Successful enterprises: Qingdao Beer Group's successful expansion model
Only with low cost, high efficiency, scientific, objective and orderly healthy expansion can enterprises continue to grow and develop like snowballs.
To make the enterprise bigger and stronger, you must expand your enterprise in a healthy and orderly way. The expansion mode of Tsingtao Beer is "high starting point development and low cost expansion". Through low-cost expansion, Tsingtao Beer has acquired a large number of small beer enterprises with serious losses at a small cost in recent years. For this reason, many people worry that Tsingtao Beer has acquired a number of "garbage enterprises", which will bring down Tsingtao Beer, the world famous brand. However, in the first half of this year, the benefits of Qingdao Beer Group increased significantly, with the production and sales volume exceeding 1.2 million tons, an increase of 40% over the same period last year, and an increase of 82% in profits and taxes. 60% of the profits came from 38 enterprises acquired by Tsingtao Beer. Up to now, nearly 40 enterprises merged by Tsingtao Beer, except three or four which are in the necessary adjustment period, have all made profits, which shows that Tsingtao Beer's strategy of "developing from a high starting point and expanding at a low cost" has been successful, and has also proved the correctness of Tsingtao Beer's expansion path through practice. It is expected that the production and sales of Tsingtao Beer will exceed 2.6 million tons this year, ranking among the top ten beer producers in the world, and the total profit and tax will also rise to the top of the national industry, initially achieving the goal of "big" and "strong".
How can Tsingtao Beer succeed in its expansion? Looking at Tsingtao Beer's expansion experience from the perspective of enterprise specific operation may give more enlightenment to the business community.
The proposal of "low-cost expansion"
"Development is the absolute principle." In recent years, Tsingtao Beer Group has always followed this principle, focusing on how to make the enterprise bigger and stronger. The development and expansion of Tsingtao Beer Group is determined by many factors.
1. The need for self-development. Qingdao Beer has a history of nearly one hundred years and is a world-famous brand. However, compared with Budweiser of the United States, Asahi of Japan and other major beer groups in the world, its output and scale are "pocket", which is obviously not commensurate with the world-famous brand of Qingdao Beer. After entering the 1990s, Qingdao Beer still held the aristocratic mentality of "the emperor's daughter is not worried about marriage", and its output has been hovering between 20000 and 300000 tons. By 1996, the market share of Tsingtao Beer was only about 2%, which can be described as "with brands but without scale". In the face of the established market pattern, Qingdao Beer must accelerate its development to avoid being eliminated by the market.
2. Requirements of external environment. With the rapid development of the domestic beer industry and the transformation to the market economy system, the market competition is becoming increasingly fierce. Foreign foreign beer has taken a large part in the Chinese market, making the domestic beer competition gradually evolve into an international beer war; While many small and medium-sized beer enterprises have gone bankrupt and closed down, some large domestic beer groups have risen rapidly, and the trend of the national beer industry's big groups to cut the drama has taken shape. In this situation, if we do not develop, we will fall behind. If we develop slowly, we will fall behind. Only by accelerating development can we remain invincible in the fierce market competition.
3. Maturity of conditions and opportunities. George Stigler, a famous American economist, once said, "No big American company has grown up without a certain degree and way of merger." In 1997, the 15th National Congress of the Communist Party of China was successfully held, and governments at all levels formulated new policies to encourage mergers and promote alliances. At the same time, some small and medium-sized breweries on the verge of bankruptcy are eager to find partners, All these have brought historical opportunities to the reform and development of Tsingtao Beer Company.
In 1996, after the new leadership of Tsingtao Beer Company took office, it quickly emancipated its mind, changed its concept and adjusted its development thinking. In 1998, the "big brand" development strategy seminar of Tsingtao Beer was organized and held, and the "big brand" development strategy with the "brand driven" asset restructuring as the core was established. It took full advantage of Tsingtao Beer's brand, capital, technology, policy, talent and other advantages, and embarked on the path of low-cost expansion of economies of scale.
"Low-cost expansion" approach
In terms of development and expansion, Tsingtao Beer Company made an attempt as early as 1994 and 1995, and successively acquired Yangzhou Brewery and Xi'an Hans Brewery. However, due to the problems of experience, management, technology and external environment at that time, it did not achieve the expected results. Since 1997, Tsingtao Beer has accelerated the pace of low-cost expansion on the basis of absorbing the experience of the previous two mergers and acquisitions, and has successively acquired and merged nearly 40 beer production enterprises in Pingdu, Rizhao, Pingyuan, Heze, Xuecheng, Rongcheng, Maanshan, Huangshi, Yingcheng, Penglai, Wuhu, Shanghai and other places by means of bankruptcy acquisition, policy merger, and joint control, which has rapidly expanded the production scale of enterprises to more than 2.5 million tons, Leaps ahead of the same industry in China.
