The origin of business theory
After entering a stable period, many enterprises have both a stable industrial base and idle funds. In order to make the enterprise develop rapidly, the decision-makers of the enterprise are often at a loss, and even easily enter unfamiliar industries. This is often risky and slow to develop.
If an enterprise wants to develop rapidly, it must be good at capital operation and proliferation. Only with good capital operation can the assets of an enterprise grow exponentially.
Core content
First, do multiplication to expand the advantages of the original industry and allocate the best enterprise resources for capital operation;
2. Snowball capital operation activates Huck Fish, and it is fundamental to re-plan strategy and reorganize talents;
3. Corporate structure creates opportunities for capital operation, and property rights reorganization lays the foundation for market acquisition.
From a small construction team 20 years ago, Dongfang Group has developed into a large multinational enterprise group with 35 subordinate enterprises, covering financial, economic and trade, port transportation and other industries. One of the most important points is the successful combination of industrial capital and financial capital for capital operation. After more than four years of capital operation, the scale of Dongfang Group has expanded rapidly, which is 20 times of the original accumulation before 15.
Huali Group, which started from chopping bamboo, was able to take off rapidly after 1998, also because of the success of capital operation. 1999 10, Huali successfully acquired ST Chongqing Chuanyi, completed the shell listing, and expanded the market share of core industries. In September 2000, Huali entered ST Hengtai, and obtained low-cost financing channels, which set the carrier for the new industrial system. The third time is the acquisition of artemisinin industrial system to realize the strategic adjustment of the company to the biopharmaceutical field. 200 1 On the basis of the acquisition of two NASDAQ listed companies in the United States, the company quickly acquired the CDMA global R&D center of Philips Group, acquired the core technology, and completed the industrial restructuring. Since 1998, Huali has implemented mergers and acquisitions and alliances around its main business, achieving low-cost and high-speed expansion, occupying 40% of the domestic watt-hour meter market and becoming a veritable leader in the same industry in China.
At the beginning of the establishment of Sanjiu Group, capital operation began. 1992 and 1994, southern pharmaceutical factory, the core enterprise of Sanjiu group, implemented equity financing and introduced more than 80 million US dollars of foreign capital successively. 1994 group changed the creditor's rights of several pharmaceutical companies into equity, and established its own sales network all over the country. After 1993, the group began a more difficult capital operation-enterprise merger, and successively merged Ningbo Medicinal Materials Company and other enterprises. By the end of 1997, Sanjiu Group had merged pharmaceutical production enterprises and commercial enterprises *** 16 in various ways, with more than 40 wholly-owned, holding and shareholding enterprises16. In just a few years, Sanjiu Group has successfully embarked on a road of capital management and low-cost expansion through mergers and acquisitions in the pharmaceutical industry, and has developed into a giant enterprise group spanning eight major industries in one fell swoop.
In the late 1990s, the market has got rid of the shortage economy and turned to the buyer's market. The reason why these three enterprise groups can still stand firm in the market and develop rapidly is that they have successfully implemented capital operation, that is, they have followed the multiplication law of enterprise development.
Simply relying on production and operation, no matter how high the scientific and technological content of products is, the development speed is still quite slow, and if enterprises learn to do multiplication and use the power of capital market to promote industrial operation, the development of enterprises will be faster and better. It should be said that capital operation is a necessary means for enterprises to become bigger and stronger and expand their scale. Enterprises must be good at capital operation if they want to develop rapidly. Only with good capital operation can its assets multiply.
Content parsing
First, do multiplication to expand the advantages of the original industry and allocate the best enterprise resources for capital operation.
What is multiplication consciousness? First of all, multiplication is different from addition, such as 6+6= 12, and 6×6=36. Taking the enterprise is the saying "snowballing". The bigger the snowball, the more new snow will stick when it rolls, because it grows exponentially according to the sphere area. But if the snowball does not roll forward in the same place, it will melt and will not increase rapidly. Multiplication consciousness is the consciousness of capital operation, and its main feature is that the expansion of the original industry is the purpose of capital operation, and capital operation is only a means of industrial expansion, or low-cost industrial expansion. Capital operation serves the expansion of the original industry, which is essentially the advantage expansion of the original industry, and the process of capital operation is the process of advantage expansion.
Zhang Hongwei, Chairman of the Board of Directors of Dongfang Group, which owns three listed companies, was praised by the front page of The Wall Street Journal as the representative of China's private economy in the past 20 years and the leader of China's private investment industry. Zhang Hongwei has a famous saying: "Capital operation is addition and capital operation is multiplication." In other words, multiplication is a capital operation centered on mergers and acquisitions.
