With the deepening of reform and opening up, in the mid-80s, China's civil household appliance manufacturing industry ushered in a boom period. Large goods such as color TVs, washing machines, and air conditioners have quickly entered thousands of households and become necessities to improve the quality of life. In this booming industry, Sichuan Changhong Electric Company was once the undisputed leader.
It was created in the 50s of the 20th century as a state-owned enterprise specializing in the production of radar and other equipment for the military industry. After the reform and opening up,Changhong seized the opportunity of the outbreak of civil household appliances,Successful transformation,Through technology introduction and market development,Its color TV products have become a national consumer hot product in the 90s。
However, the good times did not last long, by the beginning of the 21st century, Changhong's halo has faded, reduced to a third-rate brand in today's home appliance industry, the speed of decline is so fast, it is embarrassing.
Changhong's brilliance depends on an outstanding leader - Ni Runfeng. In 1985, this old industrial amateur with a technical background took over Changhong and opened a new development process of the enterprise. Ni Runfeng keenly found that with the improvement of residents' income level, the TV market has broad prospects, and color TV may become an emerging pillar industry in Changhong.
So he decisively led the transformation of Changhong, from the military industry to the production of color TVs, and introduced the most advanced Japanese Panasonic color tube ray tube display technology at that time. In the market, Changhong emphasizes the localization and high cost performance of products, and has won the favor of consumers.
In the mid-90s, the annual output and sales volume of Changhong color TV ranked first in the world, accounting for almost half of the domestic market, known as the "king of color TV".
Any success is not accidental, and there are commendable development strategies behind it. In the heyday of Changhong, Ni Runfeng adopted the business policy of "technology introduction + market exclusivity". On the one hand, he spared no effort to introduce foreign advanced technology, so that the quality of Changhong's products reached the international level.
On the other hand, it also takes advantage of Changhong's scale to suppress its peers by hoarding key raw materials to achieve the purpose of monopolizing the market. This strategy of "two-wheel drive" directly led to Changhong's overwhelming market position in the mid-90s.
However, Changhong's success also buried the hidden danger of future failure. Ni Runfeng is overconfident, believing that Changhong has become the "terminator" of the industry and can gain a permanent lead through industry monopoly. This delusion made him ignore the changes in the external environment, and missed the technological innovation from picture tubes to LCD screens, so that he hoarded a large number of old-fashioned picture tubes that no one cared about.
What's more fatal is that he was also deceived into dumping these backlogged goods at ultra-low prices to an unscrupulous American company APEX, resulting in Changhong losing a huge amount of 4 billion yuan. This painful meat cutting transaction directly broke through Changhong's business bottom line and accelerated the pace of its decline.
The sinking of Changhong is not only the company's own strategic mistakes, but also the helplessness of the development of the times. In today's rapid update of information technology, it is difficult for any enterprise to maintain a monopoly position for a long time. At its peak, Changhong did not regard innovation as the lifeline of enterprise development, but fell into complacency and conservatism.
Emerging electronic products such as LCD TVs and smartphones have broken the technical barriers of the past and brought consumers more choices. Changhong failed to keep up with the trend of consumption upgrading and lost the favor of the market.
Changhong's lesson warns us that under the conditions of market economy, if enterprises want to continue to be invincible, they must keep up with technological innovation, gain insight into changes in consumer demand, and adjust their own development strategies. No enterprise can compete with the times, and only innovation is the eternal theme of the business.