Hisense: Technology-driven industry-leading

In the recently announced 25th (2011) Top 100 Chinese Electronic Information Enterprises list, Qingdao Hisense Group ranked sixth in the list in terms of enterprise scale, efficiency and R&D capability.

From a medium-sized factory with an annual output value of 730 million yuan, sales revenue of 412 million yuan, and profit of 12.86 million yuan in the early 1990s to a multinational electronic information industry group with global sales revenue of 63.7 billion yuan in 2010, Hisense Group has expanded in scale More than 100 times, it has been in the forefront of China's top 100 electronic information companies for many consecutive years; Hisense Group has ranked first for two consecutive years in the National Bureau of Statistics of China's top 500 comprehensive competition among large enterprise groups.

In the fiercely competitive industry of home appliances, Hisense has become the most powerful in the industry with its forward-looking strategic vision, steady and "technical enterprise" tenet, scientific management mechanism, and low-end resource-consuming competition. One of the "big companies".

Hisense has been involved in the fields of home appliances, communications, and information, and has taken the lead in building a 3C electronics industry structure in China. Its leading products include TVs, air conditioners, refrigerators, mobile phones, software development, and network equipment.

On May 11, 2011, Hisense held a strategy conference. Chairman Zhou Houjian proposed that Hisense will enter the era of "intelligence" in the next 10 years. Assemble", expanding from traditional home appliance production to a comprehensive enterprise that relies on products and enhances value-added services.

Faced with the opportunity of triple play, many companies in the home appliance, Internet, communication equipment and other industries are thinking about when to cut in and how to share a larger piece of the cake with the advantage of the leader. As the first to announce that Hisense has stepped into this blue ocean, where does its courage and confidence come from?

Wang Zhihao, Vice President of Hisense Group, replied: "We have the core competitiveness to lead the industry trend: 1. Complete industrial chain. 2. Years of technical reserves. 3. Perfect integration between new technology reserves and traditional industries."

p>The layout of the industrial chain promotes the transformation of business models

In the late 1990s, Hisense proposed 3C integration, and its computer and network security equipment are also known in the industry.

In terms of smart TV, in 2002, Hisense, together with Sina and Sunshine TV, took the lead in launching Internet TV in the industry. But in the end, it all became an "interesting attempt", and Zhou Houjian also humorously said: "From a 'pioneer' to a 'martyr'". When summarizing the reasons, Hisense leaders came to a unified conclusion that the industrial chain is immature.

Wang Zhihao believes that the most important point of running a business is to seize the "time point", which is not enough sooner or later. In 2002, it was too early for the industry to integrate 3C, because it was not fully prepared in terms of technology or standards. At that time, the network bandwidth, embedded software operating system, and interconnection standards all became the bottleneck of smart TV development.

“If the industry chain is not established, it is impossible for one person to make an industry.” Wang Zhihao concluded, “To give another example, the flat-screen TV was launched in 1968, but the real industrialization has been in the 1990s, and in the past 20 years. It has been many years." In fact, the 3C "surfing" Hisense followed Microsoft, but in the end Microsoft gave up.

If you can't grasp the timing, it is easy to "die on the beach" if you rush too early. This is the lesson that Hisense learned in the first 3C attempt. However, this meaningful attempt has provided Hisense with experience, and more importantly, it has figured out the direction and accumulated a certain technology and R&D team.

Since 2002, Hisense Group has started the layout and technical reserves in the "intelligent" strategy.

First, develop and operate a support platform. In the era of smart TV, the TV industry has changed from an industry around products to an industry around services. To provide users with value-added services, there must be a powerful streaming media distribution network supported by cloud computing, that is, a powerful broadcast control platform. As the chairman of Hisense Product Network Company, Wang Zhihao said that Hisense has been involved in this field since 2005, and the support and application platform it has developed is leading in the industry.

