When it comes to companies that sell air conditioners, the first thing that comes to mind is companies such as Midea. However, as early as the rise of these companies, there was a domestic veteran air conditioning company, which ranked first in this field for 8 consecutive years. Today, the company sells only 60,000 air conditioners a year. So, what is the reason for the decline of the enterprise?
In the field of air conditioning, the domestic Midea and Gree can be described as leading enterprises, and in 2020, Midea will catch up with Gree with a revenue of 121.2 billion. Although today's Midea occupies a large share in the field of air conditioning, as early as before, there was an old air conditioning company in China, which ranked first in sales for 8 consecutive years. Do you know which company this is?
The company mentioned above is Chunlan. It is worth noting that at the beginning, the company was not called Chunlan, and its development was also on the verge of bankruptcy. The reason why the company can go to glory is mainly due to the drive of Tao Jianxing, the manager of the enterprise.
At that time, when the leader sent Tao Jianxing to this factory, almost everyone thought that this decision was made to send him, but this transfer, in Tao Jianxing's view, was not the meaning at all.
So, after he took over the company, he began to make massive changes to it, not only to adjust the factory employees, but also to reform its products. Tao Jianxing's first decision was to stop production of the factory's products. Although the variety of products in the factory is relatively rich, each of its products has not achieved an irreplaceable point.
It is for this reason that Tao Jianxing stopped production of previous products and began to develop representative products. With the efforts of the owners of the enterprise, we have finally developed an air conditioner of 7,000 kcal and a household air conditioner of 3,000 kcal. It is also relying on these two major products that the company has achieved good results in this field.
Specifically, in 1989, the company's air conditioning sales reached 100,000 units, which not only successfully made the company profitable, but also made this field the first position in China. By 1994, the company's output value in this field had reached 5.2 billion, and the annual sales volume alone was as high as 1.5 million units.
In just a few years, the company's sales have soared 15 times, which is why the company's market share in the country is as high as 40%. It is worth noting that after Chunlan's sales in the field of air conditioning topped the first place in 1989, this title followed it for 8 years. That is to say, the company has ranked first in air conditioning sales for 8 consecutive years.
However, Chunlan's title did not last long, and the company gradually declined. Today, the company can only sell 60,000 units a year in the field of air conditioning. So what made the company fall to this point?
Mainly because of the diversified development of the enterprise. After Chunlan achieved good results, Tao Jianxing wanted to expand the company's development scale, so he began to take a diversified development path. It is understood that the company has entered a number of areas that are not related to electrical appliances such as motorcycles, trucks, and real estate.
If you want to develop in an unfamiliar field, you must be prepared for risks and losses. It is worth noting that among the many fields that Tao Jianxing has entered, he has indeed achieved good results in the field of motorcycles. After the creation of the company's motorcycles, in just half a year, its sales reached 60,000 units.
You know, in 1994, motorcycles were still relatively luxurious means of transportation, and the unit price of the company's motorcycles was as high as 5,000 yuan. In half a year, Chunlan's achievements in this field have allowed it to earn nearly 1 billion yuan in revenue.
It is precisely because of this that Tao Jianxing has spent more and more thought on other businesses, and slowly his main business air conditioning investment is less and less. According to the data, in 2005, the company's air conditioners not only lost the first position in sales, but also fell out of the list of the top 10 in China, and its sales volume in that year was only 750,000 units.
Since then, the company's air conditioning sales have fallen, and by 2008, its sales volume was only 320,000 units. Even in 2019, the company sold only 60,000 air conditioners in a year. It can be said that the decline of the enterprise is mainly due to its blind development. Now that the company is transforming into real estate, do you think it can make a comeback?