The Development Process of Haier Group

Looking at the development course of Haier Group, Understand the road of enterprise capital operation

--------------------. The development process of Haier Group

Qingdao Refrigerator Factory, the predecessor of Haier Group, was established in 1984 on the basis of introducing the production technology of Liebherr refrigerators in Germany.

before that, the refrigerator factory was a small collective factory with a loss of 1.47 million yuan, and people's quality awareness was still quite indifferent at that time.

in April 1985, the refrigerator factory smashed 76 refrigerators with serious quality problems in public, which greatly improved the quality awareness of workers. As a result, it won the national quality award in 1988 and the only national quality management award in the refrigerator industry in 199.

by 1991, it had been rated as the "most popular light industrial product refrigerator" by the national consumers for five consecutive years. At this time, the refrigerator factory reached an unprecedented height in terms of brand awareness, product quality and service quality.

in December, 1991, Haier group company was established with Qingdao refrigerator factory as the core enterprise and air conditioner factory and freezer factory as the close-knit enterprises.

through technology development, refined management, capital operation, merger and holding, and internationalization, Haier Group has rapidly grown into a large enterprise group that ranked 3th among the top 5 in China in 1996. During the five years from 1992 to 1996, Haier Group's sales revenue soared from 8 million yuan to 6.16 billion yuan, and it reached 6.6 billion yuan from January to August in 1997.

At present, Haier Group's products include refrigerators, freezers, air conditioners and more than 5, varieties in 13 categories, and are exported to Europe, America, Japan and other developed countries and regions in batches.

in 1996, the intangible assets value of Haier trademark reached 7.7 billion, making it the first famous brand of household appliances in China.

II. Two Ways of Capital Operation

Tigler, a Nobel laureate in economics and an American economist, once said: Throughout the world, none of the famous large enterprises and companies developed through capital transportation in a certain way at a certain time, and none of them developed solely by the accumulation of their own profits.

Haier Group has developed so rapidly, thanks to the effective capital operation mode, and seized the favorable opportunity to achieve low-cost capital expansion. Among them, there are two most obvious ways: one is to issue Haier refrigerator shares through equity financing and raise social funds; The second is to merge tangible assets with intangible assets and carry out mergers and acquisitions to achieve efficient scale expansion.

In 1993, when the country developed the capital market, Haier Group seized this opportunity and actively prepared for the listing of refrigerator companies. In November 1993, Haier's refrigerator stock went public, raising 369 million yuan, and in 1996, it raised another 143 million yuan through rights issue. These funds were used to expand refrigerator production and related projects, and they were used most effectively.

The listing of stocks also puts enterprises under new pressure, from facing users and employees in the past to facing shareholders, employees and users.

Shareholders require the enterprise to give him a higher profit return every year, and employees require the continuous improvement of working environment and wages. As a result, the pressure faced by enterprises after listing is much greater than that before listing. In order to turn the pressure into motivation, it is necessary to form an interactive value chain among shareholders, employees and users, so as to ensure the continuous improvement of asset quality.

more than three years after listing, Haier has undergone great changes through restructuring. The output of refrigerators has soared from more than 3, units in 1993 to 1.51 million units in 1996, a five-fold increase. The total profit of enterprises has also increased from 81.87 million yuan in 1993 to 2.65 million yuan in 1996, an increase of 2. 5 times, and the working environment and wage income of employees have also been improved. The company's share capital expanded from 17 million yuan listed in 1993 to 326 million yuan at the end of 1996, while the company's earnings per share increased from .41 yuan at the time of listing to .55 yuan in 1996. In three years, the company's share capital doubled, and the earnings per share not only did not dilute, but improved, which means that the company's capital profit rate has not decreased, but has improved, which fundamentally guaranteed the rights and interests of shareholders.

It is an important reason for our success in the capital market to change the mechanism of enterprises and form an interactive value chain among shareholders, employees and users through stock listing.

in addition to successfully using the capital market to promote the rapid development of enterprises, the company has also achieved great success in enterprise merger.