（1） Based on scientific and objective analysis and demonstration
Tsingtao Beer Co., Ltd. should conduct in-depth and detailed analysis and demonstration of the target enterprises both at the beginning and after the merger. The careful analysis and research on the internal and external environment of the enterprise, the feasibility of merger and acquisition, and the development potential of the enterprise have effectively guaranteed the quality of the merger and acquisition enterprise and the healthy operation of the whole group.
（2） Adhere to beer production as the main business
Although Tsingtao Beer entered the market economy relatively late, it did not "follow the trend", blindly entered the unfamiliar or unrelated fields, and has always adhered to the expansion of beer as the leading product. In recent years, the principle is not to enter other industries. Because Tsingtao Beer's own advantages lie in the beer industry, we should concentrate all financial, human, material and technological resources to create absolute advantages in the beer industry and strive to make the "cake" bigger.
（3） Fully follow the four principles of expansion
In the process of successfully acquiring more than 30 breweries, Tsingtao Beer has always followed the four principles of expansion, and the market layout is reasonable - each enterprise should have a "market circle" with a radius of more than 150 kilometers, without causing market overlap; Large market potential - the population density, consumption level, consumption habits, etc. of this region meet the market expansion requirements of beer enterprises; There are certain human resources - the merged enterprises have skilled operators and a certain management foundation; Both short-term and short-term benefits should be taken into account - not only to see benefits in the short term, but also to have huge space for long-term development. Only those who conform to these four principles will become the object of acquisition, otherwise, Tsingtao Beer will not hesitate to give up.
（4） Strengthen management after expansion
1. Residency working group. For the newly merged enterprises, Tsingtao Beer sent three working groups to promote and implement the corporate culture and management ideas of Tsingtao Beer: first, the propaganda and implementation group of Tsingtao Beer management mode, to promote the group company's "one center, six systems, two supports" Tsingtao Beer management mode in its subsidiaries, focusing on the promotion and application of cadres' competition for posts, workers' optimized combination, bidding and bid negotiation of bulk raw materials Advanced and effective management methods such as marketing mode and cost control system. The second is the process technology improvement group, which popularizes the operation method of Tsingtao Beer technology and guides the subsidiaries to produce beer according to Tsingtao Beer technology. The third is to implement the ISO9000 standard group, promote and apply the quality assurance system guided by the ISO9000 standard, and realize strict and standardized management. The three groups are led by the deputy general manager in charge and other leaders respectively. Through "management output", the management level of each subsidiary has been raised to a new level in a short time.
2. Establish a business unit. In order to prevent the risk of runaway caused by rapid expansion and shorten the management chain, Tsingtao Beer Company implemented the business division system management. According to regional division, business departments in South China, East China, Huaihai, Central Shandong and North China have been established successively, and several enterprises with relatively close proximity have been uniformly led by business departments. The Business Division is the management center of the Group in the region. It unifies the development planning, market planning, quality monitoring and management, major material procurement, capital scheduling, and personnel policies and management of its affiliated enterprises, forming a three-level management structure of the Group Company-Subordinate Business Division-Subsidiary Company, making the Group Company a decision-making center, investment center, and capital operation center, and the Business Division a profit center and regional management center, The subsidiary companies become the cost center and quality control center. This can not only shorten the company's management chain, enhance the ability to respond to emergencies, improve management efficiency, but also enable various decentralized enterprises to complement each other and coordinate the market, avoid market chaos, and also help to gather together to attack key markets.
（5） Protective measures
1. Registered independent legal person. After the merger and acquisition, the target enterprise must establish a level 1 independent legal person enterprise, registered as "Tsingtao Beer XX Co., Ltd.", and establish a subsidiary company with independent operation and self-responsibility for its own profits and losses, in order to prevent the burden on the parent enterprise. The group company only has limited liability, which not only avoids unnecessary risks, but also makes the production and operation of the merged enterprises full of vitality and vitality.
2. Dispatch the Chief Financial Officer. The chief financial officer is directly responsible to the head office. While assisting the general manager of the local enterprise to do a good job in enterprise management, he should give full play to the role of guidance, supervision and coordination, strengthen the financial management of the enterprise, and realize the two lines of income and expenditure with assets as the link and finance as the center.
