Wang Donglei: focus, focus is the only rule of transition

As we all know, Chinese companies are good at price war, in the market competition, often use price to establish market position. However, with the cost advantage of manufacturing gradually disappear, the price war is more and more difficult.

Just like what kind of politician, what kind of voters. By the same token, what kind of consumer will create what kind of business. In the past China enterprise price war tested, because consumers are generally low income, price sensitive. Enterprise transformation to do high-end products? Market demand is bound to fall sharply, as China's high-end consumers and the middle class are still growing.

NVC chairman Wang Donglei believes that this is the biggest problem facing China industrial transformation.

So, will we turn to global competition? Similarly, not optimistic.

Wang Donglei to the United States Mall for example. Five years ago, in the U.S. market, striking and basic, is Chinese manufacturing. At present, the United States shopping malls, clothing goods, at least half have been replaced by Bangladesh, Turkey, Vietnam, Kampuchea and other countries, because of their lower manufacturing costs. As the developed countries began to re industrialization, the original factory in China, in addition to moving to lower cost countries, but also part of the move back to their own country.

From this point of view, China's manufacturing industry, after the rapid loss of cost advantage, but did not establish a "innovation, technology, brand," the new competitive power.

An enterprise to be successful, Wang Donglei believes that the total cost or lead, or the one and only, this is caught in the middle of the situation of enterprises suspended in midair, very painful.

Subtraction strategy

The situation is so, how to deal with?

Wang Donglei believes that the focus, the focus is the only rule, because only focus can do.

Wang Donglei's business in another enterprise Elec-Tech history, have had a similar experience. The small household electrical appliances has more than and 100 product lines, more than 30 thousand employees. Wang Donglei chose to shrink the business, leaving five of the world's top three product lines, and all the rest to give up, and staff also reduced to 5000 people. Corporate profits, but thus achieve growth.

"You only have to be more focused on what others can't do, and make the product more precise. To focus, we must learn to do subtraction. Wang Donglei said.

Do subtraction, sometimes need to exit. When a wide range of business, too much involved in the field, and can not gain a competitive advantage in the world, Wang Donglei think it is time to quit, and forward-looking exit is also a great decision. That year, IBM have to withdraw from desktops, notebooks, server business, so that it was successful transformation. Today, another international giant PHILPS in order to transition, the same re implementation of exit strategy.

Business is a single point, a little more focused, more likely to succeed. Wang Donglei further elaborated his subtraction strategy.

After focusing, how to do?

First, innovation driven. Innovation driven, technology leadership, which requires energy and investment. A chip Elec-Tech, spends 200 million yuan of funds, do one of the best in the world. Today, companies are faced with the global market, especially the high-end market, and therefore, only in the global scope of technology leadership, it is possible to win customers, to win the market.

Secondly, the quality of the process to achieve the ultimate. Wang Donglei had to Germany, Japan's best brands of small appliances and light bulbs. This experience, so that he realized that the Germans, the Japanese have a high quality of the pursuit and requirements. However, China's manufacturing industry in the loss of cost advantage, not every enterprise has the ability to develop sophisticated technology, for the majority of small and medium enterprises, we must adhere to the quality of the work under the foot.

Again, adhere to the brand line. This is very important for Chinese enterprises, especially medium-sized enterprises. NVC, in the UK market, starting from zero, do one of the ten major lighting companies in britain. Along the way, suffered numerous difficulties, the first few years there is no profit until 2015 was a turning point, and good prospects. The secret lies in persistence and devotion.

Lei Jun has a famous saying: as long as the air, pigs can fly. However, Wang Donglei believes that today, in addition to the Internet in addition to the mobile Internet, there is no other. But with the air, one of the 10 thousand, can become a flying pig may have only one, the rest will be killed. For manufacturing enterprises, do their own thing to do, adhere to, stick to, focus on doing more important in a field.

Transition to O2O

NVC also faces the transformation.

One is the technical transformation of traditional lighting to LED lighting, LED is a new technology, and also the cost of general lighting, it can reach 50%-90% energy, extend from 5 to 10 times longer, it will subvert the entire industry.

Two is to O2O transformation. In 2014, NVC launched O2O transformation strategy, from the beginning of the first two provinces, the dealers in the internal and external linkage, Tmall and other electronic business platform and offline store activities combined, O2O pilot. Today, from two provinces and cities have been extended to the 8 provinces and cities, the flagship store, the 3600 stores in the city, the 8 stores. In 2015, the only online sales, NVC is from zero to 600 million yuan.