you decide the program, and accompany me to do it... Activity principle: No Wear a suit, no tie, no talk about work, keep a smile on your face and heart, and don’t pay the bill. Deadline for the event: September 1, 2002.” There is also a small card of his calligraphy attached to the envelope of the New Year's card, which reads: "Willing: If you give up small, you get big, if you give up, you get big, if you give up, you get something, if you don't give up." The mystery in it is memorable. He Boquan was born in 1960. He quit his job at the age of 28 to start a business. He bid farewell to Robust at the age of 41. It was the age of his career. He Boquan's New Year's card During He Boquan’s management of Robust for more than ten years, the brand ownership of “Robaus” has always been entangled in his business process like a strange nightmare. Its erratic and uncertain influences He Boquan Marketing decisions, such as the ups and downs of brands such as "Today" and "Anti-Douxing", are all related to this, and the competition and gains and losses about it have become a symbol of He Boquan's success or failure.The fate of Robust can be regarded as the most vivid brand teaching material.