3. Brand serialization. In terms of brand operation and protection, strictly control the use of the "Qingdao Beer" trademark. The merged enterprises still use the original brands that have influence in the local area. The Tsingtao Beer is injected with complete sets of models such as technology, technology and management to improve its product quality and management ability, and then the "Tsingtao Beer Series Products" and the logo of Tsingtao Beer are added. In this way, "brand grafting" has been changed into "brand driving", and the intangible assets of "Qingdao Beer" have been fully combined with local advantages, thus improving the market competitiveness of the original products. It not only does not damage the famous brand of "Qingdao Beer", but also makes full use of the "famous brand effect" to form a series of family products of "Qingdao Beer", so as to occupy the market in an all-round way and rapidly increase the market share. When the technology and management of the merged enterprises reach a sufficient level and the conditions are fully mature, the group company can consider transplanting the main brand - "Qingdao Beer" to other places under strict supervision.
（6） Market network construction
Constant principles and diversified ways are the guidelines for the construction of Tsingtao Beer marketing network.
The unchanging principle is that we must establish a direct supply mode and control the network in our own hands. The characteristics of the direct supply mode can be summarized as "door-to-door service" and "carpet bombing". "Door to door service" means delivering goods from the factory door to the store door, and "carpet bombing" means not letting go of any sales point that can sell beer. This direct supply model is needed by the merged enterprises to "clone". Because only in this way can we grasp the terminal market, the subtle market situation and stand firm in the turbulent market.
The mode remains unchanged, but the mode can be diversified. According to different situations in different regions, the marketing methods of various enterprises are rich and varied. Tsingtao Beer's East China Business Department has explored the model of "direct supply+deep distribution+joint development with distributors". Direct supply sales are carried out in areas suitable for direct supply, and are handed over to distributors for distribution in areas suitable for sales by sellers. In areas that sellers are unwilling to do, Tsingtao Beer is cooked first, and then handed over to distributors for distribution, which is called "I open up the land, you plant the land". However, no matter which mode, we should achieve: where wine goes, where people go, where management goes, and where corporate culture extends. To this end, Tsingtao Beer's East China Business Department has specially hired 100 salesmen to visit end-of-sell customers twice a week in different regions, to manage customers for the factory and manage customers for customers.? Jianfeng "points directly at the" nerve end "of the market, and the network is firmly controlled in its own hands. This model can be said to be very sharp. In Shanghai Beach, which is dominated by many powerful players, it has increased the market share of Tsingtao Beer from less than 5% to 25% in a year.
The network construction of Tsingtao Beer is also different in density. They generally divide the market into three parts: base market, peripheral market and special market. The base market mainly refers to the city where the enterprise is located. The network nerves of this market are the most dense and effective. In small and medium-sized cities, after several months of operation of this network, the market share can reach more than 80%, such as Sanshui and Doumen in South China, Yangzhou and Wuhu in East China and more than 20 enterprises, The market share of the base market has reached more than 90%. In big cities, the market competition is relatively fierce. Shenzhen's market competition has entered the "street war". A small restaurant will become the object of repeated competition by several enterprises; The waitress dressed in different beer brands will compete in the same hotel. Even so, the sales volume of Tsingtao Beer has risen sharply, and its market share in Shenzhen has risen from less than 10% a year ago to nearly 40%.
Results of low-cost expansion
By implementing "low-cost expansion", Tsingtao Beer Group not only expanded its scale, but also saved a large number of state-owned enterprises. At the beginning of the merger, most of these enterprises were state-owned enterprises with losses and close to bankruptcy. After the merger, the group company strengthened its management by injecting the enterprise culture of Tsingtao Beer and the management mode of Tsingtao Beer. After a period of adjustment, most of these M&A enterprises have been on the right track to turn around losses and embark on the path of healthy development. For example, Xi'an Hans Brewery, which was controlled by 82.5 million yuan in 1995, produced 60000 tons of beer in 1998 and achieved a profit of more than 5 million yuan. In 1999, the output reached 120000 tons and achieved a profit of 50 million yuan. In 2000, the output will reach 180000 tons and the profit will exceed 80 million yuan. At present, Xi'an Company has achieved the "three firsts" of profit and tax, beer production and sales, and per capita income of employees in Xi'an, becoming a model of state-owned enterprise reform; Pingdu Brewery, which was merged by debt in 1997, achieved a profit of more than 20 million yuan within two years after joining Tsingtao Beer, and became the largest profit and tax company in Pingdu; Rizhao Brewery, which was purchased with 10 million yuan in 1997, has become a major local profit and tax earner from a bankrupt enterprise. In 1998, it achieved a profit of 2 million yuan, and in 1999, it achieved a profit of more than 4 million yuan. In 2000, it recovered all its investment; In addition, the merged breweries such as Xuecheng, Heze, Xuzhou, Wuhu, Huangshi, Sanshui and Zhuhai also showed a good momentum of both production and sales, becoming the company's new economic growth point.
