We not only stand on the shoulders of giants, but also stand on the tombstones of giants
China 25 years ago was in dire straits. The feasibility of the market economy has just been recognized, and some people who have just got rid of the shackles of the old system have become the trendsetters of the times, using their courage and passion to write entrepreneurial legends of that era. However, as time goes by, the consequences of blind enthusiasm and self-confidence slowly emerge. Entrepreneurs themselves disdain rules and imitate Western technologies. Eventually, many once-powerful entrepreneurial empires fall apart and collapse. While it is regrettable, it also makes people think about what exactly led to the collapse of these commercial giants?
Here is a book recommended, "The Great Defeat" by Wu Xiaobo, which talks about a number of Chinese companies that were once brilliant but eventually declined. The book says that failure is nourishment for latecomers. By studying the "failure genes" of those once great companies that have now disappeared, we may be able to give some warnings to those companies that are currently tinkering with dazzling network concepts. At the same time, we should face and remember every Chinese entrepreneur who has moved forward or fallen in the wind and rain with respect and piety.
On November 8, 1994, at the Media Center, CCTV’s first advertising time bidding meeting broke the news. I originally thought that the competition would be between the two companies with the highest advertising exposure - Shandong Kongfujiajiu and Guangdong's Sun God. However, I didn't expect that the competition would be fought by a little-known Shandong Kongfu Banquet who had been involved in legal disputes due to brand issues. Liquor won for 30.79 million yuan. At that time, almost all domestic media reported on it with great enthusiasm, and the news effect was beyond everyone's expectation. At the same time, it also allows everyone to see the potential fame-making value behind "Biao Wang".
The person in charge of CCTV at that time was a strong woman named Tan Xisong. During his tenure, CCTV’s advertising revenue jumped from less than 1 billion to over 4 billion. Her trick is to use CCTV's prime time slots for national bidding, and she prepares an empty but golden laurel for the company with the highest bid amount: Bid King. All ambitious entrepreneurs are willing to give it a try. After the previous Confucius Banquet Wine won the title of King of Standards, its popularity increased greatly, its sales volume soared, and its profits and taxes increased by as much as five times.
One year later, on November 8, 1995, the "two-hole" enterprises, Kongfu Family Wine and Kongfu Banquet Wine, which were highly anticipated by the public, both fell into decline. The protagonist of the story, Linqu County, Weifang City, Shandong Province The Qinchi Winery won the title of the second bidding king with a price of 66.66 million yuan. For a time, there were only two questions in people's minds: Who is Qin Chi? Where is Linqu?
Speaking of Qin Chi, we have to mention Ji Changkong. When he first came to Qinchi, Qinchi was just a small factory in Weifang City, Shandong Province that was suffering from serious losses and dying. With no way out in Weifang, Ji Changkong set his sights on Shenyang: Northeastern people have a large population, upright personalities, relatively immature consumption mentality, and are willing to pay for daily necessities with lower prices and high demand. With the advantage of low prices, Ji Changkong, who is good at building momentum by frequently making strange moves, turned the winery from losses to profits in just one year, and established a firm foothold in Shenyang and even the "Three North" (Northeast, North China, and Northwest) markets. . The dazzling crown of laurels naturally became his target.
66.66 million yuan, equivalent to more than 30,000 tons of liquor, is enough to flood the luxurious Media Center up to half its waist. But it turns out that the investment is worth it. In 1996, according to data reported by Qin Chi, the company achieved sales revenue of 950 million yuan and profits and taxes of 220 million yuan that year, which were 5 times and 6 times those of the previous year respectively.
A year later, Ji Changkong, who was famous all over the world, came to the Media Center again to participate in the bidding. This time he once again won the title of Bid King with an astronomical figure of 321.2118 billion yuan. Note that this was in 1996, and there were three "small goals" that we are now talking about. This is undoubtedly a crazy move. Qin Chi’s bidding price was as much as 100 million higher than the second place. Compared with the previous year, Qin Chi was only 1 million higher than the second place. Ji Changkong even revealed later that the price was determined based on his mobile phone number.
However, behind the billions of dollars spent, there are unspeakable difficulties for this shrewd businessman. If Qin Chi does not win the bid for the second time, its sales performance will plummet.
The first Biao Wang Kong Mansion Banquet, with Qin Chi's performance in winning the bid, dropped dramatically and gradually disappeared from the public's eyes, which can be said to be a lesson from the past. At the same time, when he confidently expressed to the public how Qinchi's sales performance would hit new highs in the next year, Ji Changkong knew very well what changes the market would have in the coming years. With the success of Yanjiu and Qinchi, domestic liquor manufacturers of all sizes have sprung up like mushrooms after a rain. Qin Chi’s second place bid of 300 million was actually a never-known company that tried to become famous at 200 million. Some experts pointed out that excessive production of liquor may threaten the food supply. The country is already preparing to restrict the production of liquor and the advertising of liquor.