In this regard, Haier put forward the idea of "eating huckfish".

the so-called "huckfish" refers to enterprises with good hardware conditions but lagging management. Due to poor management, they have fallen behind the market. Once they have an effective management system, they can stand up again by grasping the market.

under the current domestic system, live fish are not allowed to be eaten, and eating dead fish will upset the stomach. Therefore, we have to eat Huck fish, and Haier is good at management, and there is Haier brand with a trump card worth 7.736 billion yuan, thus finding the combination point between Haier and "Huck fish".

In the practice of capital operation, Haier Group has adhered to the strategy of "eating Huck fish". In the past thirteen years, * * * has merged 14 enterprises with a total loss of 55 million yuan, and has revitalized assets of 1.42 billion yuan.

From the development of Qingdao Refrigerator General Factory to the present, with the improvement of enterprise system and the deepening of management, Haier Group has experienced three stages of development in enterprise merger and asset revitalization:

The first stage (1988-199) was mainly to invest funds and completely transform.

Qingdao Refrigerator General Factory has introduced advanced technology through joint venture with Liebherr, Germany, and its production level has been greatly improved. At the same time, it has paid close attention to product quality and vigorously explored the domestic market.

by June 1985, the first four-star refrigerator in China was produced, and in 1988, it won the first gold medal in the history of refrigerators in China.

after several years of hard work, the management level and economic benefits of refrigerator general factory have been improved.

in this context, we began to consider the transformation from the original single product management to multi-product management.

In 1988, the General Refrigerator Factory merged the then Qingdao Electroplating Factory and transformed it into a microwave electric appliance factory. By injecting capital into the microwave electric appliance factory, the production equipment was introduced, and the management and enterprise benefits were greatly improved.

the second stage (1991-1994) is mainly to invest funds and input management, expand the scale and improve the level.

During this period, Qingdao Refrigerator General Factory has reached a new level in brand awareness, product quality and service quality. After years of exploration, the pioneering OEC management was affirmed by three vice premiers, and was promoted to the whole country by the State Economic and Trade Commission. Enterprises from all over the country competed to learn from it, and it became a much-told story.

but nationwide, its scale is still quite small, with an annual output of 3, refrigerators. In order to develop in China household appliances market and step onto the international market, it is necessary to improve the comprehensive competitiveness of enterprises.

In order to strengthen its strength and achieve a strong alliance, the Refrigerator General Factory merged the former Qingdao Air Conditioner Factory and Qingdao Refrigerator Factory in 1991. By investing funds, paying close attention to enterprise management and Haier culture, and relying on Haier's brand and service network, the economic benefits were gratifying. From 1992 to 1996, the output of refrigerators and air conditioners increased by 4 times and 14 times respectively.

compared with the first stage, the second stage of merger mode is characterized by transplanting Haier's corporate culture and OEC management system to the merged enterprise, creating a dynamic new mechanism, which enables the enterprise to quickly enter a benign development stage.

in the third stage (1995-present), the merger mode in this stage is mainly to revitalize tangible assets with intangible assets, transfer the value to the merged enterprises with Haier famous brand and OEC management system, change the mechanism, and realize the transformation from spiritual to material.

The typical case at this stage is the merger of Haier Group and the former Qingdao Hongxing Electric Appliance Company.

The company was a famous enterprise in Qingdao as Qingdao Refrigerator Factory, and its Qindao Sharp washing machine was one of the three famous brands in China. However, due to poor management and lack of cohesion, the company's benefits declined year after year. By 1995, the company's situation was quite bad: the total assets were 4 million yuan, while the total liabilities reached more than 5 million yuan, the debts were 133 million yuan, and the debt ratio was as high as 14%.

When the news that Qingdao * * * decided to turn Red Star Electric Appliance Company into Haier Group was announced, many people were skeptical. "Can such a big burden be carried?" After taking over Red Star Electric Appliance Company, Haier Group reorganized it into Haier Washing Machine Corporation. On the basis of inputting a complete set of management mode, Haier's "famous brand strategy", "users are always right", "sincerity is always", "market for service", "selling reputation is not selling products", "high standard, performance-oriented, zero defect" and "creating market" From this, we can unify the enterprise's thoughts, forge the staff's will, and recast the enterprise's soul. These ideas unite the original almost annihilated staff like an invisible hand, and promote them to an orderly, self-disciplined and swift working state, which makes them exert a strong life tension and enables the enterprise to achieve extraordinary development: turning losses in three months, making a profit of 1.5 million yuan in the fifth month, and passing the ISO91 international quality system certification for the first time in the second year, and winning. By the end of 1996, the market share had risen to 22% in the top 1 shopping malls in China, and rose to 28. 31% in the first half of 1997, 5 percentage points higher than the second place.