During the merger and acquisition, Tsingtao Beer Group not only brought these state-owned enterprises back to life, but also received more than 10000 employees and recruited more than 3000 new employees, which solved the employment problem of a large number of people for the local government, increased tax revenue for the local government, and led to the development of carton, printing, glass bottles, cans, transportation and other related industries, and promoted the prosperity of the regional economy.
The fierce competition in the market has changed the concept and way of Tsingtao Beer people for many years, and a large number of market-oriented talents have emerged. Whether in South China, East China, Huaihai and Xi'an, whether recruited by the group or locally, the sales team of Tsingtao Beer is a vigorous young group around 30 years old. In the market development and competition, their potential has been brought into play, making a number of talents who are not "outstanding" in ordinary times stand out and become the new force in the Tsingtao Beer market.
Like the formation of sales talent group, there are also many talents in management. A general manager of Tsingtao Brewery East China in his early 40s was the head of a production enterprise of Tsingtao Brewery Group in Qingdao before Tsingtao Brewery expanded. It is also the expansion of the market, pushing him to Shanghai, a metropolis where Chinese and foreign beer brands are in dispute. He said that with his qualifications and talents, he felt great pressure. However, he is taking the competition of Tsingtao Beer in East China into consideration. The director has made great achievements and the market share has risen rapidly. A manager dispatched from the group of a merger enterprise in the South China market, who has worked for less than one year, has "cloned" the "Tsingtao Beer Model" very well, and has made innovations, which not only opened the local market, but also expanded the image of Tsingtao Beer and the influence of Tsingtao Beer culture.
A group of management personnel exported by Tsingtao Beer Group, who are out alone, in a new environment, selfless and entrepreneurial, have spared no effort to export Tsingtao Beer management mode and achieve the expansion intention of the Group, and have made extraordinary efforts. It is these emerging talents and the dedication of every employee of Tsingtao Beer that constitute the driving force of Tsingtao Beer's expansion.
The rapid expansion of Tsingtao Beer Group Company has made the enterprise achieve unconventional development. At present, the total assets of the group company have increased from 3.2 billion yuan in 1996 to 7.5 billion yuan, and the production scale has increased from 300000 tons in 1996 to nearly 4 million tons. The brand value of "Qingdao Beer" has increased from 3.342 billion yuan in 1996 to 5.945 billion yuan in 2000, and the output has soared from 300000 tons in 1996 to 2.6 million tons this year. The enterprise has initially realized economies of scale, and has completely changed the original situation of "with brands and without scale". In the future, Tsingtao Beer will continue to improve its core competitiveness and comprehensive competitiveness and promote its sustainable, rapid and healthy development based on the working principle of "consolidating and improving, promoting healthy development; innovating and fission, and implementing the cross-century strategy".
Experts summarized the expansion of Tsingtao Beer
Five experiences and enlightenment of strategy
Many experts from the economic circle highly commented on the expansion model of Qingdao Beer. Experts summarized the five major experiences of Qingdao Beer's expansion strategy:
（1） Seized the golden opportunity of merger and acquisition.
Internationally, the world's major beer enterprises have begun to see several cases of strong and strong alliance. The world's beer industry is developing in the direction of strong, strong and weak elimination. The world's top ten beer enterprises have also increased from the lowest production and sales volume of 2 million tons in the past to nearly 3 million tons. This reflects a worldwide trend. At home, China's beer industry is moving from "Spring and Autumn" to "Warring States"; Small beer enterprises have lost money. In the past, almost every city or even county has breweries. Now 90% of these breweries are in a loss situation; At the same time, more than 60 foreign beers, which had occupied most of China's hotels and stores overnight, suffered from "acclimatization" due to the four major problems of high factory construction costs, high management costs, high market investment and high capital consumption. More than 90% of them suffered huge losses and began to withdraw, and most foreign beers are seeking cooperation with major domestic beer enterprises, including the top ten beer companies in the world beer industry. This is a good time for powerful enterprises to implement low-cost expansion and strengthen their own strength. It should be said that this opportunity does not wait for me. If it does not appear several years ago, it will be lost a few years later. It is required that Tsingtao Beer must seize the opportunity to complete the strategic layout of the domestic market in a short time. At the same time, this layout is also an opportunity for Tsingtao Beer to break through the regional "siege". As a mass consumer product that pays attention to freshness, long-distance transportation of beer is not economical and affects freshness. Therefore, beer has always taken the radius of 150 kilometers as the optimal economic benefit circle. This layout of Tsingtao Beer is precisely the establishment of "optimal benefit circle". Only with more "circles" can Tsingtao Beer truly become a strong brand covering the whole country, and achieve the goal of becoming one of the top ten beer companies in the world by 2003 and the second largest beer company in the world within ten years.