1in March, 1996, Bank of Tokyo and Bank of Mitsubishi merged to become the largest bank in the world at that time. On April 6th, 1998, Traveler Group, the second largest financial enterprise in the United States, and Citibank, the second largest bank, announced the merger. The merger case involved more than $80 billion, and its combined total assets reached $698 billion, making it the largest enterprise merger case in history. The newly established Citibank surpassed Mitsubishi Bank in Tokyo to become the largest financial enterprise in the world.
Wang Licheng said: "At the beginning of its establishment, Huali Holdings Co., Ltd. had a clear functional orientation: according to the overall strategy of Huali's industrial development, we used the means of capital management to acquire high-tech enterprises in North America at low cost, and quickly integrated technical resources to form the best resource allocation of R&D bases in North America and industrialization bases in China, which provided a good platform and an effective interface for Huali to quickly enter the high-tech field. Huali's strategic thinking is to integrate the industry by means of capital operation, introduce new technologies and products to the industry, and enhance core competitiveness. "
Looking at the large-scale group enterprises that are developing rapidly in China at present, most of them are developed through multiplication. However, many decision makers in developing enterprises can't open their own thinking space because they have seen too many cases of diversification failure. In order to develop steadily, they cling to the original industry and struggle to expand, and cling to idle funds without knowing how to use them, thus losing development opportunities. Facts have proved that enterprises without awareness of capital operation cannot develop rapidly.
Second, snowballing capital operation activates Huck Fish, re-planning strategy and reorganizing talents are fundamental.
1. Talent problem
Many enterprises have accumulated assets, but there is no reasonable talent structure, and the limitation of talents has become the bottleneck of enterprise development. In view of this situation, the most effective method is not to cultivate talents step by step and seek development later, but to focus on managing talents in planning and capital operation. Because the opportunity for development is fleeting, and the cultivation of talents is long-term.
Ninety-nine points of capital plus one point of wisdom (knowledge) can be successful! Through the input of capital, culture and business philosophy, the "Huck Fish" can be revived, and the enterprise can be managed by using its own management ability and professional ability without personally participating in the management.
In the 1990s, Haier set up a "Joint Fleet" by activating "Huck Fish", which is a successful example. 1995, Haier "activated Huck Fish" with its own corporate culture-Qingdao Hongxing Electric Appliance Factory. By the end of 12, the factory had exported 82,000 washing machines in195, earning $0.2 million from export, ranking first in the washing machine industry in China. Similarly, Haier has also activated a number of "Huck Fish" such as Huangshan TV Factory and Aide Washing Machine Factory. Zhang Ruimin, president of Haier, said: "The model of Haier Group should not be a train. The more carriages are added, the heavier the burden on the front; It should be a joint fleet, each fleet has a certain combat effectiveness, and the whole is greater than the sum of its parts. "
2. "Seeking Son" and "Seeking Potential"
Combining capital operation with the overall development strategy of "selling real estate" is the most successful and shining move of Huali. The capital operation of an enterprise should not be listed simply for listing, but for backdoor, and should be combined with the overall strategy and development direction of its own company as a means. This is what Weiqi often says: "Those who are good at playing seek potential; If you are not good at playing games, ask for children. " Many enterprises with successful capital operation have handled "seeking the son" and "seeking the potential" well, and achieved the perfect unity of specific operations and strategic layout.
The merger of Sichuan Yaan Pharmaceutical Factory by Sanjiu Group is an example. Ya 'an Pharmaceutical Factory, founded in 1958, is one of the earliest manufacturers of traditional Chinese medicine injections in China. They have technical advantages and product advantages in the production of traditional Chinese medicine injections, and Ya 'an area also has advantages in medicinal resources. However, due to the reasons of enterprise mechanism and management, the efficiency of enterprises has been poor. Sanjiu Group has always been very interested in the business of traditional Chinese medicine injections and is optimistic about the future prospects of such products. It has always wanted to invest in such products strategically, but it has suffered from its own investment in building factories, and it has invested heavily in all aspects. Moreover, Sanjiu Group is located in Shenzhen and does not have the advantage of medicinal resources. From 65438 to 0995, Sanjiu acquired Ya 'an Pharmaceutical Factory by capital operation. 1999, the profit and tax of Ya 'an Pharmaceutical Factory jumped from the shortage before the merger to 90 million yuan.