The international market share is far ahead of other famous brands in China. The number of fully automatic washing machines exported to Japan has accounted for 95% of the total national exports and 61% of the total Japanese imports ... On this basis, the washing machine company merged Guangdong Shunde Washing Machine Factory with the brand as its investment holding in May 1997, and established Shunde Haier Electric Appliance Company, and resumed production within two months, creating a "terrible" Haier speed for Shunde people. In September, 1997, we cooperated with Hangzhou West Lake Company, used the value of Haier's intangible assets, and set up Hangzhou Haier Electric Appliance Co., Ltd. to develop Haier brand color TV sets.

It can be seen that in modern production and operation, intangible assets management and enterprise cultivation have achieved great success. Through enterprise merger and reorganization, Haier's product categories have been rapidly improved and its overall competitiveness has been greatly enhanced.

Haier Group's capital operation mode is "eating the fish". When merging an enterprise, the main consideration is whether it can bring benefits after the merger, and it is not based on the financial statements of the enterprise. In order to recover the fish, sometimes it needs to pay money, but if it can quickly occupy a larger market share in a field, it is worth doing.

When it merged with Hongxing Electric Appliance Company, it lost nearly 2 million yuan, but it was still very cost-effective compared with rebuilding the factory. Moreover, Hongxing's equipment and sales network were relatively perfect, so as long as the management was well done, the whole enterprise could go up soon.

At that time, the first department sent by Haier was not finance or scientific research, but Haier Corporate Culture Center.

They went deep into Red Star employees and patiently talked about Haier's spirit of "dedication to serving the country and pursuing Excellence" and the profound connotation of OEC management. This is Haier's corporate culture, and its essence is "creating talents first, recreating famous brands" and "making things create people first". It is this unique intangible asset of corporate culture that revitalizes tangible assets, and Haier has thus created new ideas and new models for the capital operation mileage of large enterprise groups in China.

III. Success of Haier

Haier Group has made remarkable achievements in more than ten years, especially in capital market and enterprise merger and reorganization. To sum up, there are two points:

1. The purpose of entering the capital market.

Haier entered the capital market in 1993 through the listing of refrigerator stocks. After entering the capital market, we deeply felt that the purpose of entering this field should not be simply to raise funds, but to continuously improve the capital profit rate of enterprises through restructuring, so as to ensure the preservation and appreciation of the company's entire assets and fundamentally guarantee the interests of shareholders.

2. In terms of enterprise merger and reorganization, our success lies in our successful corporate culture and mature Haier management model that can be expanded and popularized.

by injecting Haier's corporate culture and management mode into the merged enterprise, Haier fundamentally changed employees' thinking, instilled the work style of Haier's entrepreneurial spirit of "dedication to serving the country and pursuing Excellence" and "quick response and immediate action" into each employee's heart, which made the spirit of the whole enterprise have a qualitative leap and made the enterprise form a cohesive force.

in other words, Haier's merger and reorganization of enterprises is not simply adding up several enterprises, but by importing Haier culture to the merged party, changing concepts and mechanisms, realizing the transformation from spirit to matter, thus improving the overall combat effectiveness of the "joint fleet".

In recent years, some state-owned enterprises are not prosperous, which can't be said to be related to the lack of good management mode and corporate culture, which makes enterprises have no cohesion. From the perspective of operating mechanism, the operating mechanism of state-owned enterprises has not really been transformed. Some companies are listed only for the purpose of raising funds, rather than ensuring the gradual improvement of corporate capital profit rate.

we believe that the way out for the reform of state-owned enterprises is to gradually straighten out the property rights relationship and gradually change the operating mechanism so as to continuously increase the value of enterprise assets.