Interpretation Of The Chief Culprit Of Restricting Capital Expansion Of Sports Shoes Enterprises

In December 29th, the sporting goods industry, which has been in a state of rapid growth, is facing an ordeal.

The reason is that excessive expansion in recent years has led to a slowdown in growth, a large inventory and a decline in profits.

But it is also hard to explain why investors will not even trust Lining sports.

Usually when a disaster comes, investors will be more convinced of those experienced teams, and Li Ning Co, which has been established for more than 20 years, should have provided more security to investors.

Seem,

So why is Lining being questioned more? The most direct answer is that the company has never had a good answer on a series of basic strategic issues.

Who am I?

Although Lining brand has a history of 20 years, the brand is more reminiscent of the famous founder.

Besides, the brand is hard to give a strong sense of belonging.

Lining's earliest brand interpretation is Everything is Possible, which seems to be another version of Adidas's "Nothing is Impossible".

Last year, Lining launched the new slogan "Make the Change", which looks more like a company's own appeal than a consumer.

To whom.

Lining's initial target consumer group was the 70 group in China.

Last year, Lining positioned the target consumers in the post-90s crowd. This is a radical strategy, which directly discarded the 70 and post 80s crowd. But after 90, it seems that they did not buy it.

Moreover, Lining's pricing is not clear. The price of its products is 20% to 30% lower than that of Nike, Adidas and other international brands, but it is 35% to 45% higher than that of domestic brands. Do consumers want to buy a product that is neither the cheapest nor the best quality?

What to sell?

Last month, I met with a radical Internet entrepreneur. His words about products impressed me: This is an era of products, so long as the products are done well enough, word of mouth can be passed.

New technology makes information flow and sharing so fast and convenient. The popularity of SNS website also makes word of mouth become a truly important marketing way.

Compared with Nike's legendary series and Adidas's Clover series, Lining never seems to have a classic.

In addition, Lining also abandoned football and basketball products as the core and avoided the future in badminton.

How to sell.

Retail store is Lining's core channel, but Lining has not distinguished himself from competitors in terms of channel management quality.

Morgan Stanley expects Lining to spend only 1 billion 448 million yuan on inventory repurchases in the coming years.

Lining claims to have completed the integration of 256 inefficient stores, and by the end of the year will complete the integration of 400 stores, but the company did not change the traditional expansion mode driven by the new store, its strategy is to increase the retail store from about 8000 to 10 thousand in three years.

It is hard to believe that a company with a history of 20 years and two digit growth over the past few years has a series of basic strategic issues.

But this is the truth, and the problem of covering up this series is a sober Chinese market.

The chief culprit of strategic problems is usually CEO.

But the bigger root of the problem is the founder Lining. He seems to be unable to turn a company that has not reached maturity to a professional manager, Zhang Zhiyong, who is a financial man.

CFO background CEO is not uncommon, but the financial origin CEO is more suitable for mature enterprises - brands, products and channels are very stable. At this time, the growth of business performance is more dependent on management, especially financial management capabilities, receivables, and even mergers and acquisitions and capital operation.

For Lining, it is obvious that it is in a cycle dominated by products and channels, and can not solve main problems by management and finance. Instead, it requires dreamers to break through all kinds of bottlenecks.