Although the specific situations of Sanjiu and Huali are different, the similarity of their success lies in bringing capital operation into their own strategic development, expanding the original advantageous industries by means of capital operation, and closely combining capital operation with the expansion of advantageous industries in the specific operation process, which is their value.
Third, the company structure creates opportunities for capital operation, and the reorganization of property rights lays the foundation for market acquisition.
The success of capital management depends not only on the individual efforts of entrepreneurs and the strength of enterprises, but also on the grasp of opportunities. Wang Licheng of Huali Group said with deep feeling that opportunities are often fleeting and cannot be copied. Throughout Huali's 30-year growth history, it has experienced many difficulties and twists, but every progress and leap at the historical juncture is based on accurate foresight and grasp of opportunities.
In the history of the development of Dongfang Group, there are also many first-time and first-time listed private enterprises. The first country controls the port; The first to win a huge US dollar loan from the World Bank and so on. All these are because Dongfang Group is good at seizing the opportunity of international capital flow to developing countries and domestic property rights restructuring and transformation, and relying on the integration of financial capital and industrial capital, it has realized the rapid expansion and take-off of the group scale. During the period of 1997, when Dongfang Group decided to acquire a listed company in China and Hong Kong, the Asian financial crisis hit Hong Kong, China. At this critical juncture, senior decision makers have made a judgment that the crisis is also an opportunity and can boldly enter. Therefore, due to the sharp decline in market value, the acquisition cost of Dongfang Group is far lower than expected.
Everything is established in advance, and it is abolished if it is not foreseen. Opportunity only loves those who are prepared. Dongfang Group dared to take the lead in the world and completed the shareholding system reform ahead of schedule, and the internal mechanism reform of enterprises reached the highest expectation, which laid the institutional foundation for the rapid growth of the East. When acquiring listed companies in China and Hongkong, Dongfang Group made careful preparations and raised 2.5 billion yuan, ready to enter the market at any time. From 65438 to 0994, Huali Group reorganized the production of electric energy meters into Hangzhou Huali Co., Ltd., and on this basis, it carried out two property rights reforms with employee stock ownership as the content, which made the corporate governance structure of Huali Group increasingly perfect. From 1995 to 1998, the group adjusted its capital structure, revitalized its existing assets and optimized its capital structure through various forms. These measures have achieved good results and made Huali Group deeply realize the importance of capital. These practices have made internal preparations for Huali's future shell listing. Huali Group has done a lot of preparatory work before acquiring listed companies.
The key to the successful acquisition of a company lies in whether the company has standardized modern enterprise management system and capital operation experience, and secondly, whether the company has the economic strength to consolidate and start the target company. It should be said that Huali's acquisition of Chuanyi is inevitable by accident. Chongqing Chuanyi Company has been losing money for two consecutive years because it has followed the system of the former state-owned enterprises, the mechanism is not active and the profitability of its main business is low. Its stock has undergone special treatment, referred to as ST heavy instrument. Huali seized the opportunity of western development and rural power grid transformation, entered Sichuan Instrument, and invested heavily in technical transformation of Chongqing electric energy meter market base, greatly expanding the production scale. The company turned losses in that year, and its net profit rose from -468.7 1 10,000 yuan to 1.0557 million yuan within one year. Accordingly, earnings per share rose from -0.03 yuan to 0.20 yuan.
Capital operation is a necessary means for enterprises to become bigger and stronger and expand their scale. Enterprises must grasp the above three principles when doing multiplication.
Application of business theory
By adopting the law of multiplication development, enterprises can enter the "expressway" as soon as possible and cross the conventional "snowball" development model, which is helpful for enterprises to expand their scale and become bigger and stronger.
This article is selected from Shang Yang's latest book "Business Theory —— Competition Mode of Contemporary Enterprises in China", which was published by Machinery Industry Press. The book adopts the thinking mode of western business theory, uses concise and simple predictions and standardized and meticulous writing, stands at the historical height of China's market economy, and summarizes the successful experiences and failure lessons of dozens of famous enterprises in China from a unique perspective, scientifically expounds the power contained therein, and sorts out and refines the most core, accessible, reproducible and universally instructive business ideas and business rules. It profoundly reveals the entrepreneurial life of China's contemporary enterprise elites, emotionally reproduces the entrepreneurial process of contemporary successful people, and rationally summarizes 55 business principles for the success of contemporary enterprises. This book is of great value to middle and senior managers, business management learners or business planners.