dance along the value chain

Looking back on 2002, Yuan Yue, Chairman of Zero Point, was in a good mood. The consulting company "Forward Strategies", which was founded just one year ago, has already generated profits equivalent to the 11-year-old "Zero Survey". As a local leader in China's investigation industry, Yuan Yue is well aware of the strategic significance of being one step ahead. He took the lead in extending the company's business to high-value areas, trying to build a network of value growth based on research business, strategic consulting business as the front, database business and investment management business as the two wings, so as to break the fate of many enterprises' low-value competition .

Starting point: market research

Yuan Yue's zero-point survey is the largest and most famous company among local market research companies. He believes that success comes from the positioning of the business: "Zero-point has not put himself Positioned as the largest company in the industry, we position ourselves as a 'small and medium-sized enterprise with social influence and respect'. This determines the characteristics of the business, one is to have distinctive features, and the other is to adopt an extension strategy. "

He believes that there is a large scope in the Chinese market, one side is a very liberalized market, the other side is a very high degree of monopoly. In such a market space, some of them are specially required by the government to intervene, and some are hardly intervened. Now, most of the market research companies in this market are concentrated in highly liberalized areas, such as daily chemical products and mobile phones, etc.; some are concentrated in areas that use more traditional methods to get orders from the government; some are in the middle. Zero's research business is aimed at the middle part of the market: the consumer market that is affected by both business and policy.

For example, Yuan Yue said that the consumption problem of young people is not only a business problem, but also related to China's family planning policy and cultural consumption policy.

"If you don't look at the actual situation in China, you are wondering why China's mobile phones are changing so quickly? And the fastest changing mobile phones are not rich people - the first is middle school students, and the second is female migrant workers. Migrant workers cannot change their social status, household registration and quality, but they can change their mobile phones and clothes. When a female migrant worker enters the city, she is a unkempt little girl, and after 8 months, she looks better than the people in the city. Gender, culture, society Class changes and the way they feel social pressure have led them, not the female white-collar workers we imagined, to become the leaders of a city's fashion. Female white-collar workers are fashion promoters, not leaders."

"In this way, and Compared with international peers, Zero Point can have unique investigation and analysis," he said, "This creates a market, but this market is not a dominant market, it is a major market for us, interesting, very willing to do, There is an ongoing need for it in this market." Therefore, Yuan Yue is not worried about how much influence the multinational market research firm will have on his business. The special market positioning of the zero-point survey business gave him this confidence.

Extension: Strategic Consulting

In 1992, when Zero Survey started, market research was a new term. However, due to the low barriers to entry in the market, many local companies appeared in the survey industry overnight, and foreign counterparts also rushed to the Chinese market. There are hundreds of companies in a small industry with a scale of only 1.9 billion yuan, and the competition is extremely fierce. Not long ago, Yuan Yue extended the company's investigation business downstream to higher-value consulting business, and established a consulting company called "Forward Strategies" for short.

To expand from investigation business to consulting business is to extend from the business link of analyzing problems to the business link of solving problems. However, the content of the consulting business itself is also very rich and complex. What kind of consulting business should Zero Point choose to occupy a place in the Chinese market dominated by international consulting companies?

In Yuan Yue's view, the business models of most consulting companies in China can generally be divided into four categories: one is IT consulting, which ultimately adopts technical solutions; the second is financial consulting, which is characterized by basically There is no need to do surveys; the third category is strategic consulting, which is about what will happen in a few years, and the important thing is macro forecasting, and basically no survey is required; the fourth category is strategic consulting, such as how to solve a certain problem this year? What if the company goes in a certain direction? How to reshape banking culture? This is a very specific management and marketing level solution.

"Among the four types of consulting business, the fourth one is the least interesting to large consulting firms, because the first is the least expensive, the second is the most laborious, and the third is the easiest to see flaws. Therefore, strategy consulting has no Strong competitors—large companies are concentrated in the first three categories. In strategy consulting, you may encounter some large consulting companies, and the client asks them to do both strategy and strategy, so they sometimes cannot Don't do some strategy consulting. In more cases, the client has asked a large company to complete the strategy. How to implement the next step requires a local company to do it. I personally think that in this chain, the most profitable is not Strategic consulting, but what is most lacking in a fuller service chain, but also the most important, is management consulting at the strategic consulting level.”

Years of investigation experience told Yuan Yue that to solve the problems of Chinese enterprises, it is necessary to pay attention to China's national conditions. He finally positioned Zero Point's consulting business as strategic consulting. One of the reasons is that considering the closely related relationship between this business and the upstream investigation business, he hopes to use the investigation to discover the special background of the formation of consulting solutions, improve the effectiveness of its solutions, and give Customers provide more practical help.

"To solve the management problems of Chinese enterprises, it must be a combination of public management and business management, not just business management." Therefore, Yuan Yue believes that he has entered a small business, but he is very interested in it. area of expertise.

Basis: Resource Advantage

After clarifying the business orientation of extending downstream, in 2002, Zero Point Survey Company held 50% of the shares and the other 4 investors invested 50% of the shares to establish a forward strategy. Responsible for strategic consulting business.

