Recently, there have been many articles on the collapse of the richest man, although their failures are different, but without exception, at the juncture of the company's prosperity, they are a bit not wrong, and they are strategically biased to play with capital and finally bring the company to death! Speaking of strategic mistakes, the defeat of Prince Milk seems to be more representative.
Today's "prince milk" has become our "most familiar and unfamiliar drink". I think that prince milk won 80% of the market that year, and there were more than 7,000 dealers in the country, and the revenue in 5 years also exceeded 3 billion. Founder Li Tuchun was determined to build Prince Milk into a "millennium enterprise", but such a dream came to an abrupt end at the age of 23.
Li Tuchun was born in 1960 to an ordinary farming family in Linxiang, Hunan. He often referred to himself as "the 46th generation descendant of Emperor Taizong of Tang and Li Shimin". When he was young, Li Tuchun also "suffered a lot" in the years of working in the south. Later, he earned his first pot of gold by selling wall calendars through loans, but because of his investment in bookstores, video halls, etc., he immediately got into debt.
In 1996, he drank a bottle of lactic acid bacteria called "Vitality Treasure" in the south again, originally wanted to be an agent, but in the end because he could not come up with a high agency fee, he had to give up! But he is still not dead hearted, he has identified the dairy industry, must find a breakthrough in this sunrise industry. He directly dug the formula technology director of "Vitality Treasure", and soon established Zhuzhou Sunrise Jiangnan Industrial Group (later renamed Hunan Taizi Milk Biotechnology Co., Ltd., referred to as Taizi Milk) in his hometown, and began to produce lactic acid bacteria drinks, named "Sunrise Brand" Taizi Milk.
Prince Milk quickly became popular in the Zhuzhou market, and soon Prince Milk entered the Changsha market, and as a result, it achieved sales of 30 million yuan a year. Li Tuchun wanted to let the prince's milk enter the national market, so he was ready to win the CCTV "Biao Wang", imagining that the palace banquet wine was as well-known as Qinchi.
But at the 1997 "Biaowang" conference, Li Tuchun had no spare money, still owed wages to the workers, and even the admission tickets to the "Biaowang" conference were bought by borrowing 200,000 yuan. However, Li Tuchun called the bidding price of daily consumer goods to 88.88 million to win the bidding king, which far exceeded the total assets of Prince Milk at that time. Several executives accompanying Li Tuchun are very clear that Prince Milk does not have such capital to support such a sky-high price, and their psychology is extremely afraid.
However, Li Tuchun's gamble won. After that, Prince Milk won orders far beyond the bidding price, and the order trucks across the country came to the door of Prince Milk, and it took 10 days to queue up to get the goods, and the dealers had to find a relationship to get the goods.
In addition, Li Tuchun also launched a "zero-risk operation" dealer policy. The policy stipulates that the contract can be terminated at any time, and expired goods can be returned to the factory for new ones. By 2007, 7,000 dealers across the country had joined the prince milk marketing system. Prince Milk's performance soared. From 2001 to 2007, its annual revenue soared from 50 million yuan to nearly 2 billion yuan, and its market share climbed to 76.2%, becoming the undisputed boss of the lactic acid bacteria industry.
Li Tuchun suddenly became a well-known entrepreneur, and even put forward the grand plan to make Prince Milk into a "millennium enterprise" that will never fade.
The success of Prince Milk quickly lost his way and began a variety of unrelated diversified operations, involving dairy products, food, "spicy" condiments, children's clothing, daily necessities, winemaking, tourism and leisure, catering, retail, media, real estate, etc., and bet the success of these real industries on capital operation.
At that time, Prince Milk had completely lost its strategic focus and did not make the category of fermented lactic acid bacteria large enough. The product has been very single, the image is old, ten years as a day, monotonous, rustic, giving people the feeling that only the size of the bottle has changed, there is no development of products from the perspective of consumer demand, can not see the product type and the corresponding target group and use of the place of any difference, highlighting the innovation ability is not strong, the product strength is weak, the profitability is not strong drawbacks.
Due to the loss of strategy and unrelated expansion, the capital chain of Prince Milk soon collapsed. Prince Milk, who hoped for capital operation, was trapped in crisis after being blocked by foreign investors such as the British Union, Morgan, Goldman Sachs and financial giant Citi. In 2007, it was destroyed by a "VAM agreement", and eventually not only did the Prince Milk Group fall into crisis, but even its founder Li Tuchun was later killed and imprisoned for the handle of this paper agreement.
In 2012, Li Tuchun walked out of the detention center after 15 months in detention, but the market share of prince milk was much worse than before. Due to strategic mistakes, lack of funds, single category, and outdated marketing, the prince milk of the world has gradually become a declining aristocrat in the second and third-tier cities, and has been forgotten by people, and now the prince milk has been discontinued, which has the business problems and the strategic loss of the founders are some painful lessons.
At the peak of life, people will always be disoriented, and many entrepreneurs who have experienced wind and rain will find it difficult to get out of such a spell. Blinded by victory, blindly seeking more, seeking bigger, and going into difficulties, some capital coveting will make the company mired in the quagmire, which shows that the founder's strategic mistakes are fatal to the enterprise, and in such a mistake, wealth is only a flash in the pan.