Wen/En-Ze Cai
Haier, which has grown up in a competitive marketplace, doesn't know what's left of it once it gives up its manufacturing strengths
Not long ago, the Haier Group made an announcement about participating in an equity financing program for Fisher & Paykel (Fisher & Paykel), New Zealand's largest home appliance maker. Paykel (Fisher & Paykel), New Zealand's largest home appliance maker, in an equity financing program. Haier paid 28.5 million U.S. dollars for the deal, acquiring a 20 percent stake in the company and becoming Fisher & Paykel's largest shareholder, while gaining two board seats.
In recent years, Haier has made frequent moves in the overseas market, first bidding for Maytag, and then acquiring GE White Goods, but both ended in failure. Haier in the domestic white goods industry has been sitting in the position of the boss for many years, but in the overseas market, the sales of its own brand has not seen much improvement. Now, "captured" Fisher & Paykel, there will be a piece of territory to show their feet?
Acquisition of Fisher & Paykel, who borrowed the power of who
Haier this time, some people have commented that it is a "false way to destroy Guo". Haier's own statement is: the use of Fisher & Paykel's market channels, to Europe and the United States high-end white goods market penetration. But optimistic about the future and sales benefits are two different things. Haier is optimistic about Fisher & Paykel's sales channels, Fisher & Paykel is also optimistic about Haier's sales channels in China, from the surface, such an exchange of channel resources, it seems that the two sides do not lose.
A little analysis reveals that such a deal is clearly more favorable to Fisher & Paykel. At present, the product can cover the global high-end market white goods manufacturers, Europe has Siemens, Philips, the United States has York, are strong brands across the market for many years, foreign brands difficult to shake its dominant position. Haier wants to Fisher & Paykel tiger's mouth, never easy.
Then from the point of view of "mutual utilization", the two sides **** enjoy market resources, Haier will be the exclusive marketing and distribution of Fisher & Paykel brand home appliances in the Chinese market, Fisher & Paykel exclusive marketing and distribution of Haier brand home appliances in Australia and New Zealand market. But because of the extreme asymmetry of the two market resources, Haier obviously suffered a big loss.
While Fisher & Paykel's products cover the high-end market for refrigerators, washing machines, dishwashers, dryers and stoves, the company only produces about 1.2 million units annually, and after selling its products to more than 80 countries and regions around the globe, its market share is negligible. Currently, Fisher & Paykel has a 55% market share in New Zealand, ranking first in the market, and 18% market share in Australia, ranking second. From the above, Fisher & Paykel is at best a strong regional brand.
Compared with the 2008 global sales of 122 billion yuan, accounting for more than 20% of China's home appliance market share, high-end market share of more than 30% of the Haier Group, even if the Fisher & Paykel in the Chinese market, but also a volume is not large "small sparrow", not to mention in the global market. Fisher & Paykel's limited energy, limited channels, limited market, Haier "borrow" such resources, in the end, how much light?
The U.S. financial crisis has had a huge impact on Fisher & Paykel's performance. By March 31 this year, the year, Fisher & Paykel losses amounted to 95.3 million New Zealand dollars. In February, the company reported a 13.1 percent drop in sales in New Zealand, an 8.5 percent drop in Australia, a 12.9 percent drop in the U.S. and a 19 percent drop in Europe in the past nine months.
Fisher & Paykel won't pretend to understand the consumer potential of the Chinese market. Borrowing Haier channel into China, the high cost of pre-investment costs, Fisher & Paykel can be eliminated, really a good move.
Fisher & Paykel said in its announcement that its partnership with Haier opens the door to the Chinese market and allows it to push sales into the Middle East and Africa. The company's chief executive John (John Bongard) also admitted that just on their own this would be extremely difficult task. At present, the United States of America's high-end white goods market is occupied by several German manufacturers, Fisher & Paykel with them to compete with the pressure. After cooperating with Haier, the company is confident that it will be able to compete with its German rivals in the Chinese market.
Haier weakness: lack of competitiveness of the main industry
Strength of multinational corporations, the enterprise's industrial structure is very clear, several major industries are strong. Look at Haier's industrial structure, almost diversified "soup", the main industry is not big enough, not strong enough, the vice industry is small and scattered. This is Haier's weakness, but also Haier's fatal wound.
Haier Group, founded in 1984, has become a large international enterprise group with high reputation at home and abroad. The products have grown from a single refrigerator in 1984 to a product group of more than 15,100 specifications in 96 categories, including white home appliances, black home appliances and beige home appliances, and are exported to more than 160 countries and regions in the world.
Haier's current industrial cluster includes 12 categories, including home appliances, communications, IT, household, biological, software, logistics, finance, real estate, electrical parts, digital home, and biomedical equipment. The only strong industry is white goods, but in recent years has shown a steady decline, the market position has been reduced from the first for many years, now the third (the first is Gree, the second is the United States), the competitive advantage is no longer, the future is worrying.
Haier's annual report data show that in the fourth quarter of 2008 operating income of only 4.443 billion yuan, down 23% year-on-year, operating profit of -81.71 million yuan, the first time in nearly five years, a single-quarter operating loss. As a result of the decline in operating income in the fourth quarter of 2008, as well as a sharp rise in selling expenses and management costs, single-quarter net profit fell 87% year-on-year, which in turn affected Haier's 2008 results.
If the financial data of major domestic home appliance companies in recent years for a comparison, it will be found in Gree, Midea, Kolon and Haier four major home appliance giants, Haier's net profit margin on sales and return on net assets lagged significantly behind the other three. All signs indicate that has been white goods as the only center of gravity of the corporate industrial structure of the Haier Group, seems to be driving on the road away from the industrial axis - Haier's air-conditioning, refrigerator production capacity growth is slow, the market share has been declining, the industry's position has been seriously threatened.