（2） A relatively complete set of expansion risk prevention mechanism has been formed.
Market layout risk prevention: it must comply with the four principles of reasonable market layout, large market potential, certain talent resources, and long-term and short-term interests; Brand risk prevention: use local brands and add the words "Tsingtao Beer Series", which can not only exert the brand influence of Tsingtao Beer, but also not affect the main brand and other brands in case of a brand problem; Financial risk prevention: select the CFO from the Group to implement the two lines of revenue and expenditure. At the same time, an independent legal person, registered as "Tsingtao Beer XX Co., Ltd.", is established to establish a subsidiary company with independent operation, self-financing, self-development and self-restraint. The group is only responsible for it, which can avoid risks and stimulate the vitality and vitality of the subsidiary company; Market risk prevention: set up a business unit to uniformly lead several enterprises close to each other by the business unit, which can not only shorten the company's management chain, enhance the ability to cope with emergencies, improve management efficiency, but also enable various decentralized enterprises to complement each other and coordinate the market, avoid market chaos, and also help to gather together to attack key markets.
（3） A set of mature M&A models has been created:
Ways of merger and acquisition: -- According to the specific situation of the merged enterprise, adhere to the three ways of bankruptcy acquisition, policy merger and holding combination. This can maximize the low cost of mergers and acquisitions. At present, the investment in acquisition and technological transformation of more than 30 enterprises that Tsingtao Beer has acquired has decreased by 2/3 compared with the investment in normal plant construction; Management mode -- The main structure of Tsingtao Beer management mode consists of nine parts: one core, six systems and two supports. One core is the combination of scientific and strict management and harmonious interpersonal relationship; Six systems, namely, quality assurance system, production and operation system, human resources management system, marketing system, financial management system, and development and innovation system; The two supports are corporate culture and technology. Tsingtao Beer has specially formed three groups, namely, mold penetration, standard implementation and process technology, to go deep into the enterprise and quickly and effectively implement the management mode, process technology and ISO9000 quality standard into the merged enterprise. Marketing network - The unchanging principle is to establish a direct supply model and control the network in your own hands.
（4） The combination of Tsingtao Beer's characteristic culture and local culture has formed an extraordinary affinity in the local area.
Tsingtao Beer emphasizes inclusiveness in corporate culture, and strives to combine Tsingtao Beer's corporate culture with local people-oriented culture. The goal is to create a cultural core that combines scientific and strict management with harmonious interpersonal relationships. The direct effect of this combination is that the local people have created extraordinary affinity. Most of the Tsingtao Beer series brands have been in short supply since they were put into production for a few months, which has a lot to do with it.
（5） It provides practical experience for solving this worldwide problem.
In the development of the world beer industry, although the "pyramid" products are high, it is difficult to expand the output. Although the "tower base" products are middle and low, they can have a huge output. Therefore, the coexistence of "tower top" products and "tower base" products has always been a worldwide problem. For example, Germany, the world's recognized hometown of beer, has maintained a very small scale in order to maintain the flavor of high-quality "craft wine". Although Budweiser Beer is the largest beer enterprise in the world, it has always been difficult to reach the top of the "pyramid" and has always been regarded as a medium and low grade beer brand. Heineken is a high-end liquor brand, but it is difficult to get off the "top", so it can only be produced in the Netherlands and sold globally, and its scale is also difficult to further expand. Moreover, this mode of local production and global wine sales is increasingly not suitable for the freshness requirements of beer. This multi-brand strategy of Tsingtao Beer not only maintains the "spring and snow" style of Tsingtao Beer, but also can apply the strong influence of Tsingtao Beer brand to the series of brands, thus solving the problem of coexistence of "tower top" and "tower top". Broadly speaking, this model can work in many industries.
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