Asset-light debate

“There are no industry restrictions on light assets. Leading companies in any industry can develop an asset-light model when they develop to a certain scale and their soft power such as branding and management are enhanced.” Zhu Wuxiang, a professor at the School of Economics and Management of Tsinghua University, told reporters this way. , the reporter checked the domestic monographs on "asset light" during research, and found four books in total, two of which are also the earliest two monographs on light assets in China. Zhu Wuxiang is one of the authors, and the other author is now settled The United States, so Zhu Wuxiang became the best choice for interviews.

"Asset light" is to use the least amount of own funds to maximize profits. In this type of model, companies hold on to their core values and outsource non-core businesses such as logistics and production to other companies. Asset-light operation is a value-driven capital strategy and a new structure of corporate strategy in the Internet age and knowledge economy age. The specific application in China was first seen in McKinsey's consulting plan for Guangming's national expansion, but it was questioned because Guangming lost in the national market competition, and there is a view that it is the light asset strategy that has hurt Bright's brand and Lost the opportunity to compete for national supremacy. The reporter contacted McKinsey, hoping to interview this case and the asset-light model, but received no response.

Zhu Wuxiang, a scholar who has gained fame in recent years for his research on corporate finance and business models, is still a firm supporter of light assets. Regarding the positive and typical case of light asset light in the book, the ending was unsatisfactory. He still believes that it is not the fault of light asset itself.

There is no lack of the same views as him. Li Zijie, director of the Department of Management of the International Business School of the University of International Business and Economics, and Huang Xiangyuan, a well-known financial writer, believe that there is no problem with light assets in the Guangming case. The problem is the absence of management or the lack of product strategy. error.

Zhu Wuxiang told reporters, "The best company must be asset-light. Lightness is the highest level of an enterprise."

Born to be talented

In the industrial structure competition theory of management master Michael Porter, the growth of market share and quantity is the foundation of competition, but the competition of modern industrial ecological operation mode only emphasizes Market share and volume growth are not enough and may even mean danger. "The market share of products alone is meaningless," said Yin Jian'an, chairman of Shaangu Power. It may be worth considering by many Chinese hidden champions in the world factory chain, whether their industry is limited by scale and cannot attract enough competitors to enter. Does a large share in a small market also mean that it is difficult to grow up in a limited scale.

Shaangu Power has broken the limitation of its own industry structure with the light asset model. They are smartly aware of changes in the market and customer needs, so in non-main business areas, equipment and services are outsourced as much as possible. Going a step further, they not only provide the system, they also "rent" the system, replacing one-time transactions with long-term services. This not only allows customers to save a lot of one-time capital investment, but also makes it easier to focus on the main business. It also changed Shaangu from a transaction-oriented enterprise to a service-oriented enterprise, which has lengthened the income curve several times. (See page 19 of this issue for details)

Thinking around customers and profits, leveraging others' resources and outsourcing, focusing on customer preferences and profit growth to maximize shareholder value. This is an important theoretical basis for asset-light operation, which is being vividly practiced by heavy industrial enterprises such as Shaangu Power.

Any industry can be applied to light assets, no matter whether it is light or heavy, natural talents must be useful, and are not limited by "birth". However, "birth" can be used as the basis for the classification of two major categories of asset-light. Zhu Wuxiang believes that asset-light enterprises can be divided into two categories according to "birth". Management and assets are separated to achieve lighter and lighter assets. Shaangu Power falls into this category.

The second type of enterprise is the innately light gene enterprise, and their name is light company. Zhu Wuxiang summed up their characteristics: very light at the beginning; every link in the industry chain has sufficient capabilities; the stock is relatively mature, so some new concepts are needed, value-added services on the stock, and subversive packaging of traditional business models And the ability to re-imagine, especially the transfer of practices such as standardization and electronic sales to traditional industries.