Yuan Yue once considered acquiring other companies, but after investigation, he did not find any company that is very consistent with the development line of Zero Point. Some small companies have not gone beyond the scope of personal planning. A company that has begun to take shape, mainly engaged in investment consulting business. Although some are doing management consulting, their main model is to integrate other people's companies with management concepts. Yuan Yue believes that it is not the same as his own, so it is better to recruit a group of people to start from scratch. In this way, after some analysis and selection, there is basically no ideal company for acquisition.

As for the specific business direction, Yuan Yue warned against thinking that simply extending the upstream business mechanically and extending to the downstream business will be all right. After the survey industry appeared to provide solutions, a considerable number of people believed that survey companies should expand into consulting business, but the basic extension method was to write longer than the original length of the suggested part of the survey report.

He points out: "Actually, the solution of strategy is very different from investigation. Investigation is about finding the facts, summarizing what it means, and strategy is saying what it means, what do I have to solve it. Facts Usually it is objective, but it is subjective when interpreting the meaning of objective facts, and it is more subjective when choosing strategies. There are many strategies for choosing, for example, some models have been summarized from many past studies, and the solutions to similar problems are usually You can think about the same model, and then accept the data we get from consumers and competitors to make corrections. There are also models in market research, but the purpose of the model is different from that of the strategic plan.”

So, Yuan Yue Divide the consulting business of forward strategy into four main areas and three future directions. The four main areas include branding management, channel management, marketing process management and in-house consulting. The three future business directions are logistics, integrated marketing and category management.

According to Wu Yin, the strategic consulting director of Forward Strategy, the resource base of "culture + data" accumulated through more than 0.10 years of research is the source of the competitive advantage of consulting business. He said: "The biggest advantage of foreign companies is international experience and strong database support, but many databases are databases of foreign development experience. They also collect databases in China, but this database cannot be connected with foreign databases, and must use social and cultural data. It is only possible to make a comprehensive judgment based on the understanding of the company. ZERO has a very good foundation in these two aspects.”

Feng Rixi, CIO of Forward Strategy, believes that ZERO’s customer resources are also a foundation. Zero has a client, a big car brand in Beijing. Zero Point did market research for this company 10 years ago. The company originally produced tractors and other agricultural vehicles. In recent years, it has also produced various products such as agricultural vehicles, tractors, small trucks, pickups, cars, and large cars. Therefore, problems of management confusion and branding appeared. The forward strategy proposes the brand strategy of "one core, two wings, and classified management", that is, to clarify what the core brand is and what the brands of the two wings are, and then classify and manage the products, which has become the most successful case of the forward strategy.

Organization: Seam Connection

From the perspective of the business chain, it is reasonable that upstream and downstream businesses support each other due to the natural relationship between upstream and downstream businesses. But this does not mean that the organization of upstream and downstream businesses must be seamless and monolithic. On this point, Wu Yin appreciates Yuan Yue's approach very much. He said: "Yuan Yue's design is very interesting. We have formed the strategy company separately, all under his chairman, and the zero-point investigation is separate. Now our report to the buyer needs to go a step further. It is not to provide simple data analysis results, but to do in-depth analysis and research, and to develop strategies." The characteristic of Yuan Yue's business organization design is that the upstream and downstream businesses can be relatively independent in business processes and maintain a certain distance. In his words, "the gap". In this way, the downstream forward strategy becomes the "internal customer" of the upstream zero-point survey, which creates a relatively large pressure on the value-added of the survey business, plus the pressure exerted by external customers on the value-added of the downstream consulting business, the final result of the company's consulting business. Customers will be willing to pay for high-value services.

Yuan Yue said: "In the middle of the value chain extension, the most important work is gap connection. There is a problem in the extension, the downstream business personnel basically do not understand the upstream business, and the upstream personnel do not understand either. In the downstream business, there are gaps in the middle. If the gaps are well connected, upstream and downstream personnel can cooperate with each other. Therefore, when we allocate personnel, there must be some people from upstream to downstream. For example, our strategic consulting director is from the He was sent by the upstream, and his role is to repair the seam. He has rich experience in the investigation business and has a good sense of strategy, so he is responsible for this part of the work."

Wu Yin further explained this: "It is true There is such a problem. The people we come in now have at least a few years of work experience, but these people have poor ability to interpret and analyze data. This problem is not only our company, but the whole of China. I don't understand the data. One of my tasks is to act as the interface between the two units of the investigation business and the consulting business. If I don't understand, find me here, and if I don't understand, find me there."

For the gap connection, Yuan Yue also uses another One trick is to serve as the number one leader of the new business. He understands this: "Our forward strategy company started with another colleague, but things went wrong very quickly. When he started a new business, if he could do it well, he would immediately think 'why am I? I have to do it for you'; if it doesn't work well, he doesn't know how to go on. Therefore, I have set a practice in extending to the downstream value chain, that is, I usually do it for the first year, and I can basically use this year to prove that we need to How to do this business, in order to generate the desired financial benefits. The next year I will let Yin."