Just two months later, a sudden disaster occurred. A reporter conducted an investigation into the famous Qinchi Winery and found that its production capacity has not reached the level of annual sales of 900 million. The rest of the liquor is purchased from liquor produced in Sichuan, plus the factory's original liquor and alcohol, and blended into low-alcohol liquor, which is sold to the national market. A series of reports spread like a prairie fire across the country. Qin Chi, who had just won the title of Biao King for two consecutive terms, encountered the most dangerous and unexpected blow.
Faced with such a huge crisis, the immature Qin Chi showed his confusion and powerlessness in public relations. Apart from rumors that someone had been sent to say they were willing to spend millions to acquire this set of reports, there was no other move. As a result, Qin Chi's sales dropped sharply amid rounds of news bombardment. From the sales of 650 million yuan in 1997, which was far lower than the expected 1.5 billion yuan, the sales of 1998 were only 300 million yuan. Since then, it has slumped and faded out of the public eye. In 2000, a metal wine bottle cap supplier accused Qin Chi of defaulting on payment of more than 3 million yuan. The court ruled that Qin Chi lost the case and ruled that the "Qin Chi" registered trademark should be auctioned publicly.
Throughout Qinchi’s past few years, its management has worked hard. Ji Changkong has been working in various places for a long time. He lives in a basement that costs 10 yuan or even a few yuan. His monthly income is 800 yuan and his bonus is 80% of that of front-line employees. Its investment in technology is huge. Of the 320 million yuan bidding fee, only 48 million yuan was actually paid. By the end of 1996, Qinchi's canning production lines had increased from 5 two years ago to 47, and it also won the only "green food certification" in China's liquor industry at that time. Even the media's criticism of Qin Chi seems unfair. "Sichuan wine entering Shandong" has long been an open secret in the liquor industry. Qinchi is not the first one, and it is definitely not the largest. "Liquor blending" is actually a change in the industry, which is exactly the opposite of what consumers understand. Alcohol-based "blending" of liquor is more advanced than the traditional solid-state fermentation process.
Qin Chi’s failure lies in not using a mature way to deal with media public opinion. “Chinese media has always had a tradition of sympathizing with the weak and admiring thinkers, but generally shows fear but no respect for the strong.” Qin Chi, who has won the championship twice, has long been in the center of the news as a strong player. Once there is any disturbance, reports and gossip, large and small, will be hotly pursued to catch people's attention. Public opinion is a double-edged sword. Water can carry a boat or capsize it. In addition, Qin Chi, who was at the peak of his career, did not realize his shortcomings in public relations. Before even having time to explain the purpose of "blending" to consumers, everyone was talking about the gold, and died in the spit and accusations flying in the market.
There is a saying in the "Tao Te Ching" that if you want to abolish something, you must strengthen it. What this means is that what appears to be thriving may actually be on the verge of a very dangerous situation. Ji Changkong was so prosperous when he won the title of "King Biao". Who would have thought that Qinchi would plummet in just a few months? In "Game of Thrones", the Lannister family is famous for its wealth, and "Lannister debts must be repaid". But in fact, the Lannister gold mines have long been exhausted, and they have many political enemies, such as Dorne and Stannis. Many internal unstable factors, such as Margaery Tyrell and the High Sparrow Bishop, have not Get well controlled. In real life, we can often see or hear about some "rich people" who spend a lot of money. Various rumors describe them as the God of Wealth or worse; or they have various auras and honors, publishing numerous papers and patents. The academic "great god" is like a god who does not eat the fireworks of the world. However, if you observe and think carefully, you will easily find that they also have shortcomings and things to worry about. There may also be various crises and hidden dangers in their lives, finances, and careers.
What we worship all day long may just be the primitive fear of the unknown in our hearts and our unwillingness to explore the unknown. Although this unknown is around us, we only want to see the good side of this unknown.
Whether we are at the top or at the bottom, we are all mortals, and we will all have troubles that we cannot get rid of and hidden dangers that are difficult to realize. Opening up territory and growing wildly is one stage, but after a blockbuster success, discovering hidden dangers in time, quickly reborn and becoming a part of the new ecosystem, and returning to peace is another state.
I hope that this brave and great Chinese entrepreneur’s experience of exploring the unknown and moving forward in the wind and rain can bring us precious enlightenment.
After all, living fish are in trouble, while dead fish are in peace.