Second, Hisense is a member of the DLNA international standard and one of the initiators of China's "IGRS". Hisense teamed up with Lenovo, TCL and other companies to create the "IGRS" standard, which is the standard for interconnection and interconnection of home smart homes, making interconnection of products from different manufacturers a reality. Today "IGRS" has become an international standard. This standard lays the technical foundation for Hisense's intelligent control and data exchange of TVs, mobile phones, air conditioners, refrigerators, and washing machines. Hisense is the developer of the application protocol.

Third, the embedded development technology of Hisense intelligent terminal is developed by Hisense Mobile Technology Company. The R&D team of more than 500 people independently developed the TV operating system HITVOS, which is compatible with mainstream operating systems including the Android platform. On this platform, Shanghai Xincheng put into operation a multimedia terminal application mall, developed and opened its own software and experience solutions to the society.

Hisense's flat-panel TVs have maintained the advantage of maintaining the first domestic market share for 8 consecutive years, and the stable position of the domestic first in intelligent transportation and fiber-to-the-home modules have become Hisense's trump card. Through the reorganization and integration of Hisense Broadband Company, the investment in the establishment of Hisense Media Network Company, and the development of smart TVs, until 2011, Hisense Multimedia intelligent industry chain structure has tended to be perfected, including operation platform, access terminal technology, and communication technology. The time is ripe for a "smart" strategy.

Technological innovation drives the development of the industry

Hisense adheres to the development strategy of "establishing an enterprise with technology and operating steadily". It has a national enterprise technology center, and its annual investment in technology research and development accounts for 5% of global sales revenue. Hisense has established R&D centers in Qingdao, Shenzhen, Shunde, the United States, Belgium and other places, and initially established a global R&D system. It is technological innovation that drives Hisense to grow into an industry leader in an environment where foreign countries monopolize core color TV technology.

Chip is the foundation and core of the information industry, and determines a country's technological level and competitive strength. Foreign countries call it a "life-and-death industry" and "industrial food". The dominant position of the United States and Japan in the field of electronic information products, It is precisely because they master and monopolize the design and production of core software, integrated circuits and key components.

In 2005, Hisense broke this monopoly, and 75 million domestic TVs had Chinese chips. China's first digital TV processing chip with independent intellectual property rights - "Xinxin" was born in Hisense, which means that it has always been in the electronics industry. Chinese enterprises at the end of manufacturing have the confidence and strength to enter the upstream field of the industrial chain and reduce the cost of the entire color TV industry. Zhou Houjian, who was an engineer, said: "The core chips commonly used in digital TV include receiving and demodulating chips, decoding chips and digital video processing chips. The digital video processing chip is the heaviest chip." Premier Wen made a special inscription for this: " Based on independent research and development and technological innovation, an enterprise can have vitality; with independent intellectual property rights and core technologies, an enterprise can be competitive."

After "Xinxin", Hisense's road of technological innovation has never stopped.

In 2005, Hisense launched the vector frequency conversion technology with independent intellectual property rights, which not only broke the 8-year technical blockade of Japanese companies against China, but also successfully applied to refrigerators and other products.

In the field of LCD modules, Hisense began to develop and build production lines many years ago. A few years ago, Hisense found at an exhibition that upstream companies began to extend the direction of the whole machine while producing LCD screens. Some companies even put on the case and screwed the screws to become the whole machine. This means that if color TV machine manufacturers are completely dependent on upstream manufacturers, they can only be passive. In the future, they may only be left with chassis and screws. The final controllable cost of complete machine companies may not even reach 10%. . Since 2004, Hisense has started to prepare for the TV LCD module project. In 2007, Hisense took the lead in developing China's color TV LCD modules, and built the first LCD module production line in China's color TV industry, breaking the current situation that my country's LCD modules are almost entirely dependent on foreign companies. At present, Hisense LCD modules have formed 5 production lines with an annual production capacity of 1.5 million pieces, and the products have reached the international leading level.