Then look at those multinational home appliance giants, GE, Siemens, Samsung's industrial structure and market control is exemplary.
GE that is, General Electric, is the United States, but also the world's largest manufacturer of electrical and electronic equipment, its output value accounted for the U.S. electrical industry, the entire output value of about 1/4. GE is the originator of corporate diversification investment, is a set of services, technology and manufacturing as one of the diversified company, is committed to every business area to achieve global leadership, and to help customers achieve success. From aircraft engines and power generation equipment to financial services, from medical imaging and television programs to plastics, GE is committed to creating better lives through its many technologies and services.
If GE were just a home appliance, or power equipment, or equipment rental company, there might be some years of low profitability because these businesses are inherently not immune to cyclical fluctuations. with GE's diversified portfolio of leading industrial divisions and the industrial architecture of its financial business units, the company will always be able to find an engine for growth, regardless of the fluctuations of the economic cycle.
In GE's industrial architecture. The main business has always been the king of strength. This company's electrical products are technologically mature and diverse, with more than 250,000 product varieties and specifications. In addition to the production of consumer appliances, industrial electrical equipment, it is also a huge arms supplier, from the cosmic aviation instrumentation, aircraft engines, pilot navigation systems, to multi-ballistic warhead ballistic missile systems, radar and spaceflight systems, etc., are encompassed in its huge industrial structure. In recent years, GE had divested and ceded 71 non-core businesses to focus its energy and resources on cultivating and developing its core businesses.
In contrast, Haier, despite years of persistent diversification, has the industry's broadest product group in the field of home appliances, but Haier's industrial group behind the mask, is not ideal business conditions. In Haier's main business, in addition to the year smashed out of the refrigerator business can still come up with, air conditioning and Gree, the United States, the gap between the gap between has become bigger and bigger, has been the second line of camp to catch up quickly; washing machine, whether it is the wave or drum, in the Chinese and foreign brands clamped down on the heart of the power; Haier color TV has never ranked among the top five mainstream brands in China, Haier cell phone is now difficult to see in the market; barely profitable may be a laptop computer, but caught up with the global financial crisis caused by the market weakness.
Contrasting GE's industrial structure with Haier's, it's easy to see that an enterprise's industrial structure is the necessary soil for profit and growth: a clear and strong main business wins, and the one who wins the industry wins the world.
How far can a company go if it loses its production capacity
In 1998, Haier put forward a "three-step" internationalization strategy of "go out, go in, go up". Among them, "going out" refers to the bulk sale of products to the world's major markets, "going in" refers to the mainstream marketing channels into the foreign mainstream market, "going up" is to make the Haier brand has become a mainstream brand in foreign mainstream markets.
In the past ten years, Haier has basically realized "going out", but "going in" and "going up" is difficult.
Compared with most domestic enterprises, Haier is a more innovative enterprise. But compared with international enterprises, Haier's ability to innovate is seriously inadequate, as evidenced by the lack of original products, major improvements in Haier products. Although Haier's refrigerators have been among the top three in the world, there is not a single refrigerator technology that is strong enough to influence the industry to fight and sit in the world. The situation is similar for other products, which is the core of Haier's 10-year strategy is missing.
In fact, Haier's real industrial advantage is in the domestic. 2004, Haier became "China's first brand of home appliances", refrigerators, washing machines, air conditioners, water heaters are the industry's top three. Because there is a group of products rather than a category of excellent performance, so Haier's total revenue is much higher than other companies.
However, problems have arisen from this. It's easy to go from 50 to 85 points, and hard to go from 85 to 95 points. At present, Haier in its own dominant industry in the domestic market growth space is not big, and even has touched the ceiling of the situation, did not choose to domestic production capacity to carry out large-scale effective integration, to further strengthen the existing industrial strength, but chose to adjust the market from the main body of the domestic for foreign countries. Such a choice may be the crux of Haier's sales scale in recent years can not be sustained enlargement, market control continues to weaken.
Haier in the global marketing volume exceeded 100 billion mark, the main business income continued low growth has become a major bottleneck in the development of enterprises. According to Zhang Ruimin's plan, Haier Group's future strategy is to move more and more manufacturing operations out of the country to free up more energy for product development and marketing.
Capacity transfer is a risky move, Japanese home appliance companies in the capacity to move out of all the "hollowing out of enterprises" phenomenon, should cause Chinese enterprises to wake up. Japan's home appliance industry through three production capacity to move out, "cage for birds" into "dragon for birds", ultimately leading to their own R & D technology and products can not achieve large-scale commercialization. In recent years, Japanese home appliance companies have begun to reflect on, and began to rebuild home appliance production lines in the country.
Giving up enterprise production capacity is tantamount to giving up the right to market guidance. In the modernized global production and global sales model, the production capacity advantage, in a sense, is the enterprise's competitive advantage. Haier, which grew up in a competitive market, doesn't know what's left once it gives up its manufacturing advantage.
In the evening of May 31, strategic performance expert Lin Yougang chatted with home appliance industry veterans in Guangzhou, talked about the competition in the home appliance industry, talked about Haier, Midea, Gree, TCL, Changhong and other industry several well-known enterprises in the storm clouds. We finally formed a unanimous view: Haier is a very respectable enterprise, Zhang Ruimin is very worthy of people's admiration of entrepreneurs, but the prospects for Haier is not optimistic.