The most typical light company is the "computer + mouse" e-commerce enterprise, but it can be found in many industries such as traditional manufacturing, retail, education, Internet, road freight, and publishing. "Light Company". In other words, "light company" is just a term for a business model, and it is not subject to the limitations of the industry itself. We selected China Dongxiang, a sports apparel company, as a case study of a light company. This young company with a compound annual growth rate of more than 100% has the lightest brand as its biggest asset.

Light also has a way

The emergence of asset-light operation is the result of the globalization of capital and the rapid evolution of the industrial ecology, and outsourcing has become a trend. The Internet accelerates the speed and scope of technology diffusion, lowering the threshold for high-tech , traditional mass production no longer necessarily produces economies of scale. Yin Jianan, chairman of Shaangu Power, analyzed that when the specialization of labor becomes clearer and deeper, it becomes almost impossible for an enterprise to control all links at the same time. If the enterprise still tries to control every link, the result is that every point cannot be controlled deeply, and it cannot give full play to the advantages and specialties of the enterprise. "From the perspective of our company, 80% of the manufacturing links can be abandoned. This is also the adjustment of the industrial structure."

However, "abandonment" means a higher level of integration of resources and management capabilities. When you're getting lighter, it's important to recognize that the most important things can't be taken lightly. It is not a problem for a dairy enterprise to sell the farm and only send a management and technical team to control and implement OEM production. However, if the management is out of control, product quality declines, and even food safety problems occur, it will be a big problem.

Zhu Wuxiang believes that due to the long industrial chain and rapid expansion of the asset-light model, modern information management methods are very important. On this point, he praised Little Sheep for doing a good job. The global unified real-time centralized management platform supports Little Sheep to carry out instant and powerful control of extremely scattered operating institutions, so that operations in various places can maintain a sensitive response.

In 2003, Shaangu established a Shaangu complete technical cooperation network. This is a global association, and well-known companies including GE, Siemens, Emerson, etc. are members of the association. Shaangu Power enhances the value of the enterprise by strengthening the management capability of the supply chain. By participating in the integration of global resources to meet market demands, Shaangu has also greatly improved its position in the global industrial chain and its negotiating ability.

In terms of the development stage of the enterprise, is the distribution of light and heavy assets important? China Trends Qin Dazhong believes that when the scale of the enterprise is still small, it is a good structure to be extremely asset-light, and when the total assets reach a large scale, it must "become heavier" to a limited extent from the perspective of financial balance. "No one will be assured that a company with total assets of more than 8 billion has more than 7 billion in cash."

The asset-light Meters & Bonwe changed its franchise-based model into self-operated stores after its listing. The main mode also shows a trend from light to heavy. In Li Zijie's view, the most important thing for small businesses is flexibility, so most assets will be taken out, so they generally adopt an asset-light strategy. As the scale of the enterprise becomes larger, in order to obtain a competitive advantage, it generally tends to generate some heavy assets. "The clothing industry is very competitive, and stores are very important in the process of competition. Store resources are a scarce resource. Therefore, Meters Bonwe will strive for the ownership of stores after becoming bigger. In fact, McDonald's, Chow Tai Fook and other companies All of this is done, because the value of scarce resources will inevitably rise in the process of competition." He said that in addition to the scale of the enterprise, environmental uncertainty, enterprise strategy, and technical characteristics will affect the company's priority strategy.

Zhu Wuxiang said that in the process of enterprise development and evolution, the intermediate links will change due to various reasons, which is a natural phenomenon in the process of enterprise evolution, but the highest state and final direction are light. Zhu Wuxiang analyzed that the phenomenon of Meters Bonwe changing from light to heavy actually reflects the problem of distribution of interests between asset-light enterprises and collaborators. Franchise stores have greater benefits from selling, so they are direct-sale stores. He particularly pointed out that asset-light management and collaboration are important, so the benefit distribution mechanism should be transparent and mature.

Three levels of asset-light operation content

Strategies need to make the most critical business model design

Operate according to strategic choices, re-integrate resources, and draw up implementation plans

Organize appropriate organizational structures, Establish an effective management mechanism to cooperate with the strategic and operational levels Source: Sun Li, Zhu Wuxiang