Remember the efforts made in China

Although the Internet has swept the list of "China's Top Ten Management Practices" (referred to as "Top Ten") this year, there are still many things beyond the Internet that are worth discussing about Made in China.

There is no need to say much about the past glory. What people are concerned about now is: when the advantage of cheap labor becomes a thing of the past and cheap raw materials are no longer available everywhere, how does Made in China face the turning point of history? Looking at the "Top Ten" lists over the years, we found that the efforts made in China have never changed - they started from the simple manufacturing of "silly big and black" and faced innovation; they went from making wedding dresses for others to testing new products. Branded with their own LOGO; they have moved from a corner of the country to the world and participated in the global competition...

Interactive topic: If they don't transform, they will "wait to die". How should China's manufacturing industry go in the future?

These kinds of efforts are also washing away the bad reputation of Chinese manufacturing and striving for the recognition and acceptance of global consumers. At the much-anticipated 2014 World Cup, Chinese manufacturing made a high-profile advance and put related products on the field, including The mascot "Fu Lai Ge", the official game ball, the on-site electronic scoreboard, solar panels that provide green energy for the competition venues... Even the national flags of the participating countries waving by the fans are mostly provided by Yiwu International Trade City.

All efforts will be remembered!

Innovative self-salvation

Searching the "Top Ten" lists over the years with the keyword "innovation", we got 16 results, covering all aspects of enterprise management. Among them, as the most intuitive way of innovation, "product innovation" (2004) is particularly worthy of attention.

For many years, Made in China has been carrying the infamy of "copycat". Although some small enterprises can barely survive in the cracks of multinational companies through "copycats", through simple plagiarism and low-end imitation, "copycats" cannot bring Chinese manufacturing to the top, but innovation can.

Between independent innovation (2006) and imported innovation (2012), Made in China is obviously better at the latter. Imitation and innovation are often separated by a wall. In China, one of the most successful cases is WeChat. At the beginning of 2011, Tencent launched WeChat, a voice social application imitating the foreign application Kik. In just four years, its users have exceeded 800 million. At the time, media reports called it a "Kik-like free SMS app", but later, it had a group chat, a "shake", an open platform, and a public account platform. In mid-November this year, it launched It even launched a WeChat phone book to realize the function of free calls. To this day, it presents users with a very different face than Kik.

There are many benefits to this kind of "innovation by taking it". Some data show that the success rate of original technology research is only 5%, while the success rate of research and development based on original technology is 50%; more importantly, the average cost of imitation innovation is 65% of the cost of original research. , which takes 72% of original research.

At present, under the pressure of overcapacity and economic downturn, Chinese manufacturing is seeking breakthroughs in various aspects through innovation.

Whether it is channel innovation (2003, 2011) or cost innovation (2010), whether it is micro innovation (2011) or strategic innovation (2008), or business model innovation (2011) Year) and management model innovation (2013)... Through the "Top Ten" lists, we can see the efforts and hardships made in China on the road to innovation.

The infamy of "Copyright" made in China is still in my ears, and the embarrassment of foreign consumers burning Chinese products has not gone away. Innovation is more like a kind of self-salvation, illuminating the future road of Chinese enterprises.

Make a brand dream

Made in China, who has not heard of such data?

"Barbie dolls are OEM in Suzhou, China. The price of a doll in the US market is $10, but the FOB price in China is only $2. This $2 is not the final profit. The US dollar is the management fee and transportation fee. Of the remaining US$1, US$0.65 is used to pay for incoming materials, and the remaining US$0.35 is the gross profit of Chinese enterprises.”

As a global economy The product of the increasingly refined division of labor in the chemical industry, OEM once provided an important mode of operation and a source of profit for Chinese enterprises that were disadvantaged in terms of capital and technology. Through OEM, China began to go to the world. However, when almost every well-known brand in the world is marked as Made in China, we can only earn the remaining 35 cents. The famous smile curve shows this bitter taste made in China in a very ironic way.

Another predictable consequence is, "Because foreign parties control the most profitable aspects of design, R&D, branding, etc., and rely too much on foreign-funded enterprises for export and processing trade, not only will they not be able to bring corresponding benefits to the Chinese economy. On the contrary, it will lead to a hollowing trend of domestic industries.” Zhang Lei, deputy secretary-general of the Brand China Industry Alliance, believes that this economic growth model may make China’s economy trapped in the trap of low-end industries.

Since 2005, the word "brand" appeared on the "Top Ten" list for the first time, whether it was brand value management (2005), brand repositioning (2006), or brand remodeling (2010) 2012) and rebranding (2012), almost all of them are talking about the branding strategies of big companies and even foreign companies in China, and these are just icing on the cake.

But in 2007, we saw "own brand building". I believe that more Chinese manufacturers are concerned about how to build a brand from scratch and how can the hard-earned brand survive in the fierce market competition? This is a matter of life and death, and Made in China will take decades or more to find answers to these questions.

Integrating global resources

Since 2003, the first year of "Top Ten" selection, overseas mergers and acquisitions have jumped on the list. In the past 12 years, there have been 8 practices related to global resource integration and overseas investment. During this period, TCL's acquisition of Thomson in France, SAIC's acquisition of Ssangyong, Lenovo's acquisition of IBM, and Geely's acquisition of Volvo... Although each has its own success or failure, But this shows that Chinese companies are trying to transform from "workers in the world's factories" to "integrators of global resources".

Studying the roadmap of Chinese enterprises to go international, we found that this kind of effort can no longer be simply called "overseas mergers and acquisitions" or "overseas investment" - what Chinese enterprises are looking for is not resources. Simple superposition, but an increase in value.

Taking Geely as an example, the acquisition of DSI, an Australian transmission company, allowed Geely to quickly emerge in the field of 6-speed automatic transmission, and the acquisition of Volvo gave Geely a foreign brother with stronger technical strength. In addition, Geely is also trying its best to recruit talents around the world: in November 2011, Peter Horbury, the former design director of Volvo Cars, became the senior design vice president of Geely Group, leading the design of Geely Automobile's models; in July 2012, the famous car designer Ma Zhengkun joined Geely Group as the group's design director; at the same time, Geely set up a design center in Shanghai, and formed a team of more than 30 designers including designers from China, Sweden, Germany, South Korea and other countries. In 2013, Geely set up a European R&D center in Gothenburg, Sweden, in order to better integrate global advantageous resources and make every effort to create a new generation of mid-size vehicle modular architecture and related components.

Jiang Desong, deputy director of the Center for Globalization Studies of Cheung Kong Graduate School of Business, once pointed out: In the future, Chinese enterprises will participate in the integration of global resources, and any acquisitions should resolutely avoid the superposition of assets in the existing business model and profit model. It will make the burden even heavier and be more restrained by multinational corporations. Chinese enterprises should change their way of thinking and reconstruct the company's profit model from the perspective of the industrial value chain, so as to form an endogenous resource integration capability formed around the company's growth potential, rather than an extensional resource integration capability formed entirely by external means such as capital.