The pressure of human resources also comes from other aspects. The business extension of Zero Point has created a feeling for employees and even some senior personnel that resources are concentrated in the downstream value chain. Yuan Yue said: "Do they feel that this extension means that the upstream business of the chain is no longer valuable downstream? It feels that they are not valued, or they cannot grasp their future development direction. Therefore, we will provide employees with channels to allow They realize their own value according to different directions. This depends on the individual's advantages to choose the position of the individual. After we lengthen the value chain, it is conducive to the rational use and allocation of talents."

In order to relieve the pressure of human resources, Zero Point Some measures have been taken. The first is personnel protection. For example, the current focus of forward strategy is customers in industries such as telecommunications, banking, automobiles, and fast-moving consumer goods. Therefore, we must first ensure that consultants for these industries meet the requirements of industry background, knowledge, and work experience.

The second is to improve the original survey business one step further, or to look at the survey business from a consulting perspective. Feng Rixi said: "We have raised the survey business to a higher level, that is, it is not a simple survey report. We also require consultants to go deep into the most basic part of market research, including extracting questions, writing questionnaires, and going out for surveys and interviews. It is not their business, but each of them must work for a period of time and experience it, so that they will read the survey report from a higher height. We can also ensure that the consulting plan generated on the basis of market research is What is supported by sufficient data is based on analysis, has depth, and is valuable.”

Future: Value Network

In Yuan Yue’s view, Zero Point’s initial investigation business belongs to The survey industry, and later the consulting business, belongs to the consulting industry. The survey industry and consulting industry are just the upstream and downstream businesses of a larger industry. On the two wings of this larger industry, there are two other spaces for value growth, namely the database business (industry) and the investment management business (industry). So he established Zero Point Index Company and Vision Investment Company, respectively responsible for the operation of these two businesses.

According to Yuan Yue's vision, Zero Index is currently using the Internet to conduct intensified research on social culture, in order to strengthen the investigation business and support the strategic consulting business, and gradually develop into a database-centered company, raising funds for listing, and helping the company's Long-term development and firm product foundation. The long-term investment is mainly to evaluate the business value, and it is also necessary to conduct an investigation first, and then use the consulting model to realize the business value.

Yuan Yue gave an example of bank asset processing when talking about the value space of investment management business. In the process of bank asset processing, the goal of value-added should be completed. Traditional asset processing models are all simple transactions, and what this model lacks most is the evaluation of the business value of assets. If there is still 30 million yuan in residual value of an item, and 20 million yuan in business value, the total value is 50 million yuan. Under the simple transaction mode, it was sold at a discount of 30 million yuan and a maximum of 25 million yuan. After evaluating the business value, the direct benefit to the asset owner is that there is a room for appreciation.

He said: "Many non-performing assets in banks have room for appreciation. These assets are only stored in the bank because the business owner has no money to repay the loan, not because their business value is not good. There are many non-performing assets in banks. Some are very good assets, but they have a bad reputation because the company cannot repay the loan. For investors, the most important investment motivation is to find the difference here. For something of 30 million yuan, investors do not want to exchange 30 million yuan for it Your 30 million assets will turn live money into dead money, unless there is room for a 20 million yuan appreciation. For investors, although the assets have business value, this business value becomes a real value, which requires There is a set of operation management model, that is to say, the combination of business value evaluation and management model, together with other supporting factors, constitutes a value. This is exactly the problem that our investment management business and strategy consulting business jointly solve. "

Looking back on the expansion road of Zero Point's value enhancement, Yuan Yue summed up several issues that should be paid attention to in the expansion process. One is the shaping of conditions. Extending to places with high added value, the threshold is high and the barriers are large. He said: "Just seeing the fruit is good on the top of the mountain, but there may be problems when climbing up. Many companies die during expansion because they have done impossible things to kill themselves. We are very cautious, we What you do, like any project you do, must be investigated, and only when the investigation is clear can we know what the matter is. Some projects can be done without investigation, and the money is easy to come by. But we have so far We haven't done much. Therefore, the projects we do must be under our control. If everyone does things that seem easy, the core business will be scattered."

Second, in the process of cultivating conditions, Need to loosen control. In the development of new business, new resources are constantly added, and it is very important how the new resources and the old resources will share the results in the future. Yuan Yue said: "There is a principle when extending to the outside world. The farther away we are from our original environment, the looser our control will be. We take up 85% of the shares in the database business that relies on the investigation business, and only in the strategy consulting business. It accounts for 50%, and when it comes to the investment management business, it only accounts for 39%. In the extension of the value chain, we have such a mentality, and we make combinations according to the resources that everyone brings. It is not about holding everything, but we have the final say. "

The four businesses of investigation, consulting, database and investment management under Yuan Yue have formed a close relationship. 60-70% of investment management business is investigation and strategy, and 30-40% of strategy consulting is investigation. Yuan Yue confidently navigates this interlocking value chain network.

Closing remarks: If you have any opinions or comments on this article, please email: ceceditorial@globalsources.com

dance along the value chain

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