In the field of emerging industries, Hisense has created the world's third largest intelligent transportation standard system, becoming the world's first and only company that independently develops and successfully manufactures 10G PON photoelectric conversion devices. Hisense Intelligent Transportation System successfully served the intelligent transportation project of Beijing 2008 Digital Olympics through strict international bidding procedures. Hisense intelligent bus dispatching system is widely used in China's urban bus intelligent transformation, successfully blocking Siemens, which had a huge market in China, and ranked first.

"In the past, under the monopoly of foreign companies, the price of an intersection was 200,000 yuan. After the development of the Hisense intelligent transportation system, the price dropped to 50,000-70,000 yuan." Wang Zhihao said proudly. Hisense broke through the bottleneck and monopoly of the industry, assumed the responsibility of "big enterprise", and drove the development and growth of the entire national industry.

“Be kind” to competitors and suppliers

As industry leaders, large enterprises must not only lead in technology, but also actively build a good industry ecological environment, create a win-win situation with competitors and partners, and promote Healthy development of the industry.

Competition with industry competitors reflects a company's culture, style and attitude. "A large enterprise must have a mind for cooperation. Competition is market competition, and cooperation is strategic or tactical cooperation." Wang Zhihao said that Hisense has cooperated with competing companies in more and more fields. The "IGRS" standard mentioned earlier was created to overcome the difficulty of compatibility between devices of different brands due to inconsistent transmission protocols. The creation of this standard makes the interconnection of different products a reality.

On May 6, 2011, Hisense, TCL and Changhong jointly established the China Intelligent Multimedia Technology Terminal Alliance. After the competition, the rivals who fought in the past became "brothers".

Samsung and LGD have always been leaders in the color TV industry due to their leadership in related technologies in the panel and ancillary fields. At present, smart TV is still in its infancy, and companies such as Samsung and LGD have always been at the top of the pyramid in this field due to the priority of related technologies. This time, Hisense, together with TCL and Changhong, hope to take the lead in entering the field of intelligent terminal technology standards through the alliance and compete with international giants.

Wang Zhihao said that after the establishment of the alliance, it will carry out work from the technical standards of smart TV application stores, smart TV interconnection application specifications, and smart TV operating system technical specifications. and other intelligent multimedia terminal technical standards. In addition, the scope of cooperation may involve a common patent pool, the sharing of R&D results, the sharing of upstream and downstream partners, and the coordination of marketing. "The combination of the three companies has unified standards, which can achieve better economies of scale and save application development costs."

"In the manufacturing industry, supply chain management is very important. It is the global supply chain." Wang Zhihao pointed out that a good industry ecological environment also includes win-win cooperation with suppliers. Hisense regards good supply chain management as one of its core competitiveness. A clear point in Hisense's culture is that "being kind to your suppliers is being kind to yourself".

Wang Zhihao introduced that, in Hisense's view, to improve and ensure product quality, it is necessary to treat suppliers well, and to damage or deprive suppliers of their interests is to damage their own interests. From the timeliness of payment, to the fairness and reasonableness of bidding certification and price comparison, Hisense has established long-term strategic cooperative relations with suppliers based on the principle of good faith. Hisense has established a very complete information system in logistics and upstream and downstream supply chain management, which has greatly promoted the efficiency of suppliers, partners, and itself.

In overseas markets, Hisense is also expanding. In the Australian market, Hisense's brand awareness in Australia has been greatly enhanced by sponsoring one of the four major tennis championships - the Australian Open, and its market share has entered the top five. In addition, Hisense has manufacturing bases in South Africa, Algeria and Egypt, and R&D centers in the United States and Europe.

At the same time, Wang Zhihao also pointed out that Hisense still has a lot of room for overseas development. The current market share of less than 5% reminds Hisense people that there is still a long way to go to become an international brand. .

Interaction between editing and reading:

1. How does Hisense compete with multinational companies in overseas markets?

2. Under the background that the home appliance industry has laid out the information industry chain, how to solve the shortcomings of Hisense in the Internet?